Right to Rent: Are you conducting the legal tenant checks?
Feb 2023: Official Government research* has found that private landlords who are managing their own properties are the least likely to understand their legal responsibilities when it comes to onboarding new tenants and checking their ‘right to rent’.
What is Right to Rent?
Right to Rent is a legal requirement for landlords to carry out before the start of a tenancy. The process involves a background check on all new tenants to establish if they have the legal right to be in the UK (and therefore have the right to rent). If these checks aren’t completed, it could result in landlords being fined with a severe penalty.
Despite the right to rent scheme being introduced in 2015, research has found that only half of all landlords claim to know about the scheme or consider themselves ‘well or quite well’ informed.
Although overall awareness of the scheme has been growing fast since its introduction in 2015, only half of all landlords who claimed knowledge of the scheme considered themselves ‘well or quite well’ informed.
Spotting red flags in tenant applications
Half of all fraudulent tenancy applications involve fake or doctored pay slips, according to rent-tech platform Goodlord, which has warned landlords to be on their guard. Its analysis of more than 300,000 tenancy applications last year found that while only one in 1,000 were fraudulent, 54% of them involved payslip fraud.
These include refusing to cooperate with open banking requests, using the wrong tax codes on pay slips, missing out key sections, or forgetting to add net/gross pay. Hiring an Agent that uses open banking or credit referencing software is the great way to outsmart fraudster tenants, as it makes it harder for them to falsify information on a document.
The basics of the ‘Right to Rent’ check:
Before the start of a new tenancy, you must check all tenants aged 18 and over, even if:
· they’re not named on the tenancy agreement
· there’s no tenancy agreement
· the tenancy agreement is not in writing
If the tenant is only allowed to stay in the UK for a limited time, you need to do the check in the 28 days before the start of the tenancy.
As the landlord you do not need to check tenants if they live in accommodation that:
· is provided by a local authority
· is provided as part of their job (known as ‘tied accommodation’)
· has a lease that’s 7 years or longer
This is because the relevant checks would have already been completed by a 3rd party who have the tools and resources to conduct them correctly. This would be completed prior to the tenant starting their tenancy at your property.
How Guaranteed Rent can help:
Did you know that Elliot Leigh work with local authorities to accommodate tenants in social housing? We pride ourselves on being able to help these tenants with quality homes, but also help landlords to achieve their guaranteed monthly income.
The responsibility of tenant checks falls under the local authority, giving landlords less admin work. Not only this, most maintenance enquiries are dealt with by our in-house team here at Elliot Leigh, meaning you'll have minimal (if not, zero) contact with the tenant.
Contact us today if you'd like to know more about Guaranteed Rent and how it could help you as a Landlord.
*The Government research was undertaken by independent canvassers at BVA BDRC with Professor Kath Scanlon of The London School of Economics and Political Science. It included a ‘mystery shopper’ exercise involving 2,000 tenants who approached landlords and agents, plus some 300 interviews with landlords.