How to avoid unlawful discrimination when renting property

As a landlord, you might think you have complete freedom over who to rent or not rent your property to. However, you may be breaking the law if you choose not to rent to someone based on certain ‘protected characteristics’. You also have a legal obligation not to rent to anyone who has no lawful basis for being in the UK.

If you get this wrong, you could be committing a criminal offence and may face a fine or even a prison sentence. It is therefore essential to be clear about your legal responsibilities in this area.

What is unlawful discrimination for landlords?

While unlawful discrimination can be hard to prove, you could theoretically be prosecuted if you refuse to rent to someone specifically due to their:

  • Age
  • Race
  • Sex
  • Gender identity
  • Sexual orientation
  • Marital status
  • Disability
  • Religion
  • Pregnancy or their being on maternity leave

A key point to understand is that you are free to refuse to rent to anyone for any reason, as long as it is not with respect to one of these characteristics. For example, you can still refuse to rent to someone on the grounds that they are claiming housing benefit.

It is worth bearing in mind that you do not need to give a reason when deciding not to rent to someone. It is often safest to politely say no without giving a reason as this makes it much harder for anyone to suggest that you were discriminating against them based on a protected characteristic.

It is also worth noting that you are allowed to positively discriminate i.e. give someone preferential treatment due to a protected characteristic. For example, if you have a property that is specifically adapted for wheelchair users or the elderly, you can prioritise people with those characteristics when deciding who to rent to.

The ‘right to rent scheme’

Background—the 'right to rent' scheme

The 'right to rent' scheme (the scheme) was introduced by the Immigration Act 2014 (IA 2014) as a means to prevent persons with no legal basis of stay in the UK from accessing or remaining in private accommodation in the UK. It prohibits landlords from allowing individuals who are disqualified under these provisions from occupying a property.

In respect of all tenancy agreements entered into on or after 1 February 2016, private landlords are obliged under IA 2014, s 22 to check, prior to granting a tenancy, whether or not prospective tenants or occupiers are allowed to occupy the property by virtue of qualifying immigration status. Landlords must also ensure that the tenant’s right to occupy does not lapse during the term of the tenancy.

Failure to comply with the right to rent check obligations may result in a penalty notice of up to £3,000 being served on the landlord by the Secretary of State.

Sections 39–42 of the Immigration Act 2016 (IA 2016) contain further provisions which make it easier for landlords to evict disqualified tenants in England, and introduce criminal offences for landlords and agents (whether individuals, a body corporate or partnership) who fail to carry out 'right to rent' checks or to take steps to remove disqualified individuals. Landlords or agents may be liable on summary conviction to imprisonment for a term of up to 12 months (or up to five years on indictment), a fine, or both.

The IA 2016 received Royal Assent on 12 May 2016 and, with the exception of s 42, the relevant changes are in force from 1 December 2016 (SI 2016/1037). Further regulations are required before these provisions will be extended to Wales, Scotland and Northern Ireland.

Which tenancies are affected?

Affected tenancies

The provisions apply to 'residential tenancy agreements', including any leases, licences (including lodgers) and sub-tenancies, i.e. any arrangement whereby a person pays money to occupy a property as their only or main home.

A property is considered a person’s only or main home if:

  • it is the only property they live in, or
  • if they live in more than one property, it is where they live their settled day to day life, e.g. the address registered with their doctor or for voting purposes, where most of their belongings are kept, and where their partner or children live

In the case of holiday accommodation, a property may be considered a person’s only or main home if their use of the property indicates that it is not being used for leisure related purposes and they could be intending to remain in the property for a longer period, e.g. where bookings are for three months or more or where an initial short-term booking has subsequently been extended.

Save where the scheme was piloted earlier, the requirements only apply to tenancy agreements entered into on or after 1 February 2016. The requirements do not apply in relation to existing tenancies or renewals after 1 February 2016 of a tenancy agreement granted before that date where it is made between the same parties.

Excluded tenancies

Certain tenancy agreements are excluded from these provisions, including:

  • long leases granting a term of seven years or more, containing no break clause
  • housing provided by local authorities acting in response to a statutory duty owed to the homeless, people needing social care and social housing allocation, including where a person is to be placed into private rented property by the local authority—landlords should ask for, and keep copies of, written confirmation of the same from the local authority
  • care homes, hospitals and hospices, some convalescent homes
  • hostels and refuges
  • some local authority supported homeless projects
  • Home Office accommodation for migrants
  • mobile homes (except where the mobile home owner lets their mobile home for use by another adult)
  • student accommodation where this is provided by educational institutions (in a hall of residence or via nomination by an institution) - landlords should retain a copy of any nomination document relied upon to support exemption

Does an individual have a 'right to rent'?

