The introduction of right to rent checks on 1 February 2016 will have important implications for social housing providers. While common social housing tenancies will not require checks, the new regulations will change the residential letting landscape and all housing associations will need to develop a response.
Landlords can be ordered to pay up to £3,000 per person if they enter into an agreement after 1 February 2016 without first carrying out the new checks. A penalty will normally apply if checks have not been made and, as a result, an adult (18 or over) who does not have permission to be in the UK occupies a residential property as their main home.
Tenancies arising under Part 2 of the Housing Act 1985 and Part 6 and 7 of the Housing Act 1996 are excluded. Occupation under such an agreement which is transferred to an alternative tenancy on the request of the tenant will also be excluded. These exclusions will clearly limit the impact on housing associations.
However, where a housing association rents property under a market rate agreement or on any other basis, then right to rent checks will be required. “Residential tenancy agreement” refers to any tenancy, lease, licence, sub-lease or sub-tenancy that provides for the payment of rent.
Checks required for all sub-lets
Sub-letting could be another area of concern for housing associations. A right to rent check will be required in all cases if a social housing property is sub-let, even if the head tenancy is under the Housing Acts. The right to rent liability for the sub-tenancy will rest with the sub-landlord but, if the social housing provider has agreed in writing to be responsible for the check, then the liability will fall on the housing association if the checks are missed or done incorrectly.
As many tenants may not be sophisticated enough to carry out the checks, there are good reasons for providers to take control of the process. Alternatively, they might choose to give tenants guidance on what to do but, in doing this, they will need to ensure that their advised approach is the correct one.
Information sources for housing associations
The required checks are not straightforward and the Government’s short guidance on how to carry out the checks misses many important points. But the Government Code of Practice on the right to rent checks is more detailed and is likely to be more helpful for housing associations.
There are a number of potential areas of confusion when conducting immigration checks but the main difficulties are likely to arise in relation to the requirement for repeat checks after the commencement of the tenancy. In many cases, a migrant can extend their leave by making an extension application. A repeat check by the landlord is required in these cases, usually before the expiry of the initial period of leave, if the tenancy is to continue.
If it becomes clear that the occupant has lost the right to rent, then the landlord must make a report to the Home Office before their original statutory excuse expires. They are not currently required to evict the tenant. Immigration applications, particularly for EEA citizens, can take months to determine and during this time the individual may not have proof of their right to rent.
To assist with this, the Government has put in place a “Landlord checking service” which will confirm whether or not an extension application has been made and whether or not the right to rent continues in the meantime.
The right to rent regime is giving rise to significant concern that landlords will refuse to rent to any non-UK nationals rather than run any risk of a civil penalty or put up with the nuisance of the checks. It would be unlawful for a landlord to insist on a British passport as a condition of occupancy. In an attempt to moderate the risks of discrimination, the Government has set out guidance which encourages landlords to check the status of all prospective occupiers, whether or not they appear to be British.