The requirements included in the Immigration Act 2014 for landlords renting out a private property are slowly being introduced.
From 1st December, landlords will be obliged to conduct checks regarding a tenant's immigration status. This will be required at the beginning of a new tenancy agreement and throughout their lease.
A trial of the new rules will begin in Birmingham, Wolverhampton, Dudley, Walsall, and Sandwell. It is believed that the Bill will be rolled out across the rest of the UK in 2015.
The majority of residential tenancies will be affected by the Act, however, it will not apply to student accommodation, tenancies over seven years, social housing, or tenancy agreements that begun before the Act came into force.
The checks will put added pressure on landlords, as the failure to comply could lead to fines. Existing and prospective landlords should fully understand the rules, and create a strategy of how they will observe them.
These measures are designed to aid the Government's clamp down on landlords who offer unacceptable or illegal rental accommodation.
Landlords who do not comply with the checking guidelines will face fines of up to £3,000 for repeat offending, with no right of appeal. The Home Office have issued a draft code of conduct on civil penalties for landlords and their agents.
The requirements are placed on landlords who must assess tenant documentation to determine whether they have a right to rent. Follow up checks must also be conducted, particularly if a specific tenant's right to live in the UK is time limited.
If a landlord's checks reveal that a tenant does not have a right to rent, then they must report to the Home Office. If they are unsure, landlords can request a rent check through the Home Office's Landlord's Checking Service. If a landlord takes this route, they will have a statutory defence for the first 12 months against a penalty, if the Home Office allow them to go through with a tenancy.
If the Home Office announce that the landlord cannot rent out the property to this tenant, then the landlord will be required to file a report with the Home Office; failing to comply with this will potentially result in a fine.
If agreed, responsibility can be transferred to a letting or managing agent. Any agency agreement a landlord has should be reviewed before this occurs. However, it is probably that an agent will charge for conducting the checks.
Those who have a right to rent are: British citizens, nationals of an EEA state, Swiss nationals, and those with leave to enter and remain in the UK; as long as the leave does not prohibit renting UK property.
Immigration and Security Minister James Brokenshire has stated that the checks should be quick and simple, however, the Royal Institution of Chartered Surveyors (RICS) has expressed their worries over the pressure placed on landlords in monitoring immigration.
The Home Office has noted that the checks may result in landlords benefitting from a lower loss of rental income. However, it is feared that the administration involved may be arduous and time-consuming.
Landlords must conduct checks every year throughout the tenancy term, and must store the information from tenants in accordance with the Data Protection Act. Some have voiced their concerns that the checks could lead to landlords favouring British citizens.
It is thought that the nationwide introduction of the Act will not occur until the general election has passed, however, landlords should consider how they would observe the Act's requirements.