Right to Rent is closer than you think

Right to Rent has been widely publicised as the need to check on a tenant’s immigration status with regard to occupying residential property in England.

But in reality it is much more; status checks need to be completed on every adult occupier aged 18 or over for all English tenancies starting on or after 1 February 2016.

The effective date from which to begin undertaking checks is January 3, 2016, the start of the 28 day period leading up to February 1 because all checks must be completed in the 28 day period before the tenancy comes into effect.

Whereas in the past a landlord or letting agent might meet the lead tenant and only hear about the others who would be occupying the property, the landlord or letting agent now needs to see every adult occupant who will occupy the property even if they are not named on the tenancy agreement while simultaneously checking immigration status and documentation.

There is no need to check an occupier’s children, but the landlord or letting agent should satisfy themselves that they are under the age of 18 at the time the tenancy begins and keep evidence of this. Further checks on a child will not be needed if the child turns 18 during the tenancy, unless and until the tenancy is renegotiated, or a repeat Right to Rent check is required.

There is no requirement to create a written tenancy agreement listing all those who will live in the property, but Home Office guidance suggests that landlords, agents and householders may find it advisable to do so. If the tenancy agreement is oral or implied, the checks should still be made on all adults living at the property. If there is evidence a landlord, agent or householder was aware of a person living in the property but did not check them, they may be liable to a civil penalty, regardless of whether the agreement is written, oral or implied.

It is advisable to record the following:

• The full name and date of birth of all adults who will live in the property;

• The names and dates of birth of all children under 18 who will be living with them in the property;

• Whether each of the adults named has current permission to be in the UK.

The requirements were enacted in the Immigration Act 2014, which also lists some exemptions I have highlighted below:

• landlords and agents do not have to check the Right to Rent of existing occupiers who moved in before the requirements are introduced;

• where the start of a tenancy pre-dates the requirements, and is renewed between the same parties at the same property without a break, then there is no requirement to conduct checks;

• holiday lets (but the Home Office advises that landlords letting holiday accommodation should consider how a person will be using the property to decide whether Right to Rent checks are necessary. A letting of three months or more, or extending time-limited lettings, would be circumstances where checks would be advisable.);

• agreements to which the Mobile Home Acts 1983 applies, that is an agreement under which a person is entitled to station a mobile home on a site and use it as their only or main home, are exempt. However, should a mobile home owner decide to let their mobile home for use by another adult, this residential tenancy agreement will be subject to the Scheme.

• A residential tenancy agreement that grants a right of occupation in accommodation provided by an employer to an employee, or by a body providing training to an individual in connection with that training, is exempt from the Scheme.

• All halls of residence (whether the landlord is an educational institution or private accommodation provider) are exempt from the Scheme, as is any accommodation provided for students directly by a higher or further educational institution.

• Leases which grant a right of occupation for a term of seven years or more are exempt. An agreement will not grant a right of occupation for a term of seven years or more if the agreement can be terminated at the option of a party before the end of seven years from the start of the term.

The following two groups of people have unlimited right to rent: British citizens, EEA and Swiss nationals.

A landlord will need to see evidence of any adult occupier’s identity (over 18 years) and citizenship e.g. passport or biometric residence permit and compare the original document with the individual face to face. Copies of the documents should be taken and retained for one year after the tenancy ends. The Home Office has published a landlord's guide to checking immigration documents, which may be useful for landlords click here. 

If it is not possible to check the documents before entering into the tenancy agreement (e.g. if the potential tenant is overseas), the landlord/ agent may enter into a conditional tenancy agreement – conditional on production of evidence of Right to Rent before moving in. 

The Act makes it an offence to let premises to someone (either the tenant or any adult occupying the property with them) who the landlord knows or has reasonable cause to believe does not have the Right to Rent.

Given the potential for discrimination, the Government’s code of practice advises that documents should be requested from all potential applicants. Refusing a tenant because they have limited right to remain may amount to indirect discrimination.