The landlord is responsible for identifying, through reasonable enquiries, all individuals who will occupy the property as their only or main residence.

The scheme applies to all named tenants and other occupiers aged over 18, living in the home.

It does not apply to children, except in cases where a child will turn 18 during the term of the tenancy (see 'Where must the checks be made?' below).

A landlord must not authorise any adult to occupy a property under a residential tenancy agreement unless they have a right to rent or are a British citizen.

For the purposes of the scheme, individuals will fall into the following categories depending on their immigration status:

  • ‘relevant nationals’ who have the right to rent because they are exempted as a citizen of the UK, EEA or Switzerland
  • people with the ‘unlimited right to rent’ because they have indefinite leave to remain, right of abode in the UK or the permanent right to reside in the UK
  • people with ‘time-limited right to rent’ who have limited leave to remain in the UK or are non-EEA citizens with a right to reside in the UK under EU law
  • people with the ‘discretionary right to rent’ not defined in IA 2014, but granted by the Home Office
  • people with ‘no right to rent’

A tenant or occupier has ‘no right to rent’ if they are not a citizen of the UK, EEA or Switzerland, and they require leave to remain in the UK which has not yet been granted, or they are in the UK on condition that they are not entitled to occupy premises.

Landlords' duties

Who is responsible for conducting checks under the scheme?

Section 23 of the IA 2014 sets out the 'responsible landlord' for the purposes of the scheme. The scheme applies to:

  • landlords, both individuals and businesses, who let accommodation with a lease or tenancy agreement
  • occupiers, including those in social housing, who sub-let their accommodation (except where the superior landlord agrees in writing to accept responsibility), and
  • landlords or occupiers who take in lodgers who pay money to live in their property as their only or main home

Agents

Agents may be liable under the scheme where they have accepted responsibility, on behalf of the landlord, for carrying out the right to rent checks prior to entering into the tenancy agreement.

The agent must have agreed in writing with the landlord to accept responsibility for fulfilling the scheme requirements. They must also be acting in the course of a business, but does not have to be a letting or managing agent.

It is advisable to set out any timescales for conducting the checks and reporting to the landlord to be set out in the agreement.

Where the agent reports to the landlord that a tenant does not have the right to rent prior to entering into the tenancy agreement, the landlord will then become liable. The agent should therefore keep written records/copies of their actions.

When must the checks be made?

A landlord must undertake initial checks prior to the grant of the tenancy agreement, but also where during the term of the tenancy agreement, a tenant’s limited right to occupy lapses.

Initial checks

Where a prospective tenant or occupier has unlimited right to rent, the landlord can carry out the checks at any time prior to the grant of the tenancy agreement. No further checks are required.

Where a prospective tenant or occupier has a time-limited right to rent, the landlord must carry out the checks within the 28 days before the tenancy agreement is entered into. Follow-up checks will be required.

Follow-up checks

Follow-up checks must be made either after 12 months or before the expiry of the time-limited right to rent (whichever is the later).

Follow-up checks may also be required in the case of a child occupier who was not included in the initial checks, but will turn 18 during the course of the tenancy agreement.

What documents must the landlord obtain?

To comply with the regulations, landlords must ensure that they obtain one or more of the identity documents listed under the Government’s Code of practice on illegal immigrants and private rented accommodation.

Acceptable documents to prove permanent residency rights include one of the following:

  • passport (current or expired) showing that the holder is a British citizen or a citizen of the UK and colonies having the ‘right of abode’ in the UK
  • passport or national identity card (current or expired) showing that the holder is a national of the EEA or Switzerland
  • ‘permanent’ residence card, ‘indefinite leave to remain’, ‘indefinite leave to enter’ or ‘no time limit’ card issued by the Home Office (current or expired), to a non-EEA national who is a family member of an EEA or Swiss national
  • biometric residence permit card (current or expired) issued by the Home Office to the holder indicating that the person named has 'indefinite' leave in the UK, or has 'no time limit' on their stay in the UK

Or two of the following:

  • full birth or adoption certificate issued in the UK, the Channel Islands, the Isle of Man or Ireland, which includes the name(s) of at least one of the holder’s parents/adoptive parents
  • current full or provisional photo card UK driving licence

Sufficient documents where a tenant or occupant has limited residency rights rather than permanent, include one of the following:

  • current passport or other ‘travel document’ endorsed to show that the holder is allowed to stay in the UK for a time-limited period
  • current biometric 'residence permit' card issued by the Home Office to the holder, showing they are permitted to stay in the UK for a time-limited period
  • current 'residence card' issued by the Home Office to a non-EEA national who is either a 'family member' of an EEA or Swiss national, or has a 'derivative' right of residence
  • current immigration status document issued by the Home Office to the holder with a valid endorsement indicating that the holder may stay in the UK for a time-limited period

The landlord must check these documents in the presence of the owner (or alternatively via video link), make and retain copies and clearly record the date on which the checks are made. Copies must be retained for the duration of the tenancy and for at least one year afterwards.

