Do you have a Right to Rent?

The Government has today published the Immigration Bill in the Commons. We have previously commented on this planned bill and we had been hoping that it might be quietly shelved or downgraded. However that appears not to be the case. From our point of view we are only interested in the housing related provisions in Chapter 1 of Part 3 (which start here) and I am not going to discuss the rest of the Bill.

Chapter 1 of Part is, as most of you will know, concerned with ensuring that private landlords have to do the Home Office’s job for them. Sorry what I meant to say there was that the Bill is concerned ensuring that private landlords do not rent property to those who do not have leave to remain in the UK.

Structure
The portion of the bill we are concerned with is sections 15 to 32 inclusive along with Schedule 3. It is fearsomely complex and I have only spent a short time looking at it so please don’t hesitate to point out mistakes and omissions in the comments.

Section 15 defines who it applies to. Somewhat counterintuitively this operates by defining a “residential tenancy agreement” as any agreement for occupation (including sub-tenancies and licenses) which creates a right of occupation for adults of a premises for residential use as their sole or main residence even if there are other uses of that premises. Rights of occupation set out in Schedule 3 are excluded. These include most social and local authority accommodation and long leases which fall under the Commonhold and Leasehold Reform Act. Presumably the limitation to sole or main residence is to permit hotels to operate without falling foul of this legislation.
Section 16 disqualifies persons from occupying a property under a residential tenancy agreement if they are not a UK, EEA or Swiss national or they do not have a right to rent. A right to rent is something that can be given by the Secretary of State but is not something that you have if you have no right to enter or remain in the UK or your right to enter it remain is subject to a condition preventing you from occupying premises. There is also a limited right to rent which you have if your right to remain is for a limited period or you have entered on an EU right.
Section 17 makes it a contravention (notably not an offence) for someone to allow a person without a right to rent to occupy premises on a residential tenancy agreement. It distinguishes between “pre-grant contraventions” where the occupancy was commenced at a time the person had not right to rent and “post-grant contraventions” which is when there is a limited right to rent which expires during the permitted period of occupancy.
Section 18 permits the Secretary of State to give a penalty notice to a landlord in a variable amount of up to £3,000 for any contravention as defined under s17. It is worth noting that in a post-grant contravention the penalty is not levied on the landlord who originally allowed the occupancy but the landlord at the time the contravention occurred.
Section 19 sets out statutory excuses available to landlords. These all centre around the fulfilment of the “prescribed requirements” at some stage. There is also an excuse if there is an agent who was responsible for the contravention.
Section 20 deals with agents. An agent is responsible for the contravention if they are acting in the course of a business and there is a written arrangement whereby the agent is responsible for compliance with the immigration provisions. In that case s20 permits the Secretary of State may give a penalty notice to the agent of up to £3,000.
Section 21 sets out the excuses available to agents. Again these centre around the prescribed requirements.
Section 22 creates yet another definition. This is the “eligibility period” which relates to limited right to rent occupiers and is created for them once the prescribed requirements are complied with in relation to them. The eligibility period is one year or the remaining period of leave to remain or validity, whichever is the longest.
Section 23 deals with penalty notices and their requirements. Surprisingly one of these can be given without any effort being made to check whether any of the statutory excuses apply. Each adult in a property can have a separate penalty notice issued in respect of them so the £3,000 maximum will, in practice, probably not be the maximum.
Under section 24 someone who is served with a penalty notice can object to the Secretary of State. This must be done in writing. This can be on the grounds that there is no liability to the penalty, that there is an excuse, or that the penalty is excessive. The Secretary of state can then cancel, reduce, or increase the penalty or do nothing. The time to make such an objection is yet to be specified.
Section 25 allows for appeals to the county court (or sheriff in Scotland) without stating which court those appeals can be made to. These appeals can only be made after an objection has been made to the Secretary of State and must be brought within 28 days of the penalty notice being given or the Secretary of State determining the objection.
Enforcement is dealt with under s26 and is treated as a civil penalty made as an order of the county court or sheriffs court.
The Secretary of State is required to issue a code of practice under s27 which must give guidance on how a penalty is to be calculated and may also give guidance on how a residential tenancy agreement will be determined and what an only or main residence might mean.
Section 28 permits a further code of practice to be issued which will specify what a landlord or agent should and should not do to avoid committing racial discrimination. Frustratingly, this code is not a requirement and is entirely at the option of the Secretary of State. The code must be laid before Parliament.
Section 29 deals with the Prescribed Requirements which are to follow in secondary legislation. These may require a landlord or agent to obtain one or more documents from a occupier; to verify, retain or copy it, or take some other steps. The idea of landlords being encouraged to retain documents I find particularly concerning. Even if this is not what is ultimately required I can see some landlords treating this as a permission to help themselves to a more useful variety of tenancy deposit.
The remaining sections deal with transitional provisions, exemption of the Crown as a landlord, and definitions and interpretation respectively.

