New Landlord Provisions Being Tested Out In West Midlands – Residential Tenancies
We continue with our series of articles on the 2014 Act.
It has been fairly widely publicised that the United Kingdom government wants to create an openly hostile environment for people living here without permission. One of the government’s biggest objectives is to make it hard for such people to find a place to live. The reasoning behind this is that the government thinks this will force undocumented migrants to leave the United Kingdom and it will also deter other people from coming here to live without first getting the right permission. As part of this overall plan, on 1 December 2014 the provisions in the Immigration Act 2014 (IA 2014) which restrict the rights of landlords to freely rent their premises came into force. Initially the new provisions are being tested out in the local authority areas of Birmingham, Dudley, Sandwell, Walsall and Wolverhampton but if successful there, the new provisions will be rolled out across the rest of the country.
There are various new requirements which landlords have to follow to prevent them from falling foul of the new provisions and to avoid charges of discrimination, the new requirements will apply to everyone who wants to rent premises, so we all have to be prepared to comply with the requirements when asked to do so. The law in this area is complex and so expert advice is a must for anyone who is worried about the new provisions. Below is a basic outline of the new law.
It is important to note however, that the new provisions do not apply to residential tenancy agreements entered into before 1 December 2014 (for the currently affected areas) and for renewed agreements where the original agreement predates 1 December 2014 (for the currently affected areas) and the tenant has always had a right of occupation of the premises under the renewed agreement since entering into the original agreement.
The New Provisions
There are essentially now three categories of people in the rental market, defined by their nationality/immigration status:
- Those who have an unlimited right to rent: British citizens, EEA and Swiss nationals or people with a right of abode/indefinite leave to remain have an unlimited right to rent.
- Those with a limited right to rent: Other people who are entitled to enter or remain in the United Kingdom by virtue of an enforceable EU right or have been granted leave to enter or remain in the United Kingdom for a limited period have a limited right to rent.
- Those who have no right to rent: Anyone else who requires permission to enter or remain in the United Kingdom but does not have it, OR his permission to enter or remain is subject to a condition preventing him from occupying the premises is deemed to be disqualified by reason of immigration status and so has no right to rent (although such a person may specifically be granted permission to occupy premises under a residential tenancy agreement by the Home Office).
Under s22 IA 2014 a ‘landlord must not authorise an adult to occupy premises under a residential tenancy agreement if the adult is disqualified as a result of their immigration status’. There are two ways in which a landlord may contravene the provisions:
- The first is called a pre-grant contravention and occurs if the landlord enters into a residential tenancy agreement granting a right to occupy premises to someone who has no right to rent.
- The second is known as a post-grant contravention and occurs where the adult who is granted a right to occupy the premises has only a limited right to rent and later becomes disqualified by reason of his immigration status (and so has no right to rent) but continues to occupy the premises after becoming disqualified.
Penalties for Contravention
Section 23 details that a landlord who contravenes the provisions may be issued with a penalty notice for an amount that the Secretary of State considers appropriate but not exceeding £3,000.
Section 24 however, sets out the statutory excuses available to landlords who are served with a penalty notice. Under this section where the notice is given for a pre-grant contravention, the landlord is excused from paying the penalty if s/he shows that s/he complied with the prescribed requirements at any time before the residential tenancy agreement was entered into, OR a person acting as his agent is responsible for the contravention. However, these excuses are not available if the landlord knew that entering into the agreement would contravene section 22.
Where the notice is given for a post-grant contravention, the landlord is excused from paying the penalty if he has notified the Secretary of State of the contravention as soon as reasonably practicable in the prescribed form and manner, a person acting as his agent is responsible for the contravention OR the eligibility period in relation to the limited right occupier who has caused the contravention has not expired.
The eligibility period is the length of time that the initial checks cover a landlord fore and is either one year, the remainder of the person’s permission to enter/remain or the remainder of the validity of the person’s immigration document which evidences their right to remain in the United Kingdom. Within this period the landlord should follow up on initial checks carried out for those with a limited right to rent and must do so within the 28 days prior to the date when the person’s right to rent is due to expire.
A landlord’s agent is responsible for the contravention if and only if he is acting in the course of a business and under written arrangements made with the landlord, is under an obligation to comply with the prescribed requirements on behalf of the landlord. Where the agent is responsible for a contravention, he may be served with a penalty notice in similar terms to a landlord and will have available to him to similar statutory excuses against paying the penalty as a landlord.
The Prescribed Requirements
The prescribed requirements essentially relate to checking and retaining copies/records of documents which confirm the immigration status of the person wanting to rent/occupy premises. A landlord or agent is deemed to comply with the prescribed requirements if he obtains documents which are specifically listed from an occupier or prospective occupier and take steps to verify, retain, copy or record the contents of such documents.
There are three ways for landlords or their agents to comply with the prescribed requirements:
- obtain one document from a preferred list of 12 confirming that the occupier or prospective occupier has a right to rent, including a British passport , EEA or Swiss passport or national identity card, permanent residence document issued by the Home Office to an EEA or Swiss national, unexpired biometric immigration document issued by the Home Office indicating that the person named has indefinite leave to remain in the United Kingdom/no time limit on their stay in the United Kingdom or certificate of registration or naturalisation as a British citizen etc.
- obtain two documents from a list of 16 lesser-weighted documents including government department letters, birth/adoption certificate, current driving licence, current firearm certificate etc.
- obtain a Positive Right to Rent Notice for the occupier or prospective occupier from the Landlord Checking Service. This applies where the occupier or prospective occupier informs the landlord or agent:
- that they have an outstanding application to vary their leave to enter or remain in the United Kingdom or have an administrative review or appeal pending against a decision on that application,
- that they are an asylum seeker or have an appeal pending against a determination made by the Secretary of State in respect of their claim for asylum,
- that they have made an application for a residence card or derivative residence card within the last 6 months,
- that they are a person to whom the Secretary of State has granted permission to occupy premises.
Once the landlord or agent obtains a document from an occupier or prospective occupier he has various responsibilities in taking reasonable steps to check the validity of the document, verifying that the information on it is correct and that the document rightly belongs to the occupier. He must also retain clear and legible copies, in a format which cannot be altered, of the whole document if it is not a passport or other travel document and of specified pages if it is a passport or travel document. The date the copies were taken must be recorded and the copies retained securely for at least one year after the tenancy ends. There is also an obligation to take all reasonable steps to identify any additional occupants of the property at the time the occupier or prospective occupier enters into the residential tenancy agreement.
The prescribed requirements detailing the obligations on landlords at the commencement of a tenancy and throughout the period of the tenancy are governed by a Code of Practice issued by the Home Office. The Code explains the obligations and also provides more detailed guidance on how the scheme will work in practice, including which tenancies fall within the scope of the scheme, meeting the documentary requirements, calculating the amount of the penalty and appealing against the same.
There is no doubt that the scheme is complex and some landlords will be confused about the nature of their obligations, particularly in relation to those tenants who have only a limited right to rent as such tenancies carry continuous obligations and are likely to be the most problematic. With potential of fines of up to £3000 however, landlords cannot afford to be complacent and must ensure that they seek out expert advice if they are at all unsure about what they should be doing.
Whether the government succeeds in its vision of creating such a hostile environment for undocumented migrants that they choose to leave or do not come to the United Kingdom at all will only be revealed in time