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Author: Gurdeep Clair

A helping hand: Conducting Right to Rent checks

by Gurdeep ClairPosted on

This article is an in-depth version of the guide published in Property, The Official Publication of the NRLA (Winter 2021)

Following the end of the transition phase to Brexit, the rules regarding Right to Rent checks have been amended. Those rules have now been running for some months and we thought a review would be helpful for those landlords who decide to carry out the right to rent checks themselves.

A quick overview

Right to Rent checks were first introduced by the Immigration Act 2014. They require landlords or, if they have agreed in writing to do so, their agents to carry out checks to ensure that their prospective tenants are in England lawfully and have a Right to Rent. While this legislation is intended to cover all of the UK the Right to Rent has still not been rolled out beyond England at this stage.

What are the recent amendments to Right to Rent checks? 

Most of the changes relate to the changing relationship created by the UK’s departure from the EU. Previously, verifying lawful status for an EEA or Swiss national was simple and straightforward. EEA or Swiss nationals simply needed to present their passports or national identity cards. However, following the Brexit transition changes were implemented as of 1 July which now imposes further checks on these nationals who now need to provide evidence of their Right to Rent by producing confirmation of their EU settled status or eVisa. 

In summary the following nationals need to provide at the very minimum the following documents: 

  • British and Irish citizens – a current and valid passport or other proof of residency
  • EEA and Swiss nationals – a current and valid passport along with confirmation of EU settled status or pre-settled status or eVisa.
  • Nationals from other countries – a current and valid passport along with a valid visa. 

EEA or Swiss nationals who have obtained EU settled status should have an eVisa which they can produce on request. In the absence of an eVisa you can use the Home Office checking service but you will need to liaise with the tenant to do this. 

Conducting Right to Rent Checks

It is important to mention that the power to conduct Right to Rent checks online without a face-to-face meeting has now been extended to 5 April 2022. This means that documents can be scanned and sent by email and then verified by means of a video call where the tenant can show their original documents on screen for comparison with the scanned versions and the photos with the actual person. 

Prior to March 2020 and the Covid pandemic Right to Rent checks were carried out in person with prospective tenants producing ID documents (usually their passport but in many cases additional documents as well) to prove that they had the Right to Rent. 

Where a prospective tenant has no time limit on his Right to Rent then the checks should be carried out any time prior to the tenancy commencement. However, if there is a time limit, such as where the tenant has a time limited visa for study or another purpose then the checks must be done in the 28 days before the commencement of the tenancy. 

So who has an unlimited and limited Right to Rent? 

At the moment the following have an unlimited Right to Rent:

  • British citizens 
  • Irish citizens 
  • People with EU settled status 
  • People who have the right of abode, or who have been granted indefinite leave to remain, or have no time limit on their stay in the UK.

For those with an unlimited Right to Rent further checks are not required. This means once the unlimited Right to Rent has been established no further checks are required through the tenant’s occupation of that property. 

Those with a time limited Right to Rent:

  • people with valid leave to enter or remain in the UK for a time limited period, which includes EEA citizens with pre-settled status or EEA and non-EEA citizens granted time-limited leave under the points-based immigration system. 
  • people with an outstanding application with the Home Office. 

Those with a time limited Right to Rent must be checked again if their Right to Rent will end during the tenancy period. The follow up check should be carried out shortly before the Right to Rent expires and in the event that the tenant no longer has a Right to Rent a report will need to be made to the Home Office to avoid any sanctions. 

Additional considerations for EEA citizens

The rules for EEA citizens, Australia, Canada, Japan, New Zealand, Singapore, South Korea or the USA who are visitors to the UK are a little more complex. If they have biometric passports then they are usually permitted to remain for up to 6 months and do not necessarily need to enter with a visa. So for these individuals with biometric passports, they can prove a time-limited Right to Rent with:

  1. an original or copy of a boarding pass or electronic boarding pass for air, rail or sea travel to the UK, establishing the date of arrival in the UK in the preceding six months 
  2. an original or copy airline, rail or boat ticket or e-ticket establishing the date of arrival in the UK in the preceding six months 
  3. any type of booking confirmation (original or copy) for air, rail or sea travel to the UK establishing the date of arrival in the UK in the preceding six months 
  4. any other documentary evidence which establishes the date of arrival in the UK in the preceding six months.

