The landscape of privately rented accommodation in the UK has evolved significantly since the introduction of the right to rent scheme on 1st December 2014, which mandates landlords and letting agents to verify that their tenants have the legal right to reside in England.
As of 13th February 2024, a new version of the right to rent guidance has come into force, offering updated directives on how to carry out these crucial checks. This refreshed guidance is not just a tool to prevent unauthorised renting – it also serves as a shield for landlords and agents, giving them all the information they need to stay on the right side of compliance.
Since its inception, the right to rent scheme has undergone several revisions. Each iteration has aimed to refine the process, from the initial 'Right to Rent Code of Practice' to the comprehensive 'Landlord's Guide to Right to Rent Checks'.
Subsequent updates have been made to navigate things like the complexities of Brexit, the digitalisation of checks with biometric cards, and the nuances of the EU Settlement Scheme (EUSS), ensuring that landlords and agents stay abreast of evolving legal requirements while making sure they remain compliant.
This updated guidance brings forth significant changes, notably the steep increase in fines for breaches, underscoring the government's tough stance on unauthorised residency. With penalties of up to £10,000 per occupier for first-time offences, and even higher for repeat breaches, the message is clear – carrying out right to rent checks to the letter has never been more critical.
This blog is not comprehensive and does not constitute legal advice. For detailed updates, visit the UK Government website or consult a legal professional.
Updates to the right to rent scheme
As an integral part of the UK's approach to regulating the rental market in alignment with immigration laws, the right to rent scheme has seen its most substantial updates this year.
These changes mark a significant shift in the requirements for landlords and the penalties for non-compliance. Therefore, understanding these changes is crucial for landlords and letting agents so they can navigate their legal obligations.
Enhanced landlord requirements
The core of the right to rent scheme requires landlords to verify that their tenants have the legal right to rent in England. This process involves conducting right to rent checks before entering into a tenancy agreement. The updated guidance, applicable for checks conducted on or after 13th February 2024, emphasises the following methods for carrying out these checks, which have been refined to ensure the process is secure and accessible:
- Manual right to rent check in person
- Right to rent check using Identity Document Validation Technology (IDVT)
- The Home Office’s online right to rent check
Clarifications and expansions
The updated guidance also provides essential clarifications and expansions on previous iterations, including:
EEA citizens and Non-EEA family members: The updates carry detailed guidelines on how to conduct checks for EEA citizens and their non-EEA family members, including those without lawful immigration status.
Armed Forces Members: The guide issues specific instructions on how members of the Armed Forces can prove their right to rent, acknowledging their unique circumstances.
The digitalisation of checks: With the shift towards digital verification methods, such as the mandatory use of the Home Office online service for biometric cardholders and the introduction of IDVT for British and Irish citizens, the updates favour these technological advancements to make the verification process more efficient and secure.
Tackling EUSS application abuse: In a bid to prevent misuse of the EU Settlement Scheme (EUSS), the guidance updates around delays and the Certificate of Application (CoA), designed to ensure that only genuine applicants benefit from the scheme's protections.
Right to rent fines have increased
Perhaps the most noteworthy change is the huge increase in fines for non-compliance, designed to really hammer home the seriousness of breaches. These penalties show that they’re taking a robust stance against non-compliance, demonstrating exactly why landlords and agents must to conduct thorough and accurate right to rent checks.
First-time breaches
Where the landlord has not previously breached the Code of Practice, the previous fines of £80 per lodger and £1,000 per occupier have, under the new guidance, increased to £5,000 per lodger and £10,000 per occupier.
Repeat breaches
For fines where the landlord has previously breached the Code of Practice, the penalties have risen from £500 per lodger and £3,000 per occupier to a staggering £10,000 per lodger and £20,000 per occupier.
What are the implications for landlords and agents?
The recent overhaul, marked by stringent requirements and increased fines, will have far-reaching implications for landlords and letting agents. As we have mentioned, these changes herald the government's determination to enforce laws within the private rental sector.
For landlords and agents, this means that compliance is not just a legal obligation but a critical necessity.
Do your due diligence
The cornerstone of compliance under the updated scheme is thorough and accurate right to rent checks. Landlords and agents must continue to exercise their due diligence to ensure that all prospective tenants have the legal right to reside in England.
Invest in training and awareness
Given the complexity and the serious consequences of non-compliance, landlords and agents need to invest in awareness. For agents, this means ensuring that all staff involved in the letting process know the updated requirements inside and out. This may involve regular training sessions, CPD, the development of internal compliance checklists, or the adoption of technology solutions that facilitate right to rent checks.
Be aware of the financial risks
As we have just seen, the increased penalties introduce a significant financial risk for non-compliance. Fines can have a substantial impact on the financial health of a lettings business, or severely hit the landlord’s pocket. In the most egregious of cases, these fines could spell the end for small-scale landlords and letting agencies. View compliance not just as a regulatory requirement, but as a crucial element of risk management.
Make sure compliance is proactive
To mitigate these risks, landlords and agents must adopt a proactive stance towards compliance. Regularly review and update internal processes, making sure they align with the latest guidance, and seek legal advice when necessary. Proactive compliance also involves staying informed about any further changes to the scheme as and when they occur.
A pivotal moment in the market
The latest updates to the right to rent scheme mark a pivotal moment in the UK's rental landscape. Landlords and letting agents must pay attention to these changes and adapt their practices to ensure compliance and, most importantly, avoid the huge increase in fines.
Adapting to these changes is not just about avoiding penalties but about upholding the standards in the UK rental market, and for landlords and agents, the message is resoundingly clear – the cost of non-compliance massively outweighs the time and presence of mind needed to make sure right to rent checks are done correctly.