Updated briefing on Immigration Act 2014's 'Right to Rent' scheme as Immigration Bill 2015-2016 proposes new criminal sanctions
The House of Commons Library has published a useful updated briefing paper on the duty of landlords to carry out immigration checks.
Image credit: UK GovernmentThe update comes as the Government seeks to roll-out the Immigration Act 2014's controversial 'Right to Rent' scheme across England and Wales, and as the recently published Immigration Bill 2015-2016 proposes that landlords could face up to five years in prison under new criminal sanctions.
The briefing paper explains the law in relation to the 'Right to Rent' checks and the new obligations for private sector landlords set out in the Immigration Act 2014.
You can read it in full below:
____________________
HOUSE OF COMMONS LIBRARY
BRIEFING PAPER
Number SN07025, 21 September 2015
Private landlords: duty to carry out immigration checks
By Alex Bate
Shiro William Kennedy Ota
www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | papers@parliament.uk | @commonslibrary
Cover page image copyright Wendy Wilson
Contents
Summary
1. Background
2. What will private landlords have to do?
2.1 Carrying out checks
Documents to check
When to carry out checks
2.2 Reporting to the Home Office
2.3 Avoiding discrimination
2.4 Agencies and fees
3. The pilot scheme
3.1 Response to the pilot scheme
4. Landlords' reactions
5. Amendments proposed in the Immigration Bill 2015 - 2016
As part of the Government's attempts to cut down on illegal migration, the Immigration Act 2014 contains a number of measures to restrict access to services for those without a valid right to remain in the UK.
One of these measures is a new requirement for private sector landlords to check that tenants' immigration status does not disqualify them from renting property. As a result, landlords who allow tenants without a so-called 'right to rent' to occupy their property will be liable for a civil penalty.
Given the additional burdens this is expected to place on landlords, the policy has proved controversial within the private rented sector, with a number of concerns raised by landlord associations at the consultation stage. Consequently the scheme has been piloted in five West Midlands council areas from 1 December 2014, the results of which will be assessed prior to its roll out across the UK.
In August 2015, the Government announced that a new Immigration Bill would amend further the rules on right to rent, introducing possible prison sentences for landlords who repeatedly failed to carry out checks. The Bill would also make it easier to evict existing tenants without a current right to rent. The Bill is now published and delivers on the commitment to allow landlords to evict on the basis of immigration status.
This briefing paper explains the law in relation to these 'right to rent' checks and the new obligations for private sector landlords set out in the Immigration Act 2014. The paper also considers some of the concerns raised by landlord associations and sets out details of the 'pilot' testing of the policy.
In the summer of 2013 the Home Office consulted on proposals to require private landlords to carry out "immigration checks on tenants, with penalties for those who provide rented accommodation to illegal non-EEA migrants in breach of the new requirements." [1] Home Secretary Theresa May argued this would "make it harder for landlords to house illegal immigrants and harder for illegal immigrants to settle in the UK." [2] This proposal has since been approved by Parliament as part of the Immigration Act 2014. It is subject to a pilot programme in the West Midlands from 1 December 2014, with plans to roll out the 'right to rent' checks across the UK in 2015.
Social housing providers are already expected to check the immigration status of their tenants and therefore are not affected by this legislation. It will instead apply to rooms or properties rented to private tenants, or rooms that are sublet within a landlord's own property.
Landlord associations have raised a number of concerns with the legislation (see Section 4), particularly that it will place an undue burden on their members. In response, the Government has been keen to emphasise what it feels is the 'light-touch' nature of the regulation. A number of tenancies have been excluded, such as care homes, student accommodation and long leases (see Schedule 3 of the Immigration Act 2014 for the full list) [3].
At the schemes inception, breaches were proposed to make the landlord liable for only a civil penalty, rather than a criminal equivalent, as applies to employers who employ people with no right to work in the UK. This has since been altered and now includes criminal sanctions of up to five years in prison. [4]
Other concerns are that landlords will not have the resources or knowledge to properly check immigration documents. The Home Office has therefore committed resources to provide suitable information to landlords and to offer a checking service for more complicated immigration cases.