However, for these citizens the Right to Rent is not strictly for 6 months because of the complex way that the Home Office operates Right to Rent. From the date that you carry out the Right to Rent check, further checks are not required during what the Home Office refers to as the ‘eligibility period’. This eligibility period is 12 months which means, despite what the documents may state, from the date that you carry out the check you do not need to do so until 12 months later. Of course it is possible for these citizens who are planning on staying longer to obtain and produce a visa in their passport on entry in the UK and to collect their biometric residence permit post-arrival. They could also have been issued an eVisa in advance of their travel. 

Your responsibility as a landlord

Whatever the prospective tenants situation and whatever their paperwork, it is important that the rules are followed correctly to avoid any accusation of discrimination.

It is important that you keep a copy of the documents you obtain and notes on the method you use to verify it. The Right to Rent checks are a legal requirement and for those that fail to carry them out or carry them out correctly could face a civil penalty of up to £3,000 per person and/or a criminal conviction which may carry a prison sentence. 

If a tenant fails a Right to Rent check a landlord is only required to take action and report this to the Home Office if the tenant is already in occupation of the property. In which case the tenant will then need to be evicted. Therefore checks before the commencement of the tenancy are always recommended as tenants can be rejected before entering into an agreement if they do not pass and nothing more needs to be done. 

This is a concise guide of the Right to Rent checks and should not be relied on solely to comply with the law. At Howsy, we frequently conduct Right to Rent checks on behalf of our Landlords across England. If you would like help with managing your rental properties, give us a call on 0330 999 1234 or live chat with us.

Gurdeep Clair is Head of Legal & Compliance at Howsy

Landlord Guide: What you need to know before letting a property

by Gurdeep ClairPosted on

When deciding whether or not to become a landlord there are a number of issues to take into consideration. You need to consider whether you have the time to dedicate. For now, here is everything you need to have in place before making the final decision. 

What to consider or inspect prior to placing the property on the market:

Leaseholder/Mortgage company consent

If you have a leasehold property or a property which is subject to a mortgage you are required to obtain the Freeholders and/or mortgage company’s permission prior to renting out your property. Such consent may be subject to certain conditions including that any tenancy must be for a minimum term and changing your mortgage product to a Buy-To-Let mortgage. 

Furniture and Furnishings

All soft furniture and furnishings provided to a tenant must comply with the Furniture and Furnishings (Fire)(Safety) Regulations 1988. This means that if items such as sofas, mattresses, curtains catch light any fire will promptly go out. To check whether your furniture and furnishings comply you need to check the items labelling. When purchasing from a UK reputable supplier, the furnishings will usually be labelled accurately. Whereas if labels can’t be identified it is best to replace them. 

Smoke and Carbon Monoxide Alarms

Newly built premises from 1992 and HMO properties must have mains operated smoke alarms with battery back ups. Older properties must have a a battery operated smoke alarm on each floor.

Properties that hold a solid fuel burning appliance, like a log fire will also require a working carbon monoxide alarm. 

Appliance manuals

Tenants should be provided with manuals for any gas, electrical or other appliance in the property.

Legionnaires disease

With Covid and the lack of visitors to the UK some properties have unfortunately remained unoccupied for some time. We recommend a legionnaire assessment for those properties least lived in. Legionella bacteria can breed in warm stagnant water and reach a concentration at which they become hazardous to health. If a property obtains a water tank, an appropriate risk assessment should be carried out. The risk assessment may be carried out by a third party unless you believe you are competent to do so.  

Internal blinds

The Blind Cord Safety Regulations 2014 require blinds to be “safe by design”. It also requires to have the appropriate child safety devices installed. All blinds must carry safety warnings and ideally landlords should consider blinds without cords especially in a child’s bedroom. It’s the landlords responsibility to change the previous tenant blinds – to ensure safety.

Insurance

If you have a Leasehold property and/or mortgage, you should have an insurance policy to remain compliant with your obligations. We recommend sorting insurance if you haven’t already. Such insurance is reassuring and can be useful in the event of serious damage such as fire. Furthermore, when your property is occupied by tenants you should also consider third party liability insurance. For example, in an event where a tenant claims that they have sustained a personal injury while in your property. 

Your previous home

If the property you intend to rent out was previously occupied by you then you may want to consider Ground 1, S.8 of the Housing Act 1988. Ground 1 is a mandatory ground for possession so if there is any chance that at any time in the future you may want to move back into the property you will need to ensure that the tenancy agreement refers to it. It is therefore important that you ensure your agent is aware of this so that they can include it in the agreement.

