The Immigration Act 2014 received Royal Assent on 14 May 2014. The Act is set to make significant changes to the way landlords and agents reference tenants and will be relevant to the vast majority of private residential landlords.
Subject to Parliamentary approval, it is anticipated that the new scheme will be implemented from October 2014 and thereafter private landlords will be prohibited from allowing certain people to occupy residential properties. The prohibition is based on the immigration status of the occupiers. Landlords will be required to check the status of prospective tenants and other authorised occupiers, to ascertain whether they have the right to occupy the property before granting a tenancy.
Who will the rules apply to?
The rules will apply to any tenant who cannot prove that they are a British citizen, a national of an EEA state or a Swiss national. Such tenants must have their immigration status verified before they can be offered any kind of tenancy. Anyone who does not have the right to remain in the UK whether they are named in the lease or not, must not be granted a right to occupy a residential property.
What is the effect on landlords?
Proof: Once the Act is implemented, landlords will have to ask for documents from everyone who will be living in the property as their main home, and not just the person named on the lease. Landlords must satisfy themselves that the tenant has a right to remain in the UK. A landlord will be deemed to be at fault they cannot prove that they made a reasonable effort to establish who the occupiers would be before the agreement was made. Landlords could also be liable if they conducted checks but ignored information which would have suggested that the property was likely to be inhabited by someone other than the declared occupiers.
Frequency: A landlord should be aware that it has a duty to perform these checks periodically. The frequency of the checks will depend on the conditions of the tenant's right to remain. If the landlord doesn't keep up with the periodic checks, and the tenant's right to remain expires, the landlord will be liable.
Whilst it would not be a criminal offence, if a landlord fails to comply, they could be fined up to £3,000 for each adult found to be illegally staying in a rented property. Agents could also find themselves liable if there was a written agreement with the landlord and the agent that they will be responsible for conducting the immigration checks on their behalf.
Fines will not apply if the landlord can prove that all relevant checks were carried out before the term of the agreement was entered into and there was no suggestion that the tenant would not have the required immigration status for the duration of the tenancy.
What documents will landlords have to ask for?
Landlords will have to ask for a specified number of documents from a list set out by the Home Office and keep copies of the documents they have been shown. It is anticipated that the Home Office will provide an online checking tool and a free telephone enquiry service.
What is the impact on LPA Receivers?
If an LPA Receiver has been appointed over a residential portfolio then he/she will need to satisfy themselves that they will not fall foul of the Act. A receiver could be criticised if it allowed a tenant to continue to occupy a property if the tenant does not have the right to remain in the country. In those circumstances a receiver could be liable for a fine.
As a matter of good practice a receiver should take steps to verify the status of any tenant shortly after its appointment. If he/she is not satisfied that the tenant can show a right of citizenship then they may need to consider obtaining possession to avoid a financial penalty.
If you are a landlord or an agent who acts on behalf of the landlord then your procedures will need to be updated in anticipation of this scheme coming into play. Failure to do so could leave you in breach of the Act and liable to pay a hefty fine.
If you have any questions or would like more information, please contact Elizabeth Boyes.
Author: Laura McAuleyThis information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.