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Implications of the Immigration Bill for Landlords

About The Author

Amy Ling (Former Private Law Manager)

Amy graduated with a first in Philosophy from The University of Manchester in 2012. Following three years working within the social housing sector, Amy is currently studying for her LPC and will begin a training contract at a city firm in September 2016. Amy is an accomplished mooter, and was on the winning team in the 2015 JustCite International Mooting competition. Outside of the law, Amy is a keen runner.

A New Duty to Check

As programs such as Channel 4’s recent ‘How to get a Council House’ have shown, demand for rental housing remains high whilst numbers of available properties are woefully low. With immigration likely to be a contentious issue up to and beyond the next general election in 2015, it is unsurprising that renewed focus on making the most effective use of available properties has dovetailed the issue of tackling illegal immigration in the rental sector.

The Immigration Bill, currently in its third reading at the House of Lords, will bring in new responsibilities for landlords to take reasonable steps to assure themselves of the immigration status and ‘right to rent’ of prospective residents. By extending the duty of preventing illegal immigration to landlords, the Bill aims to help prevent illegal immigrants gaining tenancies, and “rogue” landlords profiting from exploiting illegal immigrants with poor quality housing, or “beds in sheds”. As the government argued in its consultation paper on the bill:

Illegal immigration causes economic and social problems and presents a challenge to the rule of law. The Home Office takes the lead in tackling illegal immigration but effective action requires involvement from other public and private sector bodies too.

Under the requirements in Section 22 of the bill, it will become illegal (save limited exceptions) to authorise a tenancy to a person who does not have the appropriate immigration status. Under Section 23(2), those that do will risk a fine of up to £3000. This duty of the landlord to check the immigration status of prospective tenants will be applied to all adults expected to live in the property, although not to those who become resident once the tenancy has started (unless such arrangements are planned from the start).

The new duty applies to both housing associations and private landlords, although housing associations will be exempt where the prospective tenant has been nominated by the local authority (LA). Equally, student housing is exempt if providing accommodation on behalf of a recognised educational body such as a university, or by a charity in agreement with such an educational body. Where the terms of an agreement specify, letting agents will also be required to carry out checks.

Some housing providers, who already carry out checks on prospective residents, have proactively welcomed the changes. Glasgow Housing Association (GHA), one of Scotland’s largest housing providers, has already signed an information sharing protocol with the Home Office, through which it will raise any concerns regarding the immigration status of any applicant on the basis of their completed application forms. Margaret Moore, Wheatley Group’s (GHA’s parent company) Housing Access Leader has welcomed the agreement:

GHA’s new protocol with the Home Office immigration enforcement enables us to make sure we allocate our homes fairly.

Many other providers and landlord organisations remain unconvinced of this benefit, and question the administrative and resource burden on providers.

A Stretch Too Far?

One of the interesting aspects of the new rules is the requirement to check all those that are expected to be living in the household at the start of the tenancy rather than just those whose names are on the tenancy agreement.

The logic behind this rule is that if the checks are only applied to those named on the agreement, then any persons without adequate paperwork could go “under the radar” by being a non-tenant resident. The inclusion of all persons who intend to live in the property creates some disincentive to “smuggle in” immigrants without the correct immigration status under the umbrella of those that legally reside in the UK.

However, the responsibility of landlords to carry out checks on such persons, instead of state agencies, is controversial, as it stretches the duty of the landlord to include a duty towards those with whom it has no contractual relationship with, or ability to enforce their rights under the tenancy agreement against. The National Housing Federation have argued:

We do not accept that the landlord should have any duty to check the status of persons with whom it is not entering into any kind of formal relationship

In comparison, whilst employers are also required to take reasonable steps to assure themselves of the immigration status of their employees under Section 15 of the Immigration, Asylum and Nationality Act 2006, this same requirement does not apply to volunteers. If employers are able to restrict their liability for immigration checks to those with whom they have a contractual relationship, whilst landlords are held to a stricter standard, a curious imbalance of duties within the private sector is created.

The Paradox of Expertise

The government has emphasised that the actions required of landlords will be “simple” and “straightforward, quick and inexpensive”, as the documents that can be used to check tenants include recognised identification documents such as passports, licences and ID cards. The consultation paper outlines the test for a landlord’s standard of care: unless a landlord accepts “documents that are readily apparent to an untrained person as being forged or fraudulent, they will have a ‘statutory excuse’ from paying a penalty”.

However, there is an inherent tension between the assurance that the checks will be “simple” and meet the levels needed to have the desired effect on illegal migration and rogue landlords.