As well as those from landlord associations, the Joint Committee on Human Rights has also raised concerns around potential for the legislation to lead to discrimination against prospective tenants (see Section 2.3).code of [5] In response, the Government has produced a practice for landlords on how to avoid unlawful discrimination when conducting the right to rent checks. [6]
2. What will private landlords have to do?
Under Section 22 of the Immigration Act 2014, landlords "must not authorise an adult to occupy premises under a residential tenancy agreement if the adult is disqualified as a result of their immigration status." The legislation does not apply to those under 18 or those not renting the property as their main home, although the Home Office's code of practice on the civil penalty scheme does recommend assuming the property is being let as a main home if there is any doubt. [7]
Adults are disqualified if they do not have unlimited or a time-limited right to remain in the UK, or if they have a right to remain but are barred from renting property as a condition of their immigration status.
In order to check a tenant's immigration status, landlords will need to view original immigration documents in the presence (or via live video link) of the applicant, make copies of the documents, and keep the copies for 12 months after the tenancy expires. The checks can take place no more than 28 days before the commencement of the tenancy agreement.
The code of practice sets out a list of acceptable documents to prove a tenant's right to rent, including UK, Swiss or EEA passports (current or expired), a biometric immigration document, or a residence card. [8]
For applicants whose immigration documents are held by the Home Office and are therefore not available, the Home Office has created a Landlords Checking Service. This online tool will provide an answer as to the applicant's right to rent. If no answer is received from the service within 48 hours, the landlord will have a statutory excuse against liability for a penalty.
Concerns were raised at Committee Stage that the legislation may inadvertently invalidate all existing tenancy agreements. In response, an amendment was passed that meant landlords only need check at the commencement of a new tenancy agreement after the legislation comes into force. [9] They will not need to check a tenant's right to rent for existing agreements.
If a check shows a tenant has unlimited right to rent, the landlord will not be required to carry out further checks prior to any subsequent tenancy renewals. If, however, the tenant has limited right to rent, landlords will have to carry out repeat checks. For example, if a tenant has leave to remain until 1 July 2018, their right to rent will expire on that date as well, and it will be the responsibility of the landlord to carry out additional checks before that date.
For tenants with limited leave to remain, they only need to demonstrate their eligibility on the commencement date of the tenancy agreement; the landlord will have a statutory excuse for a year. Even if the tenant's leave expires a day after the agreement is commenced, no follow-up checks will be required in the first year. [10]
2.2 Reporting to the Home Office
If a follow-up check indicates an occupier no longer has the right to rent, landlords will be required to report this to the Home Office "as soon as reasonably practical". However, once this report has been made the landlord is under no obligation to evict the occupier. [11]
With regards to new tenants, landlords are under no obligation to report an applicant having no right to rent to the Home Office, provided they do not allow them to occupy the property.
If a landlord rents to a person with no right to rent, or does not report the expiration of an occupier's limited right to rent, they will be liable for a civil penalty. The levels of these penalties are set out in the table below. [12]
|
No breach of regulations within past 3 years |
Previous breach of regulations within past 3 years |
|
|
Category A |
£80 |
£500 |
|
Category B |
£1,000 |
£3,000 |
One of the major concerns highlighted during the consultation was the potential for discrimination. The Charted Institute of Housing argued that:
Recent migrants overwhelmingly rely on the private rented sector and already often occupy poorer quality lettings. It seems likely that if a prospective tenant is not obviously British landlords may simply reject them, given the pressures in the sector at the moment, the competition for tenancies and the potential delay if further checks are needed.
Such discrimination will be very difficult to uncover given that landlords will be making simultaneous enquiries about bank accounts, references etc. which will give them other grounds for rejecting an application. [13]
The Government acknowledged the potential risk of discrimination and has produced a code of practice for landlords, reminding them of their responsibilities under the Equality Act 2010 and the Race Relations (Northern Ireland) Order 1997.