Comment
This legislation is long and complex. I have had real trouble digesting it all and there is a lot of complex exclusions and other small changes and qualifications. I suspect there are loopholes and that there will be efforts made to find them. I don’t really see why there is a need to separate the penalty system from the criminal courts and this looks like an effort to avoid difficult decisions in the Courts. At the same time it could be argued that it avoids criminalising landlords who have made a mistake.

Guidance
There is also a summary factsheet available from the Home Office. This indicates that there will be an online checking service as well as a telephone and email helpline made available to landlords. There will also be a service to assist migrants who do not have evidence that they have a right to rent. The fact sheet also indicates the intention to implement these provisions from October 2014.

Drafting notes
As a, slightly pointless, aside it is interesting to note the contrast in drafting styles between this bill and those that have come from the CLG drafters. They tend to use definitions from other pieces of housing-related legislation whereas this Bill defines almost everything itself. This leads to a more self-contained piece of legislation but it makes it fiendishly complex and self-referential.

About D

D is a solicitor specialising in landlord and tenant matters with a London firm.
Posted in Regulation and planning, Various (non-housing) and tagged .

24 Comments

    • I had refrained from highlighting the juxtaposition between conference season and this populist piece of legislation. But as you have done so…

      I suspect it is the delay that is now being built in that will kill it off more than LibDem concerns or pilots.

  1. Does anyone have any idea how this may affect Landlords who provide student accomodation? Our local University takes a lot of foreign students, many from non EU countries.

  2. Well this has to be one of the most odious pieces of legislation in housing law I have ever seen, and I usually act for tenants.

    Most concerning is (c):-
    “(3)The first case is where a residential tenancy agreement is entered into that, at the time of entry, grants a right to occupy premises to—.

    (a)a tenant who is disqualified as a result of their immigration status,.

    (b)another adult named in the agreement who is disqualified as a result of
    their immigration status, or.

    (c)another adult not named in the agreement who is disqualified as a result of their immigration status (subject to subsection (5)).”

    Does this mean the landlord has to check the status of all who intend to occupy? Or regularly check who is actually occupying?

    Does this then become a case of illegal immigrants must be homeless and live on the streets? I don’t want that because it’s a bit untidy and annoying when walking about town if nothing else. Did they even think about the consequences?

    Hopeful bound to fail and an attempt at a headline.

  3. It will apply to all types of sub-tenancy and lodger arrangements so as to avoid illegal immigrants moving from a typical tenancy to some sort of informal residential agreement. You could therefore have say, a legitimate tenant from outside of the EU perhaps a student who has been in the UK for a few weeks, who to maximise income, sublets a room in their lawful tenancy, unknowingly to someone without leave to remain, and they would therefore have to undetake a status check on the other person.

    Somewhere in the government consultation I seem to remember that a landlord would be expected to do follow up checks on residents after the start of a tenancy. It is sometimes difficult to get a landlord to attend to view for housing purposes let alone for immigration. It is unworkable and is not comparable to the employment situation where employers have existing duties towards the state with tax and NI

    • A follow up check would be required as it is also penalisable under the bill if a tenant becomes ‘not lawfully present’ during the lifetime of the tenancy.

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  5. We often have people rent from long distance without viewing. Would a certified copy of the required ID suffice? I dodn’t really want the responsibility and cost of mailing original ID documents back to the applicant.

    • Really? Even though properly certified copies of ID are acceptable for mortgage applications and bank accounts etc.?

    • Jamie,

      The reality is we are unsure. However, the legislation and the fact sheet imply that you will have to see originals and that you may be expected to check them out in the case of obvious forgeries. However, this is all to be sorted out by secondary legislation.

  6. Nice exclusion on social landlords ( shakes heads). How many councils do comprehensive tenancy checks- not so many and not simply because of cuts, its the political ramifications. As to the comment about illegal immigrants then the solution is obvious don’t be one, enter legally, or apply for asylum, ask to return or choose another destination. There are 20 odd other countries in Europe, or elsewhere if you fear returning home. We can provide secure barrcks in the meantime.

    There is a simple solution to this linked to a robust NI system, which every one lawfully here (tourists aside) will have, One call or log in shows you the registered persons image submitted by employers or the government service that they are in contact with about the NI number. Those here on a time limited basis have an expiry suffix.A bit of funding to help agencies to do this and those to help applicants and a list of registered users and we’re away. Helps in housing banking health and a number of other areas. Where multiple names crop up a Judge permits further investigation by the appropriate dept.

    • Councils certainly do do eligibility checks. It is one way of pruning the homeless list. I’m afraid that the rest of your comment appears to be made in woeful ignorance of the complications of the immigration system and the multiple ways of being lawfully, or not lawfully present, let alone the huge mess that is the UKBA/Home Office.

