Landlords face soaring Right to Rent fines for non-compliance

Landlords and agents in England have seen the fines being paid for Right to Rent non-compliance rocket by a staggering 405% in just two years, government figures reveal.

In 2023, the fines totalled £151,480, which is in stark contrast to the £29,960 levied in 2022.

The data also shows that the number of fines being handed out has also seen a massive rise from 32 in 2022 to 155 last year.

Now one tenant ID checking firm is telling landlords and agents to be cautious when verifying the Right to Rent status of their potential adult tenants in England.

'Landlords are facing increased legislation and compliance requirements'

The chief executive of Credas Technologies, Tim Barnett, said: "Landlords and letting agents are facing increased legislation and compliance requirements, and without the support of technology, they are vulnerable to heavy fines and even prison.

"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 they could face an unlimited fine and up to five years in prison if they are found to have knowingly rented to someone who didn't have the right to live in England."

He adds that Credas is one of the few certified Identity Service Providers to help agents and landlords remain compliant by offering remote identity verification of tenant applicants that meets Right to Rent guidelines.

Mr Barnett also warns: "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 fair selection process that has been followed stringently."

Potential tenant who is 'without lawful immigration status'

Right to Rent checks are in place to prevent any potential tenant who is 'without lawful immigration status' from renting a property.

Doing so is illegal in England and to avoid fines and a potential prison sentence, landlords and agents must carry out rigorous reference checks - and keep a record of them.

The new rules were brought in on 1 October 2022 with the Home Office offering guidelines on how landlords can verify a tenant's ID either manually, face-to-face or remotely.

This can mean using a certified identity service provider or using the Home Office online checking service.

Landlords should note that the use of video calls to verify British ID documents is no longer accepted by the Home Office.

Big hike in the fines that can be handed out

The latest Right to Rent rules came into force on 13 February with a big hike in the fines that can be handed out.

For a first violation of the Right to Rent rules, the fine rose from £80 per lodger to £5,000; and from £1,000 per occupier to £10,000 per occupier.

Penalties for subsequent violations have also seen a significant increase, with a rise from £500 per lodger and £3,000 per occupier to £10,000 per lodger and £20,000 per occupier.

This penalty increase is part of a broader effort by the Home Office to combat illegal immigration in the UK.

'How much landlords have paid out under Right to Rent'

Simon Thompson, the managing director of Accommodation for Students, said: "The rise in the number of fines and how much landlords have paid out under Right to Rent shouldn't come as a surprise.

"When the legislation was first unveiled it was a controversial law that would see landlords effectively becoming border agents.

"Landlords need to be aware of the rules and keeping accurate records when finding a new tenant is crucial."

He added: "The fines went up this year, so this is an expensive mistake to make.

"Landlords and agents need to be on their game to avoid a fine - though I appreciate this is another administrative headache for England's landlords to deal with."

How landlords and letting agents can protect themselves

Credas is also offering some helpful tips on how landlords and letting agents can protect themselves from action under the Equality Act when dealing with tenant applications:

• Clear selection criteria: Have transparent guidelines to evaluate applicants fairly
• The application process: Use a standard application form for potential tenants to reduce the likelihood of making decisions based on non-relevant factors
• Equal opportunities: Equal access for property viewings should be offered to all applicants to avoid favouritism
• Fair advertising: Marketing and advertising efforts will need to be inclusive and reach a diverse audience
• Blind applications: A blind application review process should be considered so the agent doesn't see personal information
• Technology: Use certified IDSP ID identity verification software which uses next-generation biometric facial recognition technology to perform ID checks
• Record keeping: Keep detailed records of the tenant selection process
• Monitor and review: Regularly evaluate the tenant selection process to identify any patterns of bias, or areas for improvement.