What to consider once marketing commences:

EPC

You must have a valid EPC. The EPC must be renewed every 10 years so if you have one ensure it is in date and you agent will include it within the marketing material. 

Gas

Under The Gas Safety (Installation and Use) Regulations 1998, gas appliances and fixed installations must be in good order and checked annually by a gas safe engineer. The certificate that the engineer provides must be provided to a tenant upon the commencement of the tenancy.  

EICR

Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 came into force in 2020 and from April this year all properties must have a valid EICR. An EICR is a report provided by an electrician who has tested the electrical installation in a property. The EICR must be provided to the tenant before they occupy the property. 

Keys

If you are renting out a property you will need to consider how many sets of keys you need to organise for your tenants, whether you want to retain a set and whether you wish to provide your agent with a set. Further fobs and other entry systems may also need to be organised. 

Utility management

Utilities should be put into the tenants name from the commencement date of the tenancy. Meters should therefore be read and those readings given to the tenant and or the utility company. Meters readings should also be taken at the end of the tenancy and again provided. Some elect to leave the management of the utility to the tenants however, this is a personal decision but one that should be considered. 

Inventory

Prior to the commencement of the Tenancy an inventory and check in should be carried out. This report will assist you with any claim that you may want to pursue against the tenant in the event of any damage. Without the report it can be very difficult to make deductions from tenants deposits if the matter is referred to a deposit adjudication. 

This is of course a long list and demonstrates the importance of getting things right in order to ensure you comply with the law and ensure your property is safe for a tenant to occupy. It is of course an easy option to hand these matters over to an agent and certainly most agents will be familiar with the process. If fail to consider this guide, there could be serious consequences including civil and criminal penalties so caution is advised. 

Gurdeep Clair
In-house Legal Counsel

The Debt Respite Scheme | About Debt Breathing Space

by Gurdeep ClairPosted on

On 23rd February 2021, Calum, CEO of Howsy, sat down virtually with David Smith, Legal Counsel at the NRLA and Partner at JMW Solicitors, to discuss the key elements of the Debt Respite Scheme or ‘Breathing Space’ legislation. – Access the recording here

The webinar was broadly split into three sections, to help clear up some of the confusion around the new legislation:

  • What is the ‘Debt Respite Scheme?
  • The types of ‘Breathing Space’
  • What does this mean for landlords?

David Smith outlined the ‘excitement’ around the implications of the new scheme and said that it was easy to become confused. Basically, the Debt Respite Scheme consisted of two different things that are not closely connected, despite what people might imagine. This legislation is the government’s answer to some of the spiralling debt issues regarding Covid’s impact. In addition, this now includes rental debt, as initially there was no provision for this.

One of the problems with the scenario regarding Covid debt means that governments needed to deal with this pressing issue. 

Government has been considering solutions.

  1. The first is statutory changes. For example, should they make a law that writes off all the debt in its entirety? What would that do to the economy? Also its impact would be significant for landlords, mortgage providers and others.
  2. Secondly, the Welsh and Scottish governments have offered loans on advantageous terms to tenants and landlords. The Welsh governments have focused on tenants while the Scottish government have put their emphasis on landlords. The problem is the issues are not equal across the whole of the UK. For example, there is more rental property in North Yorkshire and Humber alone than the whole of Scotland. Also, there is more rental in London than in Birmingham, for all types of property in that city. Therefore, different places require different solutions.
  3. The aim has been to try and find a mechanism for people to pay down debts in a graceful way instead of speeding towards bankruptcy. Also, it is important not to ruin people’s credit history while spacing out affordable payments. These regulations are attempting to achieve this.

As an aside, there needs to be some breathing space for a government that’s also under significant scrutiny and intense pressure. With the optimism revolving around the vaccine program and the hope that being the first country to be well advanced with this the UK may leverage an advantage. This may well help, alongside Brexit to stimulate the economy, create more jobs and opportunities for people to pay down their debt.

Is the Breathing Space Legislation the same across the UK?

However, as suggested earlier, this legislation does NOT apply to the whole of the UK. It covers England and Wales that are a single jurisdiction. In Scotland and Northern Ireland there is a more substantial devolved package and they will develop their own way.

What is the impact of a debt breathing space?

If a debt breathing space is instituted during this period it is not possible to chase debts. As part of that breathing space cordon, as a landlord you can’t approach a tenant, levy fees or interest.