The code of practice advises that documents should be requested from all potential applicants, and advises that rejecting a tenant on the basis of only having a limited right to rent may constitute indirect discrimination under the above-listed legislation. [14]
If a landlord wishes to use an external agency to carry out the right to rent checks, it is permitted to do so. However a written agreement between the landlord and the agency will need to be drawn up, otherwise the landlord would remain responsible for any breaches and remain liable for any civil penalties. [15]
During the Bill's Committee Stages, Norman Baker, the then Minister for Crime Prevention, argued that the cost to landlords would not be "particularly onerous," [16] but the Government's impact assessment estimated that agencies would increase their fees to cover the costs of implementing the checks, costing tenants an additional £17.9m over 10 years. No such estimates were made for the cost increase paid by landlords to agencies, as there is no legal obligation on letting agents to accept liability for carrying out the checks. [17]
The Committee also discussed the impact of the costs on the devolved Administrations, where Mr Baker stated he did not expect the Scottish Parliament's ban on pre-tenancy charges to be affected by these changes. [18]
In September 2014, Immigration and Security Minister, James Brokenshire, announced that regulations would implement 'pilot' right to rent checks in the areas of Birmingham, Walsall, Sandwell, Dudley and Wolverhampton from 1 December 2014. [19] The pilot was initially due to be evaluated in spring 2015, with checks rolled out across the rest of the country later that year. [20]
The Government said that the West Midlands area was chosen "after careful consideration." [21] A Guardian article suggests that this area was chosen because its diverse housing stock and population size would mitigate the risk that tenants would be displaced to other areas. [22]
Unlike the legislation upon full roll-out (see Section 2.1), the pilot scheme will only require landlords to carry out checks on new tenants, not on new or renewed tenancy agreements with existing tenants. [23]
As part of the consultation, the Residential Landlords Association (RLA) raised concerns that the nature of the private rented sector would mean "there is little chance of the obligation to comply getting out there to the landlord community."information sheet for the pilot areas, and has liaised with the pilot areas' local authorities. The Home Office also launched an online 'Right to Rent' tool to help landlords carry out the required checks. [24] In response the Government produced an
The Joint Council for the Welfare of Immigrants (JCWI) also carried out an independent assessment of the pilot programme alongside Shelter, the Chartered Institute of Housing (CIH), the National Union of Students and Movement Against Xenophobia. A report on the JCWI study in the Independent found that some tenants were being charged an additional £100 in administration fees, and some properties were being withheld from applicants needing time to produce paperwork. [25]
On 17 June 2015, the National Landlords Association (NLA) announced that it had met with Mr Brokenshire about the pilot scheme. [26] They were told that the report of the evaluation project would inform the national roll-out, which could be phased in area-by-area and may not include all the nations of the UK. The NLA also reported that the pilot scheme had seen four payment notices issued, with one payment having been made.
The final report of the evaluation project was expected at the end of August but at the time of writing has not been issued. [27]
On 3 August 2015, the Government announced that the forthcoming Immigration Bill would amend further the rules around right to rent when it is rolled out, with landlords who persistently failed to carry out checks facing up to a possible five years imprisonment. It was also announced that the Bill would include measures to make eviction of tenants without a right to rent easier (see section 5). [28]
Following this announcement, the NLA expressed concerns that the measures introducing the possibility of prison were not mentioned by the Government in their earlier meetings on the right to rent policy. [29] The CIH also expressed reservations about the policy, arguing that the threat of jail for improper checks of complicated immigration documents may make landlords unwilling to let to anyone who they believe isn't British. [30]
3.1 Response to the pilot scheme
The Home Office has not published its own assessment of the pilot scheme, however the results of a Freedom of Information request from The Economist issued to the Home Office prompted concern over its viability from a number of organisations and members of the press. [31]
An Economist article (8 August 2015) claimed that across the pilot, "only seven property owners have been issued with notices under the scheme" [32], with an average fine of £800. Further, it claimed:
"The pilot may have encouraged discrimination by landlords. John Stewart of the Residential Landlords Association notes that, requiring checks means that, on business grounds, "it makes more sense to rent to people who will have quick access to documents." A mystery-shopping exercise carried out during the trial found that properties were available to a Briton, but not to a non-Briton, on 11 out of 27 occasions." [33]
Rosey Carey, an immigration specialist from the Charles Russell Speechlys law firm laid out the difficulty from the perspective of a landlord – either of risking civil litigation by discriminating between
prospective tenants or, in complying with the scheme, having to recognise:
"444 documents issued by countries within the European Economic Area, and for storing copies in a manner that complies with data-protection laws" [34]
The Joint Council for the Welfare of Immigrants conducted a survey following the pilot which garnered a small number of responses at 76, 45 of which were from tenants/lodgers and 31 from landlords/agents. [35] 42% of responding landlords said that they were less likely to consider someone who did not have a British passport and 27% said they were reluctant to engage with applicants with a foreign accent or name. Only one British citizen responding to the survey had been asked whether they had permission to be in the UK in comparison with 73% of responding non-British citizens. [36]
The survey also suggested that the policy was not well understood by landlords or agents with 57% of respondents nationally and 40% in the pilot area claiming either not to have effectively understood the changes or not to have been aware of them at all. [37]
Further information on the full study is available here: JCWI report on survey following Right to Rent pilot scheme.
