Civil penalties for landlords go live from 1 December

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From 1 December 2014 private landlords in specified local authorities in the West Midlands, namely: Birmingham, Dudley, Sandwell, Walsall, and Wolverhampton, become liable to pay a 'civil penalty' of up to £3000 if they grant a residential tenancy to a person 'without the right to rent'. The scheme has been created by the Immigration Act 2014. If successful in the West Midlands it will be rolled out nationally in 2015.

Section 20 of the Act defines a residential tenancy as one which 'grants a right of occupation for residential use' and 'provides for the payment of rent', whether at market value or not. It includes any licence or sub-lease, so a landlord may still be liable if the premises are sub-let to a person without the right to rent, even if the main tenancy agreement is with a person who does have the right to rent. It applies to private landlords only.

Disqualified or with limited right to rent

A person is 'disqualified 'from occupying premises under a residential tenancy if he or she does not have permission to be in the United Kingdom or if permission to be in the UK is subject a condition preventing him or her from renting. A person however, without leave to remain, may be given permission to rent property, for example asylum seekers whose applications or appeals are being processed. Persons with limited right to rent are largely those with time-limited leave to be in the UK or someone with an EU right to be in the UK.

Penalties and defence

Section 22 of the Act prohibits private landlords from allowing occupation of premises under a residential tenancy agreement to disqualified adults. This can be someone named on the agreement or not. The landlord may be liable if the person becomes a disqualified person after the landlord grants the right to occupy. However the landlord will only be liable if 'reasonable enquires were not made' or such enquires were made and it 'should have been apparent' that the person was likely to be a disqualified person.

Agents

A landlord can abdicate responsibility for checks to an agent and this will move liability to the penalty from the landlord to the agent, but only if the agent acts in the course of business and there is a written agreement between the landlord and the agent that the agent is under an obligation to carry out the relevant checks. 

Code of Practice

The Act requires the Home Office to issue a Code of Practice. This has not yet been published but it is likely to be similar to the Code of Practice for preventing illegal working. The Code will set out the procedure for checking if a person is a disqualified person or not. There will also be a Code of Practice for avoiding discrimination.

Main points

  • Civil Penalties for Landlords goes live in the West Midlands on 1 December 2014
  • Penalties of up to £3000 per tenant
  • Agents can also be liable