Some period after, a debt solution or agreed deal where defaulters pay debts off over time might be implemented. Call it debt rescheduling and this legislation puts some of this on a statutory footing. Therefore, Breathing Space is just that, a temporary lockout period where no one can pursue for accrued debt until the person gets themselves in order. Then they return to the fray and the debt still remains. However, with luck, debt advice, time and a little less worry, their situation will have improved.

Will people take advantage of Breathing Space, so landlords lose out?

Landlords will be notified if one of their tenants has been granted Breathing Space. These spaces are only given by debt advice officers with an FCA licence to offer debt advice. This is important to bear in mind. The person who comes to them for help and is accepted on to the Breathing Space scheme will be required to notify the adviser of everyone who is owed money…then the debt adviser will contact those on the list.

If you are concerned about tenants ‘pulling a fast one’ please be aware that there is a computer system run by the insolvency service on their website. You can also find the government contract tender for the company that runs the system. It is an online portal and it is searchable. People have to be registered officially to appear there. So, if someone says they have a Breathing Space you can check if it’s true.

Are there any benefits for landlords of the Breathing Space legislation?

The first part of this is a positive one. Becoming registered means that at least renters are seeking professional advice. They are not burying their heads in the sand. The government is not encouraging non-payment of rent. They are actually providing professional support to help people manage more efficiently. Bear in mind also that generally, tenant rent is not pursued, and it is eventually written off. That’s not a good thing for landlords and bad for the people who lent the money. It also affects the tenant‘s credit rating. Therefore, it does not benefit anyone. It is also damaging to the economy when debts are unenforced.

Landlords and tenants need a change of behaviours and thought processes

Some may still be of a mind that a section of renters may well use it to pull the wool over people’s eyes. Yes, perhaps some might well put off the day when they are eventually going to be evicted. However, the professionals issuing the Breathing Spaces will be regulated and are not just anybody. Tenants cannot make a decision to award themselves this space.

The other thing to consider is that when tenants go into arrears it is like a one-way street and they often stop paying all together. If they manage to save any money that goes towards the next property and the spiral continues.

In practical terms, it may be that this scheme will encourage people to seek advice and achieve some debt respite. This may well allow them to stay in the property. The logic is that some people just need time and eventually the debts will be paid.

Better relationships and longer tenancies

This also fits in with the government’s initiative to encourage longer-term tenancies. They would also like to see landlords supporting tenants through life experiences and long term there should be more chance for tenants to recoup income and a greater chance for landlords to get back the money that is owed.

End of the ‘easy come easy go’ mindset

This may well appear to be an alien approach to some landlords, and it may well be the time to change habitual thinking of ‘easy come, easy go.’ Of course, there are landlords that take this philosophy to extremes and don’t do repairs. They then serve a Section 21, throw out the tenant and get a new one instead of doing anything more. The logic is that another tenant may not moan so much about the living conditions.

This really is a poor tenant and landlord relationship and one that should be stopped. This has probably contributed significantly to the abolition of Section 21. You can see the trajectory starting towards a slightly different relationship between landlords and tenants. This is quite probably inevitable and has been coming for some time.

Section 8

To conclude this section please bear in mind that if you have a debt Breathing Space with respect to rent arrears a landlord cannot serve a section 8 notice with respect to those rent arrears because they are part of the Breathing Space. This also applies to possession proceedings with respect to rent arrears. In addition, you cannot get a court order progressed and cannot enforce it or get a warrant etc. These are only in relation to debt, however.

If you issue a Section 8 based on anti-social behaviour, you are entitled to serve a notice and repossession proceedings and finally secure possession.

There is a change coming across the sector

At present landlords can serve a section 8 for a number of reasons including rent arrears or a section 21 where they simply wish to recover possession. But the reality of abolishing Section 21 is that some landlords and their advisers specifically, will have to rethink their strategy of only serving a Section 21 because right now it is difficult to defend and is used predominantly by landlord eviction specialists.

Many advisers don’t possess the skill set to prove another case so they may well have to rethink this strategy moving forward. Section 21 is not going to be available in some cases. Rent arrears will also not be an available claim because of Breathing Space therefore landlords and landlord eviction specialists will have to think about other routes towards possession. These will have to be authorised by the law and then consider how they are going to be able to prove those cases.

This is a significant change in this sector’s construction and also a change for agents in finding the evidence to prove these cases.

Find out more about the mental health breathing space here.

Letting agent refusing to disclose tenant references?

by Gurdeep ClairPosted on

When taking over the management of properties from other agents we often encounter one particular issue. Whether or not we are entitled to the tenant’s references and whether or not the previous agent is entitled to rely on the UK General Data Protection Regulations when refusing to release it. 