If the landlord has reasonable grounds to suspect a document has been forged, the tenancy agreement should not be entered into.

The Landlords Checking Service

https://www.gov.uk/landlord-immigration-check

Where an individual cannot provide these documents, but claims:

  • to have an ongoing immigration application or appeal with the Home Office
  • that their documents are with the Home Office, or
  • they have been given permission to rent by the Home Office

Then the landlord can request verification of the right to rent from the Landlords Checking Service.

The Landlords Checking Service will respond to the landlord within two working days, setting out whether the prospective occupier has a 'right to rent', whether a repeat check will be required, and if so, when. If the request has not been considered within 2 working days, the landlord will receive an automated response—a copy of which must be retained—informing them that they can let the property.

Reporting or removing an individual with no right to rent

Where an initial check finds that an individual has no right to rent, the landlord must refuse to enter into a tenancy agreement.

Where a follow-up check during the term of a tenancy finds that the individual’s time-limited right to rent has expired, the landlord must notify the Home Office as soon as reasonably practicable.

IA 2014, s 33D (as inserted by IA 2016, s 40) provides powers for landlords to remove disqualified occupiers from private rented accommodation. Where the Home Secretary serves a notice on the landlord that a sole occupier or all occupiers under a joint tenancy have no right to rent, then the occupier is no longer protected from eviction under the Protection from Eviction Act 1977. The landlord can serve a 28-day notice terminating the tenancy agreement, and can take steps to enforce the notice as if it were an order of the High Court in the event that the occupier fails to vacate the property.

IA 2014, s 33E provides that it is to be an implied term of a residential agreement (which is a tenancy or sub-tenancy or an agreement for a tenancy or sub-tenancy) other than a protected or statutory tenancy within the meaning of the Rent Act 1977 or an assured tenancy within the meaning of the Housing Act 1988, that the landlord may terminate the tenancy if the occupier is a disqualified adult.

IA 2016, s 41 adds a new mandatory ground 7B for possession to the Housing Act 1988 for assured tenancies, and a new Case 10A to RA 1977 in respect of Rent Act 1977 tenancies. Where the provisions of these sections are satisfied, the court must make an order for possession of the rented property where one or more tenant is a disqualified adult.

Alternatively, where ground 7B is established in relation to an assured joint tenancy where one or more joint tenants are not disqualified from occupying the property, the court may order the transfer of a tenancy to one or more of the remaining tenant(s), rather than making an order for possession.

Civil penalty for non-compliance

Landlords and agents who rent properties without carrying out the appropriate right to rent checks are liable to a penalty fee of up to £3,000.

Penalty notice

The Secretary of State will serve a penalty notice upon the landlord or agent who fails to comply with the requirements.

Separate penalty notices may be issued in respect of each disqualified occupier.

Criminal offences relating to non-compliance

In addition to the civil penalty scheme set out above, the IA 2016 introduced new criminal offences in IA 2014, ss 33A–33C relating to letting private residential premises to disqualified occupants.

Landlords commit an offence if:

  • the landlord knows or has reasonable grounds to believe the premises are occupied by a disqualified adult (regardless of whether they are a tenant under or named in the agreement), and has not taken reasonable steps to end the tenancy within a reasonable time period, or
  • a tenant continues to occupy the property and the landlord does not notify the Secretary of State as soon as reasonably practicable where the landlord knows or has reasonable cause to believe that the tenant’s leave to remain in the UK has expired during the course of a tenancy

Two similar offences also apply to agents

If the offences under IA 2014, ss 33A-C are committed by a body corporate or partnership with the consent or connivance of an officer of the body or partnership, the officer, as well as the body or partnership, will be treated as having committed the offence.

A landlord or agent found guilty of these offences, is liable to imprisonment (up to 12 months on summary conviction or up to five years if convicted on indictment) or a fine or both.

For more information and advice on unlawful discrimination, or any other legal issues related to being a landlord, please contact Tim Flower on 01202 292 424.