In these days of low interest rates and poor returns on your cash, many have turned to ‘Buy to Let’ to supplement their income or provide a retirement nest egg. However, in recent months, residential landlords could be thinking they are under siege, with so much happening to make their investment less attractive. The Autumn Statement added a 3% stamp duty land tax ‘surcharge’ on a property purchase; the withdrawal of higher rate tax relief on mortgages (to start in 2017), and other tax relief changes, were announced previously.
Being a landlord already has a number of responsibilities, some of which carry very serious penalties for non- compliance: such as annual gas checks, smoke and CO detectors, EPC’s, even carrying out a legionnaire’s disease risk assessment. Now there is another one.
From 1 February 2016, all private residential landlords will have to check that new tenants have the right to be in the UK before renting out their property.
The Immigration Act 2014 prohibits private landlords of residential properties from allowing certain people to occupy those properties based on the immigration status of the occupiers. This duty has already been put into effect in some parts of the Midlands and will now come into force everywhere else in England.
Landlords will have to check the status of prospective tenants, and other proposed occupiers over 18, whether or not named in the tenancy agreement, to ascertain whether those parties have the right to occupy the premises before granting a tenancy. Landlords must also make sure that someone’s right to occupy the premises does not lapse. Breaching the prohibition could lead to a penalty of up to £3,000.
Briefly, a person is disqualified from occupying property under a residential tenancy agreement if they:
- Are not a “relevant national”, which is a British citizen; a national of an European Economic Area State; or a national of Switzerland.
- Do not have a right to rent in relation to the property. A person does not have a right to rent if they require leave to enter or remain in the UK and do not have it; or they have leave but it is subject to conditions that prevent them from occupying the premises.
Under right to rent, landlords should check original accepted identity documents and take copies before they allow them to occupy. Broadly, the documents are in two lists similar to those requested to check that a prospective employee has the right to work here.
Currently, there are no plans (apparently) to force landlords to do right to rent checks on existing tenants: this only applies to tenancies that commence on or after 1st February 2016
Evans Derry Partner Richard Holt comments:
These are important new requirements for any residential landlord: if a tenant cannot first provide you with the correct right to rent documents, your safest course is not to let to them: don’t rely on copies or on them being sent on afterwards
If you have any queries about the above, please contact me on 01675 464400 or email me at firstname.lastname@example.org