Is a landlord entitled to a tenant’s reference?

Put simply, yes, a landlord is legally entitled to their tenant’s reference. It is in fact a common misunderstanding in the lettings industry that a landlord is not entitled to a tenant’s reference for GDPR reasons. 

When agents act on behalf of landlords they do so under the law of agency. This means that when a landlord instructs an agent they are instructed entirely on the landlord’s behalf. By the very nature of the agent and landlord relationship, an agent is an extension of a landlord and acts on their behalf. Therefore when an agent secures a tenant they do so on behalf of the landlord and arrange for a tenancy agreement to be signed between the landlord and tenant. This of course means that there is in fact no contractual relationship between the agent and tenant. 

Any agent acting on behalf of their client the landlord is required to do so in their best interest. Landlords are ordinarily not a party or aware of the exchange between agents and tenants however, they are entitled to their tenancy documents, including references on demand due the agents responsibility and duty to account. 

Tenant references and data protection

Further with regards to the specific statement that references cannot be provided for GDPR reasons, this is wholly misconceived. Agents obtain references on behalf of their clients and they belong to those landlords. In fact when agents obtain these references they do so as data processors and it is the landlord that is the data controller for GDPR purposes. This means that agents are freed from many of the ordinary responsibilities for data protection that apply in this scenario. 

Read more about data processors and controllers and their respective roles in data protection.

Furthermore, having paid for the references a landlord is entitled to them not only to be confident about the person renting their property but also to ensure that the references have been obtained in the first instance. 

Finally, an agent can pass over data for processing by the landlord if it falls within the legitimate interests processing basis under the GDPR. Clearly, it is a legitimate interest of the landlord to have a copy of the references belonging to the tenant because they will have an interest in the identity of the person occupying their property as well as their ability to meet the tenancy obligations.

Gurdeep Clair
In-house Legal Counsel

Important changes to the Right to Rent Guide

by Gurdeep ClairPosted on

Update: 23rd August 2021

The power to conduct right to rent checks online only without a face to face meeting has now been extended to 5 April 2022.

Right to Rent checks were introduced under the Immigration Act 2014. They require landlords, and if they have agreed in writing to do so, their agents to carry out checks to ensure that their prospective tenants are in England legally and have the right to rent. 

Prior to March 2020, these right to rent checks were usually carried out in person with the prospective tenants producing not only their ID documents such as their passport but also in some cases additional documents to prove that they were in the country lawfully. 

If the tenant has no time limit on his right to rent then the checks should be carried out any time prior to the tenancy commencement. However, if there is a time limit then they must be done in the 28 days before the commencement of the tenancy. In March 2020 due to Covid, the in-person checks were abandoned and landlords were permitted to request scanned documents by email and verify them via video call. 

These online checks were expected to end on 31 August 2021. However, on 26th August the Home Office announced that it would be extended to 5 April 2020. 

Previously, verifying lawful status for an EEA or Swiss national was simple and straightforward. However, following Brexit changes have been implemented as of 1 July which requires EEA or Swiss nationals to also provide evidence of their right to rent by producing confirmation of their settled status or some other visa. 

More details can be found in the Right to Rent guide here. 

However, in summary, the following nationals need to provide at the very minimum the following documents: 

  • British and Irish citizens – a current and valid passport or other proof of residency
  • EEA and Swiss nationals – a current and valid passport along with confirmation of settled status or pre-settled status or visa.
  • Nationals from other countries – a current and valid passport along with a valid visa. 

EEA or Swiss nationals who have applied for their settled status may have an e-visa which they can produce on request. In the absence of an e-visa you can use the Home Office checking service but you will need to liaise with the tenant to do this. 

It is important to stress that since 1 July 2021 a Registration Certificate, a document certifying permanent residence or a passport or national identity card for EEA or Swiss nationals on their own are no longer acceptable for right to rent checks. 

This is a very basic guide to the right to rent checks and should not be relied on to comply with the law. A failure to carry out the checks properly can lead to a prison sentence and or a fine. Therefore it is important that the correct process is followed depending on your tenant’s nationality and if you fear that you may have not complied that you correct this sooner rather than later. 

It is important to note that if a tenant fails a right to rent a landlord is only required to take action and report this to the Home Office if the tenant is already in occupation of the property. The tenant will then need to be evicted. Therefore checks before the commencement of the tenancy are always recommended as tenants can be rejected before entering into an agreement if they do not pass and nothing more needs to be done.