Landlords, are you ready for the right to rent?
In a recent article we highlighted essential legal obligations of landlords including the 'right to rent' legislation which is expected to be rolled out across the UK in the spring.
What does the right to rent legislation involve?
As a result of The Immigration Act 2014, all landlords will eventually be required to ensure that their tenants have the right to live in the UK before signing a tenancy agreement. This legislation will include anyone who rents out a room to a lodger or sub-lets a property.
Checks will only apply to tenancy agreements beginning on or after December 1, 2014, and must be carried out on all adults over the age of 18 who will be living in the property. Landlords will be required to confirm a person's citizenship, identity and their right to live in the UK by checking their passport of residence permit, for example.
At present, the right to rent applies only to landlords, lettings agencies and property owners in the West Midlands, specifically Birmingham, Walsall, Sandwell, Dudley, and Wolverhampton.
Copies of all relevant documentation must be retained for one year after the tenancy agreement has ended.
What happens if landlords fail to comply with the new requirements?
Landlords who neglect their obligations and let a property to an illegal immigrant risk incurring a fine of up to £3,000.
More information can be found on the Government's website.
Concern over tenants
At Redstones we recommend that landlords carry out extensive checks on all prospective tenants including the following:-
• Thorough background checks before entering into a tenancy agreement. These should include bank statements covering the previous three months, references taken from employers and previous landlords (a history of timely rental payments is ideal) and credit checks for fraud.
• Confirm your tenant's identity and proof of their current address in the form of utility bills or tax documents for example. Private landlords are typically less rigorous in carrying out checks than lettings agents but this is an important aspect of the process.
• Carry out a thorough inventory at the commencement of the rental period and request a deposit from the tenant. As a landlord, you are legally obliged to place the deposit in one of three national deposit protection schemes. To protect against damage to your property, you may also wish to take out a landlord insurance policy. Redstones Financial offers a range of financial services for landlords and can advise on the most appropriate one for your needs.
• Carry out mid-term inspections. At Redstones we carry out inspections on behalf of our clients for fully managed properties. This ensures that the property meets all safety requirements from the landlord's point of view and that no unreported damage has occurred.
If you are concerned about keeping up with the increasing legislation affecting landlords Redstones can help. Our fully managed property service ensures that all legal obligations are complied with by all of our clients.
