Immigration Act 2016 – criminal sanctions for landlords who breach the Right to Rent scheme come into force on 1 December 2016

The criminal offence

As highlighted in previous updates,  new criminal sanctions introduced by the Immigration Act 2016 and aimed at landlords who rent residential premises to disqualified persons  in England will come into force on 1 December 2016.

Landlords (or agents who fail to notify a landlord) who breach their obligations will, in addition to the existing civil penalties, commit an offence if they knowingly let residential property to occupiers who do not have the right to rent.  The offence carries a sentence of an unlimited fine or up to 5 years imprisonment.

Landlord’s defence

The new penalty is intended to be aimed at more serious offenders however landlords (and agents) need to ensure all necessary steps are taken to avoid sanctions being imposed.  A landlord will have a defence to the offence if it can be shown that all reasonable steps to end a residential tenancy were taken within a reasonable period of time from, knowing or having reasonable cause to believe, that a tenant/occupier was disqualified from renting.

Whether or not a landlord will be able to rely on the defence will be a matter of fact, but the Court will have regard to the Government’s recently released Guidance Note when considering what amounts to “reasonable steps” and “reasonable period of time”.  The Guidance Note states that in situations where the Home Office has notified a landlord that they are renting to a disqualified person, a period of four weeks is considered a reasonable period of time for a landlord on notice to take advice and consider their options before taking formal termination steps if required.

The Guidance Note indicates that the defence is made out if the landlord can establish that they took active steps to terminate the tenancy. This can be either through mutual agreement or by formal action. The Court will take into account any periods where the landlord is unable to act.  For example, where they are waiting for notice periods to expire, if court decisions are to be released, and/or if they are waiting for enforcement officers to take possession.

New ways to terminate the tenancy

From 1 December 2016, there will be two new ways for a landlord (in England) to terminate a tenancy.

First, a landlord has a statutory right to terminate a tenancy where the Home Office has served a notice on the landlord stating their tenants are disqualified from renting due to their immigration status.  On being notified by the Home Office that their tenants are disqualified,  the landlord is under an obligation to serve a new prescribed 28 day notice to end the tenancy.  Once the notice has expired, the tenants no longer have the right to be in the property and can be evicted by the landlord without a Court order.

Secondly, where an order for possession is sought from the court, landlord’s will now be able to rely on a new mandatory ground (Ground 7B) for possession under the Housing Act 1988.  A new section 8 notice has been issued, requiring not less than 2 weeks notice is to be given and is to be used for all tenancies in England from 1 December 2016.

Further Information

Landlords and letting agents need to be familiar with the new provisions as severe consequences may be incurred for a breach of their obligations. If you know or suspect that your tenants or occupiers are disqualified from renting and require advice you should seek urgent legal advice.