Immigration Issues

Disqualified Persons and Limited Rights

Certain persons who may not occupy privately rented property as their only or main home as a result of their immigration status; these are “disqualified persons.” Others  have a “limited right to rent property” because of their immigration status.

In general, those who entered the UK unlawfully, or have overstayed their leave to enter or remain in the UK, will be disqualified and those persons who have a limited right to enter or remain in the UK have a limited right to rent.

British citizens, EEA nationals and Swiss nationals, have the right to rent property. A person is disqualified from occupying property under a residential tenancy agreement (they do not have a “right to rent”) if they are a person who needs leave to enter or remain to be lawfully in the UK but does not have leave or their leave is subject to a condition that would prevent them from taking up occupation at the premises.

A person whose leave to enter or remain in the UK is invalid, has ceased to have effect (whether by reason of curtailment, revocation, cancellation, passage of time or otherwise) will not have leave to enter or remain in the UK and so will not have a right to rent. A person who has leave subject to a condition that they reside at a specific address, which is not the address of the premises which are the subject of the agreement, will not have a right to rent that property.

The Secretary of State has the discretion to grant a person the right to rent even though they would otherwise be disqualified as a result of their immigration status.

Persons who have a “limited right to rent” are those  who have been granted leave to enter or remain in the UK for a limited period of time, those persons who do not require leave to enter or remain as the qualifying family members of EEA nationals, or persons who enjoy a right to reside in the UK which derives from the EU Treaties.

Prohibition on Letting

A landlord must not allow an adult to occupy property under a residential tenancy agreement if they are a disqualified person. The restriction is contravened where

• a landlord enters into an agreement which allows a disqualified person to occupy the property
• while at the time the landlord enters into the agreement the person who will occupy the premises has the right to rent, that right comes to an end while they remain in the property.

A person does not have to be named in a tenancy agreement for these provisions to apply. A landlord is expected to make reasonable enquiries regarding the persons who will take up residence under an arrangement before entering into an agreement and even if the individual is not specifically named in any written agreement, the landlord will be responsible for them if they have authorised their occupation or should have been aware of their occupation, from the making of reasonable enquiries.

A landlord cannot attempt to avoid liability for a penalty by relying on a provision in a residential tenancy agreement which states that a disqualified person is not permitted to occupy the premises if they subsequently enter into a side agreement which allows a disqualified person to take up residence without undertaking the required checks or if they otherwise waive a breach of such a provision.

The restriction is not intended to affect the validity or enforceability of any provisions of a residential tenancy agreement. A breach of the restriction will not impact on a landlord or tenant’s ability to enforce any provision in the agreement that they have entered into.

A landlord letting to someone who has limited leave in the UK should check that they have not become disqualified from renting either before their leave is due to expire, or one year after the tenancy begins, whichever is the longer period.

Where the occupant has indefinite leave to remain, the landlord will not need to undertake a repeat check; while their biometric residence permit may need to be renewed within a period of 10 years, the landlord can rely on the fact that the leave they have been granted is indefinite and no further check is required.

Penalty notices

The Secretary of State may impose a penalty of up to £3,000 on a landlord for each disqualified adult that they allow to occupy property. Where liability for a penalty arises because the landlord entered into the agreement which allowed occupation by a disqualified person, then the landlord who entered that agreement will always be responsible. This is to stop landlords who sell property with sitting tenants from passing the burden of a penalty onto the new owner who had no involvement in selecting or checking the occupants.

Where liability for a penalty arises because a person was allowed to occupy premises at a time that they had a right to rent, but that person has subsequently become a disqualified person who remains in occupation, the landlord at the time of the contravention will be responsible.

This means that where a landlord acquires the freehold of a property with sitting tenants, they will take on responsibility for ensuring that any checks are undertaken in respect of occupants who have a limited right to rent at the required intervals and taking the prescribed steps should those occupants subsequently become disqualified persons.

Excuses available

A landlord can establish an excuse if he carries out checks according to the prescribed requirements and the carrying out of those requirements did not show that the prospective occupant was disqualified. There is a specified  duration before a tenancy commences within which the checks must be carried out.

In the case of those with permanent status in the UK, the checks may be carried out at any time before the tenancy is entered into. For those subject to immigration control and/or who have a limited right to rent the checks must be carried out within a set period prior to the commencement of the tenancy. This period will be specified by order.

If an occupant’s leave expires during a tenancy the landlord can establish an excuse by carrying out repeat checks at the specified intervals, (or arranging for an agent to do so), and by then telling the Secretary of State that a disqualified person is in their property if the repeat check identifies that the person’s limited right to rent is no longer valid. They must make this report as soon as reasonably

An agent contracted by a landlord to carry out checks on an occupant’s right to rent can be held liable for any breach of the restriction on renting to disqualified persons.

The agent has an excuse either where they can demonstrate that they carried out relevant checks, but the checks did not reveal that a person was disqualified or where they informed the landlord that the occupant was disqualified before the tenancy beganIn the latter eventuality the specific arrangements set out in the agency agreement may determine which relevant landlord the agent must report to.

In the case of an occupant who became disqualified during the tenancy, the agent has an excuse if they have carried out repeat checks in respect of the individual at the specified intervals, and informed the Secretary of State that a disqualified person is in the property if the repeat check identifies that the person’s limited right to rent is no longer valid. They must make this report as soon as reasonably practicable after making the repeat check.

A landlord cannot attempt to avoid liability for a penalty by relying on a provision in a residential tenancy agreement which states that a disqualified person is not permitted to occupy the premises if they subsequently enter into a side agreement which allows a disqualified person to take up residence without undertaking the required checks or if they otherwise waive a breach of such a provision.

Penalty

A penalty due to the Secretary of State may be recovered as though it were due under an order of a court.

The Secretary of State does not have to establish whether the landlord or agent can establish an excuse before serving a penalty notice.

A landlord or agent may object to a penalty they have been given by the Secretary of State for renting property for use by a disqualified person and by which the Secretary of State must consider objections. They may object to his liability to the imposition of a penalty and to the amount. He may also object on the basis that he is not the liable party, is excused payment because he has complied with the requirements for landlords, or agents, or that the penalty given is too high in the circumstances.

The Secretary of State must consider the objection, with regard to the Code of Practice; and may decide to cancel the penalty, change the amount which must be paid as a result of the objection either by reducing or increasing it, or take no action and leave the penalty notice as it stands. The Secretary of State must notify the agent or landlord of the decision within a set period.

A landlord or agent on whom a penalty is served may appeal to a court on the grounds that he or she is not liable to the penalty, the amount is too high, or he or she is excused payment having complied with the specified requirements.

Code of Practices

The Secretary of State has issued a code of practice in relation to the residential tenancy provisions. The code of practice must set out:

• the criteria to be applied in deciding whether to impose a penalty and the amount of that penalty;
• guidance regarding when a person will be considered to be using premises as their ‘only or main residence’ for the purposes of these provisions, with particular emphasis on holiday lets and lets made in connection with business travel;
• details of the steps landlords (including superior landlords who accept responsibility for compliance with the scheme ), and agents will reasonably be expected to take to determine who will be occupying the premises under the terms of a residential tenancy agreement.

The  Secretary of State has  issued a code of practice to landlords and agents specifying how to avoid contravening the Equality Act 2010 or the Race Relations (Northern Ireland) Order 1997 while avoiding liability for a civil penalty. The Secretary of State must review that code of practice from time to time and any revisions that are made to it must be laid before Parliament.