Landlords’ obligation to prevent illegal immigration

The government introduced further obligations on landlords and managing agents to check that tenants and lodgers are legally eligible to rent property in England.

On 1 February 2016 the government introduced further obligations on landlords and managing agents to check that tenants and lodgers are legally eligible to rent property in England. This legislation does not apply in Northern Ireland, Scotland and Wales.

The Scottish Government has made the following observations: ‘Landlords will also be required to pursue legal proceedings against someone who does not have the right to remain in the UK, which is surely the role of the Home Office and Border Agency and not private individuals or businesses.’

This seems to be a further measure against private landlords in England. The UK government has introduced a number of measures to ensure that landlords pay more tax on the rental income they receive and this measure requires them to carry out what was in the past clearly the role of government agencies such as the Home Office and Border Agency. If landlords or managing agents in England fail to comply with these obligations they can be fined £3,000 per tenant and face possible imprisonment.

The UK government is introducing this scheme on what it refers to as ‘a phased geographical basis’, starting in the Midlands. The code applies to residential tenancy agreements granted in relation to property located in an area where the scheme has been implemented and applies to agreements entered into on or after the date of implementation for that area, see guidance on GOV.UK.

Who can occupy/rent residential accommodation?
Under the scheme, people will fall into three categories depending on their immigration status as follows:

(i)            There are two groups of people who have an unlimited right to rent:
(a)  British citizens, EEA and Swiss nationals
(b)  People who have the right of abode in the UK, or who have been granted indefinite leave to remain or have no time limit on their stay in the UK.

(ii)          Those with a time-limited right to rent:
These people will not fall into category (i) (a) or (b) above, but they should be able to obtain documentary evidence to demonstrate that they are entitled to enter or remain in the UK (e.g. as a result of an enforceable right under European Union law or any provision made under section 2(2) of the European Communities Act 1972.

(iii)         Those with no right to rent:
This category covers everyone who does not fall into category (i) or (ii) above.

This scheme does not apply to children (under the age of 18 years) which means that landlords may allow those under the age of 18 years to occupy property. A landlord is not required to conduct additional follow-up checks at the point when the child turns 18. However, when further checks are required, such as on renewal of a tenancy agreement, checks should be carried out on the person who is then over 18 years old.

Which residential tenancy agreements fall within the scheme?
The scheme applies only to residential tenancy agreements first entered into on or after the date on which the scheme is implemented in the area where the property is located.

A landlord is not required to take any action in relation to residential tenancy agreements entered into before that date, or which are renewed after that date if the renewed agreement will be between the same parties and there has been no break in the tenant’s right to occupy the premises.

The scheme only applies to residential tenancy agreements which allow someone to take up occupation as their only or main home.

Holiday accommodation
If the letting is for a short time period and it is clear that the occupiers intend to use the premises for leisure related purposes and will not remain in the property after this period, then the landlord may conclude that the property is to be used as holiday accommodation and there is no need to conduct right to rent checks.

As a guide, the Home Office would consider that bookings of three months or more may indicate that a person is using the accommodation for a purpose other than leisure purposes, and could be intending to use the accommodation as their only or main home.

However, right to rent checks should be considered if the booking is open ended or the initial booking was time limited but has subsequently been extended on one or more occasions such that the occupier appears to be using the premises as their only or main home.

Excluded agreements
Some types of property and residential tenancy agreements are excluded from the scheme, such as the following:

(a)  Accommodation involving local authorities (usually in circumstances where the accommodation is arranged by a local authority).
(b)  Social housing
(c)  Care homes, hospitals and hospices and continuing healthcare provision
(d)  Hostels and refuges
(e)  Tied accommodation
(f)    Student accommodation
(g)  Mobile homes
(h)  Long leases (for a term of seven years or more).

The above are just headings, there are detailed rules relating to all of the above exemptions and landlords should refer to those when they consider they may apply.

Penalties
In general, responsibility under the scheme lies with the landlord (i.e. the person who authorises the occupation of accommodation by the occupier in return for the payment of rent).

However, there are three common situations when these responsibilities may be transferred to another person as follows:

  • an occupier who sub-lets all or part of their accommodation to a person for money will in effect become a landlord and in general will be responsible for carrying out the right to rent checks
  • agents who let or manage the property and who agree with the landlord in writing to become responsible for fulfilling the requirements of the scheme
  • if a landlord acquires a property with sitting occupiers the new landlord should confirm with the transferring landlord that document checks have been undertaken and retain evidence to demonstrate this. Care needs to be taken by the transferring landlord as they may remain liable under the scheme.

Cases which may result in penalties are initiated by the Home Office. The process incorporates the following steps:

  • the Home Office issue a Referral Notice to the landlord
  • the landlord will then be sent an information request giving the opportunity to present further information and evidence to the Home Office
  • if the Home Office decides the landlord is liable for a civil penalty they will issue a civil penalty notice. If a landlord is not found liable for a civil penalty, they will be issued with a no action notice
  • a landlord who has been issued with a civil penalty notice may object in writing to the Home Office within 28 days
  • the Home Office will then consider the objection and reply within 28 days (to either maintain the penalty, cancel it or reduce it). If it decides to increase the penalty the landlord will be served with a new civil penalty notice which they may then first object to, and subsequently appeal against
  • if the landlord remains liable for a civil penalty of the same or a reduced amount, the landlord may appeal to the courts within 28 days
  • if the landlord does not receive an objection outcome notice within the 28 day period, an appeal must be brought within 28 days of the date by which the Home Office should have replied.


Amount of the penalty
The Home Office has a framework for calculating the penalty (which can be found in section 7 of the Code of Practice). The penalty amount is calculated per illegal occupier and is based on whether the landlord has previously breached the scheme as well as the nature of the breach. The penalty can be up to £3,000 per illegal occupier.

Establishing a statutory excuse
There are three steps involved in establishing and maintaining a statutory excuse against liability for a civil penalty as follows:

  • conduct initial right to rent checks before authorising an adult to occupy rented accommodation
  • conduct follow-up checks at the appropriate date if initial checks indicate that an occupier has a time-limited right to rent
  • make a report to the Home Office if follow-up checks indicate that an occupier no longer has the right to rent.

The Code of Practice issued by the Home Office on 12 February 2016 provides details about what checks should be undertaken and how to make the report referred to above.