Earlier this year the Government’s bill to tackle immigration was passed. The Immigration Act 2014 (“the Act”) broadens the policing on immigration by placing additional responsibilities on the public at large, and more precisely on landlords.
Under the Act landlords will be expected to examine if a prospective tenant has the right to be in the UK. If a landlord is found renting a property to an illegal migrant without carrying out the necessary checks that is expected of them under the Act they may find themselves liable for a civil penalty up to £3000.
The Act will be brought into force in the Midlands on 1 December 2014. The scheme will be piloted in Birmingham, Wolverhampton, Dudley, Walsall and Sandwell. The Government plans to review the effect of the Act after 6 months of being implemented before the pilot is extended further afield. It was initially planned by the Government that the scheme will be in full effect nationwide before the end of 2015.
The Home Office has published a draft Code of Practice which explains the landlords rights and responsibilities and how landlords can check if a tenant has a “right to rent” in the UK. The Code of Practice may be used as evidence in legal proceedings and offers the court some guidance on enforcing the Act.
The Act may be causing some landlords to panic. The Home Office plans to introduce a telephone help line and email service to answer queries and/or concerns that a landlord may have.
The purpose of the Act is to prevent illegal migrants from establishing a settled life in the UK as well as to track rogue landlords from providing illegal and/or substandard accommodation. Whether the Act will make any real impact remains to be seen.
The Act does not apply to individuals under the age of 18 or those 18 years of age or above that are a British Citizen, EEA National or Swiss National.
The Act does apply to accommodation granted under a lease or tenancy agreement, sub-letting by an occupier and lodger agreement. The following forms of accommodation are exempt:
- student accommodation;
- social housing;
- refugee hostels;
- care homes; and
- accommodation provided under long leases.
The Act does not apply to rental agreements that were entered into before the Act came into force or those which have been renewed between the same parties as long as there has been no break in occupation.
Under the Act a landlord will include an occupier that sub-lets the property or any part of the property to another person. Unless that occupier’s landlord has consented to the sub-letting, the occupier will assume the responsibilities of a landlord under the Act and if they have been found to have let the property to an illegal migrants they face the possibility of being fined.
The landlord’s responsibilities under the Act may be transferred. For instance, if a landlord has letting agents the agents may agree to take responsibility to undertake checks on the tenant. Another example would be a purchaser acquiring property with sitting tenants. Upon completion, the purchaser will be the landlord and they will be responsible to carry out the necessary checks. This is not an exhaustive list but a few examples where the landlord’s responsibilities may be transferred.
There are three simple steps that a landlord can take to avoid being caught letting accommodation to an illegal migrant:
- Check the prospective tenant’s identification e.g. passport, national identification card etc.
- Conduct follow up checks, especially if the tenant(s) right to stay in the UK is limited.
- Report to the Home Office if the follow up checks show that the individual has no right to rent.
If the landlord is unsure if the individual has a right to rent accommodation in the UK they will be able to request a right to rent check through the Home Office Landlord’s Checking Service. The Home Office plans to respond to such enquiries within two days. If the Home Office respond by giving the landlord the green light to let the property they will have a statutory defence for the first 12 months against a penalty under the Act for the particular letting. If the Landlords Checking Service come back with a response that the landlord cannot let the property to that individual the landlord must file a report to the Home Office, failing which they can be liable for a penalty.
If a landlord is found to have breached the Act and the Home Office decide to fine the landlord, the landlord does not have a right to appeal. The Code of Practice suggests that landlords who repeatedly breach the Act will be levied with the maximum fine of £3000. The draft Code of Practice on Civil Penalties may be of particular use for landlords and letting agents.
Time will tell what kind of an impact the Act will have on the private letting market. Immediate questions come to mind such as:
- Given the inherent risk of liability under the Act will it lead to an increase in agents fees if the landlord wishes to transfer responsibility to letting agents?
- What will be the impact on properties sold at auction where there are sitting tenants?
- Will it lead to better quality housing generally?
- Will the rental market become more competitive.
Hopefully, further light will be shed by the Government in their report due June 2015.
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