The Guardian reported that a Home Office spokesperson responded that "there are no indications so far to suggest landlord checks are being carried out unfairly" and that "[the Home Office] do not recognise figures suggesting only half of landlords checked potential tenants' right to rent." [38]
The new measures have been controversial amongst landlords, with over half of the respondents to the Government's consultation disagreeing with the principle of the policy. [39] An RLA survey of its members found that 82% opposed the plan. [40]
The RLA asserted that "untrained British civilians" should not be expected to undertake the work of immigration officials. [41] However the National Landlords Association (NLA) was more supportive of Theresa May's argument that landlords should help to tackle illegal immigration:
We view the policy underpinning these proposals as a positive way in which landlords can contribute towards neighbourhood cohesion and believe that this represents a recognition of the important function performed by the private rented sector in Britain today. [42]
As well as objections to the principle of the policy, landlords raised additional, specific concerns about its implementation. Previous sections have looked at concerns over the cost burden of carrying out checks, the potential for discrimination and the difficulty in informing landlords of their new responsibilities.
The RLA describe the private rented sector as a "cottage industry" which makes it difficult to easily disseminate information on new legislation, and is concerned that Home Office support for landlords may be poorly resourced. [43]
In response, the Home Office created the Landlords Checking Service to assist with enquiries, and committed it to certain service standards through the 48 hour response rule. With regards to initial dissemination of information, the Government's impact assessment has estimated it will commit £22.6m to familiarising landlords with the new rules. [44]
The Government has emphasised the "light touch" nature of the legislation, reflected in the exemptions for tenancies such as student accommodation, and the graduated penalty scale which the Government says targets repeat offending, "rogue" landlords. [45]
Some consultation responses also supported a pilot scheme to test assumptions and guard against unintended consequences. Upon the Government's announcement of the pilot scheme in the West Midlands, the Association of Residential Letting Agents (ARLA) expressed support for testing the scheme before the nationwide roll-out. [46]
5. Amendments proposed in the Immigration Bill 2015 - 2016
On 3 August 2015, Greg Clark, Secretary of State for Communities and Local Government, announced that new measures for evicting tenants with an expired right to rent would be included in the forthcoming Immigration Bill:
Measures in the forthcoming Immigration Bill will go further, and will enable landlords to evict illegal immigrant tenants more easily, by giving them the means to end a tenancy when a person's leave to remain in the UK ends - in some circumstances without a court order.
This will be triggered by a notice issued by the Home Office confirming that the tenant no longer has the right to rent in the UK. The landlord would then be expected to take action to ensure that the illegal immigrant tenant or occupant leaves the property. [47]
In line with this claim, the 2015/16 Bill looks to append to the Immigration Act 2014 a section 33D Termination of agreement where all occupiers disqualified [48], which states that a landlord may terminate an agreement when the Secretary of State has given one or more notices in writing to the landlord identifying a single or multiple occupiers of a premises as "disqualified as a result of their immigration status from occupying premises under a residential tenancy agreement." [49]
On issue of such a written directive, the landlord is able to issue a termination notice in writing no sooner than 28 days after the written directive was delivered. The notice is to be treated as a notice to quit where one would be required and is enforceable as if it were a notice from the High Court. [50]
A further section: 33E Other procedures for ending agreement [51] grants landlords the implied right to
"Terminate the tenancy if the premises to which it relates are occupied by an adult who is disqualified as a result of their immigration status from occupying premises under a residential tenancy agreement." [52]
Similar alterations are proposed to the Housing Act 1988 and the Rent Act 1977 in relation to taking possession (or transferring tenancy) of a dwelling-house. Further information can be found in the Bill, here: Immigration Bill 2015/16.
