The March 2019 High Court ruling on The Right to Rent could have serious implications for landlords. It means that a landlord could be fined for discrimination if they attempt to evict a tenant who does not have the right to live in the UK. But that stands in contradiction to the landlord responsibilities set out under government’s Right To Rent scheme. If you rent out property, read on to find out everything you need to know about discrimination and the Right To Rent.
What is a landlord’s responsibility under the Right To Rent?
The Right To Rent is a scheme introduced by the government to try to crack down on illegal immigration. It has been criticised as being bad for tenants and landlords. Under the Right To Rent, landlords must check the immigration status of potential tenants. If they rent a property to someone who does not have permission to stay in the UK, the landlord faces fines of up to £3,000 per tenant. The landlord could also be sentenced to up to five years in prison.
If the Home Office gives notification that a tenant does not have the right to live in the UK, the landlord is expected to take steps towards eviction. If this is not carried out, again the landlord can face prosecution and fines.
Are all landlords expected to comply with the Right To Rent?
The Right To Rent does not apply to short/holiday lets. And it does not apply to commercial lets. It does apply to:
- Landlords renting out private accommodation with a lease or tenancy
- A landlord or occupier allowing a lodger to live in the property
- A tenant who sub-lets all or part of a property (unless the tenant has agreed with the landlord that the landlord will hold this responsibility. In this case, both parties must agree in writing)
- An agent appointed by a landlord to manage the Right To Rent responsibility (as long as it is in writing)
The Right To Rent applies to all new tenants. You don’t need to check the status of tenants if they have been renting your property since before February 2016. If you rent a property in the areas of Birmingham, Sandwell, Walsall, Dudley, or Wolverhampton, it applies to tenancies started on or after December 1 2014, as this was a pilot area for the scheme.
How does the High Court Ruling on discrimination affect landlords?
The High Court Ruling in March 2019 states that a landlord will be in breach of The Equalities Act if they attempt to evict a tenant when the Home Office tells them the tenant does not have the right to live in the UK.
This puts landlords in a risky position. Under the Right To Rent, landlords are at risk of legal proceedings if they don’t act when notified that a tenant does not have a right to live in the UK. But if they follow this notice, they are at risk of being charged under equalities law as well as having a civil case brought against them.
This ruling followed an earlier High Court ruling that the entire Right To Rent scheme breached human rights laws. The judges concluded that the scheme meant that some landlords were discriminating against potential tenants because of their ethnicity and nationality.
What happens now for landlords?
The contradiction between the High Court ruling and the Right To Rent Act puts landlords in an impossible situation. The Residential Landlord Association (RLA) has written to the Home Office asking for urgent changes.
However, it’s crucial to note that nothing has changed yet. Until it does, landlords must continue to check the immigration status of new tenants and follow the Right To Rent guidance.
What can landlords do to protect themselves financially?
Landlord insurance can give you peace of mind you’re protected financially. Not all policies are the same, so make sure your landlord insurance covers legal fees so you can be confident you won’t face any unexpected bills. As with all insurance, it doesn’t pay out in the long run to skimp. And don’t forget, insurance can be claimed as an expense, making it even more affordable.
For advice on exactly what cover you need, speak to a specialist landlord insurance broker, like Park Insurance. Our expert team can talk you through the different levels of cover available to find a policy to match your budget and needs. As an independent insurance broker, we’ll shop around some of the UK’s best insurance companies. We’ll negotiate premiums on your behalf to give you the best price on cover that you can rely on. Call our team on 0117 955 6835 or get a free quote.
How do I know if a prospective tenant has a Right To Rent?
There is a wide range of documents that can be used to prove that a prospective tenant has a Right To Rent. These include a British passport and a UK immigration status document granting unlimited leave. Landlords must check original documents and be confident that they are genuine.
You can find out more about your responsibilities and the processes you must follow to check a tenant’s Right To Rent in this government booklet.
Brexit and the Right To Rent
An EEA card is one of the documents that prove the holder has a Right To Rent. As a result of the Brexit process, the longer-term rights for EU citizens renting in the UK are undecided. However, nothing will change until the end of the Brexit transition period, currently scheduled for December 2020.
It’s also worth noting that EU citizens living in the UK can apply for the EU Settlement Scheme. This will allow them to continue living in the UK after 30 June 2021.
The contradiction between the High Court ruling and the Right To Rent can seem daunting for landlords. But don’t be tempted just to sit back and ignore it. If you do, you could find yourself facing costly legal fees. Even though the High Court has ruled the Right To Rent is in breach of the Human Rights Act, you still need to follow the guidelines. So make sure the Right to Rent checks are accurately observed during each new rental process.