Tenant referencing has long been a crucial element of creating and maintaining a successful tenancy, but it is also become a stick with which to beat agents, on grounds of cost and fees charged to tenants.
The bad news is that while referencing becomes ever more important (and the ructions about fees grow ever stronger) the Immigration Act has brought another level of responsibility onto the shoulders of landlords and their agents.
As letting agents and landlords in Birmingham, Walsall, Sandwell, Dudley and Wolverhampton will know, as they are in a mandatory pilot of new immigration checks, those who fail to check if their tenants have a right to live in this country, could face a civil penalty of between £80 and £3000 for each illegal occupier.
Jeremy Leaf, of Jeremy Leaf & Co., says “The Act was prompted by the discovery that up to 85 per cent of illegal immigrants live in the PRS, many of whom may have been exploited by their landlords.
In the pilot area, and probably for everyone in the future, all landlords (and agents given written authority to act on their behalf) must ask prospective tenants over 18, not just those named on the letting agreement, for evidence of their identity and citizenship. They will also have to check the authenticity of documents, such as passport, biometric residence permit, birth certificate, driving licence, letter from employer etc., before a tenancy can commence.”
So are referencing companies, landlords and letting agents now fully aware of their new responsibilities? Well, the referencing companies certainly are, the best had new services ready before the pilot started.
Andy Halstead, CEO at Let Alliance said, “Letting agents who work with us are well informed, but landlords… definitely not, those who do not work with professional letting agents are at serious risk.”
That’s a view echoed by HomeLet’s Martin Totty, (CEO Barbon Insurance Group), whose Right to Rent Survey of 536 landlords nationwide revealed that 82 per cent of landlords have not heard of the Right to Rent legislation and 92 per cent do not understand what they are required to do in order to comply with the new regulations.
Martin said, “The Right to Rent legislation is relatively easy to comply with as long as landlords understand what is expected of them. This can be a positive move for the lettings industry, and landlords need not be concerned about the process. The checks mirror those that employers are asked to do during their recruitment process – simply to ensure the applicant has the legal right to reside in the UK.
It’s very clear that a major education programme will be needed if the trial is extended.” Steve Jones, MD Rentguard
Steve Jones, Managing Director of Rentguard, is more positive about landlord awareness, “Whilst there will always be exceptions, there has been a lot of press coverage and ARLA, UKALA and NLA have been very proactive in providing information and advice to their members.
“Because of this, we have found that the vast majority of agents and landlords in the pilot area are well aware of the requirements and where they can go for support if they are unsure about how to handle any unusual situations that crop up.
“It is very clear however that a major education programme will be needed in the event that the trial is extended across a wider area.”
The right too ls for the job The list of documentary requirements looks daunting on first sight, but the referencing companies were swift to plug any potential gap in their services.
Steve Jones says Rentguard was ready, “Despite gearing up for an increase in demand; we have actually received surprisingly few enquiries from landlords or agents regarding the immigration pilot scheme. We have always requested work permit and/or visa information from prospective tenants coming to the UK from outside the EU.
“As the Act requires the landlord or their agent to see an original ID document in the presence of the individual, we include this in our referencing report to ensure landlords and agents do what is required of them.”
Martin Totty says that HomeLet has developed CheckRight, a dedicated Right to Rent checking solution, available now via letting agents in the pilot areas. The service will be made available nationwide, should the Right to Rent regulations be introduced across the country. “During the trial period, HomeLet will explore a range of options to support landlords in complying with this law should there be a full nationwide rollout of the legislation in 2015,” he said.
Landlords are not well informed – those who don’t use professional agents are at serious risk.” Andy Halstead, Let Alliance
Andy Halstead at LetAlliance says “Our clients simply select Tenant Global for every reference that they complete. There has been some noise about potential discrimination, which I believe to be nonsense, however this is eradicated if every tenant is subject to our ‘Global’ process.”
However, Darren Bignall, Director, Blinc Tenant Referencing said, “The new Act is likely to worry letting agents, as many will be unsure if they are compliant with their procedures, which could cause them to take an easier option by letting a property to an applicant whom they know will not require an immigration status check.”
The full Act may be seen at: www.legislation.gov.uk/ukpga/2014/22/pdfs/ukpga_20140022_en.pdf