    • I don’t think that is a fair comment Giles. I am not simply talking about eligibility checks but the issue as presented above of a lawful tenant , perhaps an immigrant, then subletting part or the whole, who is going to find himself as a landlord, lawful or not. Some LA’s who are not auditing and those that are ineffective, mean that a section of residents sidestep the process and are not going to be caught by audit.
      What I am suggesting is a simple verfication of the key peice of data that people need in almost all walks of life. On that cornerstone you can work back so that the problems you refer to in the UKBA can be geared to this. That therefore removes the burden from Councils establishing eligibility, the BTL chap and the person renting a room ( even if on the QT) so that verification is quick and simple, the work having been done by the right authorities. Its not unfair to say that the problems are not just “money” but the god awful implementation that extends to areas like the bedroom tax as you have ably outlined. Putting responsibility on one department rather than a raft of exclusions makes practical and financial sense. Rather than wait for outright reform, a starting point of the NI system would highlight discrepancies to allow investigation. The number can be easily prefixed with a letter that reflects the “multiple ways” they are here. In the meantime illegals don’t get to jump ahead of patient legal immigrant applicants, and we make it that much harder to bring in the poors soul being exploited and degraded by human traffickers. Please don’t think I am peddling “hate” I am suggesting a key data point in order to make this legislation work and workable for landlords and tenants alike not to metion employers banks benefits agencies all of who do their own eligibility checks etc.

    • But that is exactly what I mean. There is no simple verification of a key piece of data. And one can be lawfully present without having an NI number or permission to work. Overseas students for example. Or what if one is a carer staying through a child’s EU rights (Zambrano)? It is even more complex than employer checks as lawfully present is not the same as a right to work, and look at the employer check guide from the Home Office and it would be worse for landlords.

      And of course councils don’t do eligibility checks on sub-lets of whole by their tenants. Those are unlawful, and the council won’t be told!

      I am genuinely lost about ‘jumping ahead’.

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  8. What AM is suggesting is an identity card system. For it to be fair (and so that UK citizens who look a bit migranty, like e.g. Mo Farah or Michael Howard don’t get disadvantaged by it), it would have to apply to everyone. And generally the public has been very much opposed to that, for good reason. Anyone who deals with vulnerable people or those in crisis needs little imagination to work out that they will get refused all services for which the ID card they have lost is the qualifier.

  9. And another thing! it seems as though the Bill does not just catch people who pay money to occupy (or tenants as the Home Office want us to call them). Cl 17 “A landlord must not authorise an adult to occupy premises under a residential tenancy agreement” …… covers not only the tenant and anyone else named in the agreement but also “another adult not named in the agreement”.
    So if I rent, as a real tenant, a house with a spare bedroom and then my overstaying auntie comes to stay the agreement clearly allows me to have people to stay (as long as I don’t sublet) like most tenancies do. So the landlord gets fined. But he could put a term into the agreement that says I am not allowed to have anyone to stay who is not allowed to rent. So then I would have to do the checking for him (let’s not go to the data protection issues here). So a sensible landlord puts a term into the agreement saying I cannot let auntie stay. And the Bill says

    “Any term of a residential tenancy agreement that prohibits occupation of premises by a person disqualified by their immigration status is to be ignored for the purposes of determining whether there has been a contravention of this section if—
    (a)the landlord knew when entering into the agreement that the term would be breached”

    How would the landlord know that, or, more to the point , how can he prove that he did not? Surely he could tell by looking at me that I am in thrall to the auntie? or the Home Office enforcement people will point out that auntie was there when he visited and he should have checked the status of the lady who gave him tea and scones?

  10. I’m concerned about the exclusions in Schedule 3. Part 1 defines social housing. Part of the qualifying definition is that the property is being provided under (or in pursuance of arrangements under) Part VI and VII of the Housing Act 1996. What about when housing associations let properties under their own allocations scheme to non transfer tenants, and not following a nomination from a local authority? Based on the wording it appears that they would not be exempt?

  11. Yippee. Hundreds of pages of more micro-regulation !

    As someone who is dealing with the expensive multi-headed monster which is English Landlord Licensing for the first time (30 page form, roughly £1500 cost per house to fill it all in before we get to any real works – all to be paid by Ts eventually of course), my question is whether this stuff will contravene eg Fit and Proper person tests.

    It isn’t really a question of whether landlords are “criminalise” or not; Councils have shoehorned all sorts of subjective (and incomprehensible) enquiries into their Licensing schemes,

    eg, Wrexham’s form asks:

    “Has the proposed licence holder, the manager and/or any person associated with either of them:

    15.3 Contravened any legislation relating to housing, public health,
    environmental health or landlord and tenant law? ”

    15.6 Contravened any Code of Practice relating to the management of
    HMOs?

    15.10 Been subject to complaints from tenants or other sources, regarding serious or repeated breaches of the conditions of a licence under the Housing Act 2004? ”

    (Link:http://www.wrexham.gov.uk/assets/pdfs/licences/hmo_license.pdf)

    Those tests (as well as being meaningless, and perhaps unlawful, on their face – Which of the 100 or so Acts do they mean? What Codes of Practice? What is “serious”? Does a Police Caution when I was 17 count?) – catch things that are not ‘Court Convictions’ as do many other Councils.

    What happens in this new set of Immigration proposals?

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