Landlord’s Legal Obligations Regarding Right to Rent Checks

By Oshin Shahiean of OTS Solicitors

This article was first published in the The Letting Update Journal April 2016 Issue. To download a copy please see the PDF version below this article.

Since the 1^st February 2016, all landlords in England and Wales have been required to check that prospective tenants have a legal right to be in the UK or face a fine of up to £3,000 per tenant.

It is vital that both landlords and tenants become familiar with the new rules as:

• The Immigration Bill 2015 which is currently proceeding through Parliament could extend the penalty to a maximum of five years’ imprisonment for landlords or agents who rent premises to individuals who they know, or have reasonable cause to believe, are disqualified as a result of their Immigration status from occupying premises under a residential tenancy agreement.
• Evidence gathered by the Joint Council for the Welfare of Immigrants, suggests that landlords discriminate against tenants with complicated Immigration status and those who cannot produce documentation immediately.
• landlords need to keep records of the checks they have undertaken for those people who will occupy their accommodation. However, when doing so they will need to be mindful of existing obligations under the Data Protection Act 1998 to protect personal data by keeping it securely and only for as long as is necessary

Given these three rather alarming facts, it is imperative that landlords fully understand their obligations regarding checking prospective tenants’ right to rent property in England and Wales. landlords must also be aware that they have a duty under the Equality Act 2010 not to discriminate against individuals on certain grounds and be mindful of>landlords to operate a fine balancing act and it is no wonder many consider the responsibility far above what they bargained for when entering into the buy to let market.

The Equality Act 2010

When making right to rent checks, landlords must be aware of the principles of The Equality Act 2010 (The Act). This Act protects all individuals who possess one of the following nine protected characteristics from discrimination, victimisation and/or harassment:

• Age
• Disability
• Gender reassignment
• Marriage and civil partnership
• Pregnancy and maternity
• Race
• Religion and belief
• Sex
• Sexual orientation

A landlord who refuses to rent a property, or directly or indirectly discourages a person from applying to rent a property on the grounds of their race and/or religious beliefs may be found in breach of The Act. Individuals affected by the breach may have the right to claim damages in Court.

The Act says the following actions could be unlawful discrimination when renting a property if it's because of a protected characteristic:

• offering a property on worse or less favourable terms
• refusing to let a property to certain individuals
• treating a person badly or less favourably
• not allowing certain tenants to use certain facilities or benefits - for example, a communal garden, or imposing conditions or restrictions on their use of these things
• evicting a person or taking steps to evict them
• behaving in a way which causes an individual distress or offends or intimidates them - this qualifies as harassment under the Act
• punishing a person because they complain about discrimination or help someone else complain - the Equality Act calls this victimisation.

Risks for landlords

The Government has published a guide for landlords on how to avoid breaching the Equality Act 2010 when performing right to rent checks. However, the Shadow Home Secretary, Andy Burnham has warned that research shows that some landlords are reluctant to let to people with foreign-sounding names or accents view and/or tenant their properties.

The factors that will drive otherwise well-meaning landlords to discriminate will be based on two things:

1. Fear
2. landlords being unsure of the process

Fear

If the Immigration Bill 2015 passes with a provision to raise the penalty from non-performance or inadequate performance of right to rent checks to up to five years’ imprisonment, who could blame some landlords for choosing a British national over a migrant? Foreign nationals trying to acquire accommodation will undoubtedly suffer, as proving a breach under The Act is both difficult and expensive.

We must also remember that landlords are business people; therefore it is natural for them to avoid unnecessary risk wherever possible. It would be naive to imagine that a tenant with quick and easy access to documents would not be given preferential treatment over someone who, although may be perfectly entitled to rent accommodation in Britain, require an onerous, time-consuming checking procedure.

Where is the line drawn between good business sense and discrimination?

landlords being unsure of the process

The Joint Council for the Welfare of Immigrants (JCWI) has conducted an independent evaluation of the Right to Rent scheme and found many landlords find the checks confusing and undertake them incorrectly. The evaluation also found that...”42% of landlords are unlikely to rent to those without British passports. Over 25% would be less likely to rent to someone with a foreign name or foreign accent. These checks are not being undertaken uniformly but are instead directed at certain individuals who appear ‘foreign’. landlords are being forced to discriminate against individuals with the legal right to rent but with unclear or complicated Immigration status, in addition to those who cannot provide documentation immediately. This includes BME tenants, British citizens and those with valid leave to remain.”

Although the Government has published guides on how to manage right to rent checks, landlords are not Border Control Agents and will be expected to run the gauntlet between meeting Government directed checks whilst staying within the bounds of the Equality Act 2010. What are the chances of breaches of the Act being committed? Many will say, “fairly likely”.

Duties under the Data Protection Act 1998

Once the checks have been made and the landlord, agent or householder is satisfied that the prospective tenant has a legal right to reside in the UK, they must keep an electronic or paper copy of the documents used for verification for the duration of the tenancy and a further 12 months after the tenancy ends.

The Data Protection Act gives rights to individuals in respect of the personal data that organisations hold about them.

Under the Act, tenants whose documents are kept on file have:

• a right of access to a copy of the information comprised in their personal data;
• a right to object to processing that is likely to cause or is causing damage or distress;
• a right to prevent processing for direct marketing;
• a right to object to decisions being taken by automated means;
• a right in certain circumstances to have inaccurate personal data rectified, blocked, erased or destroyed; and
• a right to claim compensation for damages caused by a breach of the Act.

landlords should be mindful of existing obligations to protect personal>landlords to retain the original documents presented by prospective occupier(s).

The right to claim for compensation for breaches of the>courts tend to award only nominal damages. So although the risk of being hauled in front of a judge for not keeping tenants documents secure would be unusual, it is still a possibility, and such an action would be expensive in terms of costs and reputational damage.

In Summary

The Residential landlords Association strongly opposed the introduction of the pilot phase of the tests, arguing that Immigration status checks should be the responsibility of the UK Border Agency and that it placed an unfair burden on landlords who were mostly private individuals with only one or two properties to rent.

Right to rent checks place a considerable burden on landlords and agents, many of whom feel they are being asked to perform the job of the UK Border Agency for no remuneration and plenty of risk. It would be naive to think that the right to rent check process will run for long without litigation being brought on the grounds of discrimination. Therefore, landlords and letting agents must have a firm handle on the law to ensure they have the knowledge to act in compliance and avoid penalties.

About the Author:

Mr Oshin Shahiean is a qualified Solicitor and a Law Society accredited Immigration supervisor.