Arguably, based upon the standard of care above, only those without documentation, or only very poor forgeries, will be filtered out. It should also be noted that many British people in the social housing sector, women fleeing domestic violence and the elderly do not have a copy of a birth certificate, licence or passport with which to prove their immigration status.

Moreover, many of the most prolific sources of illegal immigration are facilitated by the mass manufacturing of documents by organised criminal gangs of a quality that would easily fool the average landlord despite the introduction of advice helplines being introduced. With a standard of care set at such a low level, many rogue landlords would be able to continue their current practices by paying lip-service to the rules, knowing they will be able to rely on the statutory defence as long as they ensure that those they rent properties to have documents of sufficient quality to fool the average layperson.

On the other hand, if the standard were to be raised to a level which effectively catches out the adequate number of illegal immigrants to make the process value for money, the result is likely to be an onerous and costly administrative burden for landlords, both in terms of administration and training.  Such a scaling up of expertise would help achieve the underlying aims of the checks but is likely to only be cost-effective for larger landlords able to invest in the required training. Requiring a sufficient level of expertise is also likely to put-off those who would otherwise have taken on lodgers.

As it is, those who would consider taking on lodgers are likely to find the new checks a disincentive. This demonstrates tension in government policy, which is currently trying to encourage the renting of rooms in order to negate the effects of the removal of the spare bedroom subsidy. The incentive of being able to retain the income from a lodger’s rent without deduction in benefit will need to be balanced against the duty to check the lodger’s immigration status and fear of a fine worth many weeks’ rent. Again, the National Housing Federation has voiced concerns:

“We… do not think that the duty should apply to lodging arrangements… it creates a significant burden of [sic] individual householders (whether owner-occupiers or tenants) that choose to take on lodgers, and runs counter to the policy of encouraging lodging arrangements as a means for benefit claimants in social housing to mitigate the effects of the social housing size criteria… we think this duty is likely to be virtually impossible to enforce”

Potential for Discrimination

The requirement for landlords to prove potential tenants’ immigration statuses creates the possibility of initial negotiations between prospective tenants and landlords being framed in mistrust, thus causing discrimination to occur in favour of British applicants. As far back as October last year, the Residential Landlord’s Association argued that 82% of landlords were not in favour of the new checks and that they are likely to damage landlord and tenant relationships, as even those who are in the country legally could have their right to rent questioned. A lack of expertise could see landlords declining to provide accommodation to those with legitimate documentation, or avoiding the need to carry out checks by focussing on those who are British.

The Chartered Institute of Housing has also raised concerns that the new requirements will cause landlords to negatively discriminate against those that will require checks:

Landlords may shy away from letting to anyone who they believe not to be British. Discrimination laws will not protect these people… In trying to take a stance against illegal immigration, the government could cause significant housing problems for people who are here legally.

Queries have also been raised by groups such as the Migrant’s Rights Network, Housing Rights Network and the Joint Council for the Welfare of Immigrants, with particular regard to the increased risks of homelessness, harassment and exploitation of minority ethnic groups seeking housing. Raising the parallels with employment rules, the Migrant’s Rights Network claims that checks are sometimes used to gain greater leverage over migrant workers and have resulted in unnecessary dismissal of migrant workers. They are worried that such discrimination could also become the norm in rented housing.

Further, The National Landlord’s Association has echoed the above, highlighting the economic drivers for landlords in discriminating between applicants:

Landlords are in business to let their property as quickly as possible because when it is empty they’re running up overheads… where there is high demand for rented property with potentially several applications, landlords will be tempted to take the easiest route and those with indigenous British passports will get priority

Unless any new set of regulation is robust, providers will often follow the path of least resistance and without additional safeguards built into the legislation, it appears the margin for discrimination is wide.  Unfortunately in this case it has the potential to lead to legal immigrants being locked out of rented housing, with a risk that they will be pushed towards illegal and unscrupulous landlords.

Conclusion

It is undesirable for landlords to let their properties to illegal immigrants, firstly for immigrants (who are likely to be exploited in paying for unsafe and poorly maintained accommodation) and, secondly, for those who lose out on properties denied the opportunity of housing as a result of allocations to illegal immigrants. Such rules need to be implemented in a robust way that tackles rogue landlords rather than pushing legal and illegal immigrants towards this ‘underground’ sector. It is unlikely now that the Bill will be further amended at this late stage so providers will need to wait and see if guidance issued following Royal Assent will help answer these remaining questions.

 

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Tagged: Discrimination, Housing Law, Immigration, Property Law

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