Part 2 clause 15 of the 2015/16 Bill relates to extension of the above amendments to Wales, Scotland and Northern Ireland. [53] It details that
"The Secretary of State may by regulations make such provision as the Secretary of State considers appropriate for enabling any of the residential tenancies provisions to apply in relation to Wales, Scotland or Northern Ireland" [54].
© Parliamentary copyright
(End)
[1] Home Office, Tackling illegal immigration in privately rented accommodation, July 2013
[2] HC Deb 22 October 2013 c166
[4] Property Industry Eye, Right to Rent pilot branded a 'fiasco' by top housing lawyer, Sept 2015
[5] Legislative scrutiny: Immigration Bill, Human Rights Joint Committee eighth report, 11 December 2013, HC 935 2013-14
[6] Home Office, Code of practice for landlords: avoiding unlawful discrimination when conducting 'right to rent' checks in the private rented residential sector, October 2014
[7] Home Office, Code of practice on illegal immigrants and private rented accommodation: civil penalty scheme for landlords and their agents, October 2014, section 3.3
[8] Ibid section 5.2
[9] Immigration Act 2014, section 22(9)
[10] Immigration Act 2014, section 27(4)
[11] Home Office, Code of practice, section 5.4
[12] Ibid section 7
[13] CIH letter to the Housing Minister, Tackling illegal immigration in the private rented sector, 15 July 2013
[14] Home Office, Code of practice
[15] Home Office, Code of practice, section 4.1
[17] Home Office, IA HO0094, 14 October 2013
[19] Article 6 of The Immigration Act 2014 (Commencement No. 3, Transitional and Saving Provisions) Order 2014 (SI 2014/2771)
[20] Home Office, West Midlands to be first landlord 'right to rent' check area, 3 September 2014
[21] Home Office, Written statement to Parliament: Implementation of the Immigration Act 2014, 3 September 2014
[22] The Guardian, 'Landlord check scheme to be rolled out in West Midlands', 3 September 2014
[23] Immigration Act 2014 section 35
[24] RLA's response to the Home Office's consultation on immigration checks for tenants, August 2013, para 4
[25] The Independent, 'Landlords shunning foreigners because of their accents, after new rules preventing illegal migrants from renting', 15 February 2015
[26] NLA, Immigration Act – Update, 17 June 2015
[27] The Guardian, 'British citizens without passports being turned away by landlords', 3 August 2015
[28] DCLG press release, New measures to crackdown on illegal immigrants renting property, 3 August 2015
[29] NLA, 'Right-to-Rent' – Closer to reality?, 3 August 2015
[30] Inside Housing, 'CIH warns of Immigration Bill impact', 3 August 2015
[31] Pims.co.uk, Right to Rent pilot immigration check is a failure, August 2015
[32] The Economist, Crisis Management, 8 August 2015
[33] Ibid.
[34] Ibid.
[35] JCWI, "No Passport Equals No Home": An independent evaluation of the 'Right to Rent, scheme, 3 September 2015
[36] Ibid.
[37] Ibid. p12
[38] Guardian, Pilot scheme forcing landlords to check tenants' immigration status 'has failed', 6 August 2015
[39] Home Office, Tackling illegal immigration in privately rented accommodation – The Government's response to the consultation, 10 October 2013, p12
[40] RLA landlord news hub, 'Immigration: Pilot area decided ', 3 September 2014
[41] RLA's response, section 2.4
[42] NLA's response to tacking immigration in privately rented accommodation, August 2013
[45] HC Deb 22 October 2013 c164
[46] Property Wire, 'UK pilot scheme on checking tenants immigrations rights to launch in December ', 4 September 2014
[47] DCLG press release, New measures to crackdown on illegal immigrants renting property, 3 August 2015
[48] Immigration Bill 2015, Pg. 11, Sept 2015
[49] Ibid. Sec 13, 2, 2b
[50] Ibid. Sec 13, 2, 4 - 6
[51] Ibid. Pg. 12
[52] Ibid. The tenancy must not be protected, statutory or assured as defined under the Rent Act 1977 or Housing Act 1988 which have their own directives pertaining to immigration status in each respective act.
[53] Ibid. Pg. 16
[54] Ibid. Sec 15, 1