The latest figures published by the UK Government* have shown a surge in fines to landlords and letting agents for non-compliance with the Right to Rent rules.
There was a 405% increase in fines issued to Letting agents and landlords for a lack of compliance when it came to checking a tenants legal right to rent in the UK, with the total fines issued in 2023 totalling £151,480 compared with just £29,960 in 2022. The number of penalties issued also spiralled, up from the 32 recorded in 2022, to 155 penalties in 2023.
Landlords and letting agents need to stay vigilant when checking the Right to Rent of all their adult occupiers in England, before they enter into a new tenancy agreement. A Right to Rent check prevents those ‘without lawful immigration status’ from renting a property illegally. To avoid fines for non-compliance, landlords and letting agents need to conduct referencing checks accurately and keep records of those checks.
It’s more important than ever that landlords and letting agents conduct these checks and keep accurate records for a year after the tenancy agreement ends, as an increase in the maximum Right to Rent fines came into effect on 13 February 2024. For a first breach of the rent-to-right rules, the fine has increased from £80 per lodger to £5,000 per lodger and from £1,000 per occupier to £10,000 per occupier.
Fines for repeat breaches have also gone up dramatically, with an increase from £500 per lodger and £3,000 per occupier to £10,000 per lodger and £20,000 per occupier. The penalty increase is part of a wider crackdown on illegal immigration in the UK by the Home Office.
Landlords and letting agents are facing increased legislation and compliance requirements but certified Identity Service Providers like ourselves can help them remain compliant by offering remote Identity Verification that meets Right to Rent guidelines.
Landlords and letting agents also need to be able to demonstrate a fair tenant selection process to avoid claims of unlawful discrimination in respect of any of the protected characteristics under the Equality Act 2010 such as age, gender reassignment, race including colour, nationality, ethnic or national origin etc. They will need to demonstrate, with evidence, that they have a carefully considered a fair selection process that has been followed stringently.
- Here are some tips on how landlords and letting agents can prepare themselves for the Rent Reforms in tenant applications:
- Develop clear selection criteria: Establish objective and specific criteria for tenant applications, such as credit score, income-to-rent ratio, rental history, and references. Having transparent guidelines can help agents evaluate applicants fairly and avoid subjective judgments.
- Standardise the application process: Use a standard application form for all potential tenants which will reduce the likelihood of making decisions based on non-relevant factors such as the tenant having pets, reputation of tenants, stereotyping of cultures, previous track records of tenants.
- Offer equal opportunities to view properties: Provide equal access to property viewings to all interested applicants. Avoid favouring certain applicants by offering exclusive viewings or privileged access. As a reminder, it is against the law for an agent to discriminate against non-British/Irish nationals in order to ease Right to Rent workloads.
- Conduct fair advertising: Ensure your marketing and advertising efforts are inclusive and reach a diverse audience. Avoid language or images that could imply preferences for specific demographics.
- Blind application review: Consider using a blind application review process, where the agent doesn’t see personal information, such as the applicant’s name, gender, or race during the initial screening phase. This helps eliminate unconscious biases that may arise from such information.
- Use technology: Use certified IDSP ID identity verification software which uses next-generation biometric facial recognition technology, so that you can perform ID checks in real-time and confirm that the ID matches the actual person.
- Educate staff and stakeholders: Ensure that all staff involved in the tenant selection process, including property managers and real estate agents, are aware of fair housing laws and receive training on identifying and avoiding bias.
- Diversify the team: If possible, involve multiple individuals in the tenant selection process. Diverse perspectives can help identify and address potential biases.
- Document decision-making processes: Keep detailed records of the tenant selection process, including reasons for accepting or rejecting applicants. This documentation can be valuable in case any fair housing complaints arise.
- Monitor and review the process: Regularly evaluate your tenant selection process to identify any patterns of bias, or areas for improvement. Be open to feedback from applicants and make adjustments as needed.
- Partner with fair housing organisations: Collaborate with fair housing organisations or local agencies that promote fair housing practices. They can offer guidance and resources to ensure compliance with fair housing laws.
*Source: Immigration Enforcement data: Q4 2023 – GOV.UK (www.gov.uk)
