Are you ready for Right to Rent?

From today, new legislation comes into force that impacts all landlords in the UK: Right to Rent.

The new law, which forms part of the Immigration Act 2014, requires all landlords in Britain to ensure that their tenants have the right to reside – and, therefore, rent a property – in the country.

From today, all landlords are required to take on this responsibility, as the government cracks down on illegal immigrants in the UK. Occupants eligible to rent in the UK must be over the age of 18 and must be a British citizen or have the right to stay in the country – something that landlords are obligated to check before a new tenancy can start. If they fail to do this, they face a civil fine of up to £3,000.

The introduction of the law today follows a pilot scheme in the West Midlands last year, but there has been no gradual rollout of the legislation across regions the UK; rather, it has been applied to the whole country immediately.

As a result of this speedy implementation, there are now concerns within the property industry that landlords are not ready to take on their new responsibilities.

According to a survey by the Residential Landlords Association of over 1,500 landlords, more than 9 in 10 received no information from the government about Right to Rent, with 72 per cent of landlords saying they did not understand their legal duties.

The result will be that many landlords are unlikely to rent to those who cannot easily prove their right of residency. The survey also found that 44 per cent of landlords will only rent to those with documents that are familiar to them: this could cause problems for the estimated 17 per cent of UK nationals who not have a passport, especially as they are more likely to be the young or less well-off who are relying upon the private rented sector for housing.

A separate study by Urban.co.uk a fortnight ago found that out of 5,000 landlords, 50 per cent said they were not prepared for Right to Rent. 1 in 5 thought they had until April 2017 to get ready for the new rules, while 3 per cent thought it would not be enforced until 2018.

What impact could this lack of understanding and preparation have upon both the housing market and those seeking accommodation?

“Landlords are damned if they do and damned if they don’t. Fearful of a fine they face two difficult ways forward,” says Dr David Smith, Policy Director for the RLA.

“They can play it safe, and take a restrictive view with prospective tenants, potentially causing difficulties for the 12 million UK citizens without a passport. Alternatively, they may target certain individuals to conduct the checks, opening themselves up to accusations of racism.”

“One independent study has already showed that 42 per cent of landlords said that Right to Rent has made them less likely to consider tenants without British passports,” comments Matt Hutchinson, director of flatshare site SpareRoom.co.uk.

For online-only letting agents, who will find it difficult to check someone’s identity face-to-face, the process could prove more disruptive to day-to-day activities, while those with tenants from abroad could also encounter practical obstacles.

“We have already implemented the document check and have already had to delay the start of one tenancy as a result,” says Lucy Morton, Head of Residential Agency at JLL. “The tenant is currently a resident overseas and, as yet, has been unable to present his original documentation for authentication. The start date has, therefore, been pushed back to allow the tenant time to come to the UK and provide all the necessary documentation required.”

For landlords using letting agents, the new rules are certainly not going to cause a headache: agents are required to carry out the checks on their behalf.

For everyone else, though, what exactly are landlords required to do? And is it straightforward as the government insists?

Whether you are an existing landlord or interested in investing in UK buy-to-let, here is a quick guide to Right to Rent:

What is Right to Rent?

The Right to Rent legislation requires landlords to check that the named tenant or occupier of a private rented property has the right to reside in the UK. In other words, they must be over the age of 18, a British citizen, a national from the European Economic Area, a Swiss national or have proof of other rights to reside in the country.

When does it come into effect?

The legislation applies to all new tenancy agreements from 1st February. Checks can be carried out as far as 28 days before a tenancy begins, so landlords can prepare in advance to prevent delays and void periods.

What do you have to do?

From today, Landlords will have to check all new tenants for valid identification, such as a passport or visa. They must make and keep copies of the original documents and record the date when the check was made. This includes any British, EEA and Swiss nationals – all documents must be checked, copied and recorded.

What do you do with the documents?

Landlords must keep the copy of the documents for 12 months after the tenancy ends.

What if the tenant does not have the right to rent?

If the occupant or tenant does not have the right to rent in the UK, the landlord must contact the Home Office and inform them – if not, the landlord could face a fine of £3,000. Landlords can evict tenants without the right to rent immediately or await for instructions from the Home Office – the Home Office does have the authority to grant temporary permission to rent a home.

Are there any exceptions?

There are some exceptions, such as social housing providers, hostels and accommodation provided by employers to their employees. Student accommodation is also exempt.

How do you know that your checks are correct?

Landlords can use the government’s online checking tool to go step-by-step through the process, which will confirm that the tenant has the right to rent in the UK: www.gov.uk/landlord-immigration-check This website will also allow landlords to check if someone has an outstanding case with the Home Office.

What do you do if you are an online agent or your tenant is overseas?

As online-only agents become more common, and a growing number of tenants come from overseas, landlords may find it hard to confirm their tenant’s identity and right to reside in the UK face-to-face. However, an online video connection through a platform such as Skype or Apple’s FaceTime can be used, while documents can be sent through the post using recorded delivery to ensure their safe transit.

Do you have to do anything else?

No, landlords only have to carry out this check once for each new tenant.

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