When Right to Rent was first mooted, there were concerns that people born in the UK might not hold a passport and therefore find it difficult to prove their residence entitlement. However, a combination of documents such as a birth certificate and driving licence (the guidance states with or without a counterpart, although counterparts have been invalid since June, 2015), are acceptable proof.

A landlord should know or have reasonable cause to believe a tenant does not have the Right to Rent if:

• It failed to check the documents in the first place.

• The tenant had a time limited or discretionary Right to Rent and that period has now ended. This means the landlord must monitor and make sure an occupier’s right to occupy does not lapse.

• The Home Office has served notice that the occupant has no Right to Rent. 

If a person sub-lets a property, they will have responsibility for making the checks, although this responsibility can be passed up to the landlord by agreement. It is recommended that the agreement as to allocation of responsibility for checks is in writing. Likewise, anyone who takes in a lodger should check they have a Right to Rent before allowing them to move in.

It is worth bearing in mind that in his March, 2015, Budget statement the Chancellor included under the section about a sharing society measures to amend its model agreement for an assured shorthold tenancy by summer 2015, to provide that tenants in private rented accommodation can request their landlord’s permission to sub-let or otherwise share space, on a short-term basis. 

The Immigration Act 2014 provides for a “civil penalty scheme” whereby landlords and their agents could face fines of up to £3,000 per tenant. If the Immigration Bill 2015 is approved in its current form, criminal sanctions may apply in situations where a landlord or its agent knows or has reasonable cause to believe that a person does not have a Right to Rent. Criminalising the sanction means that imprisonment may become an applicable punishment.

At Carter Jonas we are taking advice from the Association of Residential Letting Agents (ARLA) and Pain Smith Solicitors putting in place procedures ahead of the legislation taking effect in February in the areas in which we operate.  Where we do not manage our clients’ properties they will need to put in place their own procedures to check the tenant’s right to rent.

The landlords Code of Practice gives very helpful guidance and I recommend that everyone involved in residential lettings studies it. This link connects: https://www.gov.uk/government/publications/right-to-rent-landlords-code-of-practice/code-of-practice-on-illegal-immigrants-and-private-rented-accommodation#only-home

A landlords’ guide to checking immigration documents can be found at: https://www.gov.uk/government/publications/rules-and-acceptable-documents-right-to-rent-checks

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk

Farm enterprises and renewable initiatives

Farm enterprises that have taken up renewable initiatives, such as anaerobic digestion plants which also supply heating to tenanted properties need to be aware of rule changes that come into effect by the end of this month.

The Heat Network (Metering and Billing) Regulations 2014 are bringing a change of legislation that will affect how tenants of buildings with communal heating systems will be invoiced for their use of heating, cooling and hot water to ensure that end-users of heat are only charged for the heating they use.

Obligations imposed by the regulations on any supplier of central heating systems are wider than previous legislation and include landlords and owners of buildings where heating is supplied from a central source to more than one tenant, for example shared offices, within the definition of a “supplier”.

As well as landlords who invoice directly for heating charges, buildings where heating is included within rent or service charge payments are also included.

By December 31, 2015, each supplier must send a notification to the Secretary of State for Business, Innovation and Skills via the National Measurement and Regulation Office providing estimates of the yearly heat capacity, heat generated, and heat supplied applying to the heat source in question. 

The Secretary of State must also be supplied with practical information about the location of the heat supply, the type of building in which it is contained, and the type of customer supplied. Following the initial notification this information will need to be updated with the minister every four years.

By December 31, 2016, the supplier must install meters in its building which measure the individual consumption by the end-user in all cases unless it is not cost-effective or not technically feasible to do so. The regulations contain a test for whether or not it is cost-effective for meters to be installed. 

Where it is not cost-effective, this must be considered again every four years and meters installed upon any substantial reconstruction of, or installation of new services in, the building.

By December 31, 2016 heating for each end-user will be separately metered where possible based on actual consumption. 

Non compliance by a supplier is a criminal offence and punishable with a fine of up to £5,000 per offence plus daily penalties of £500 until the breach is remedied.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Badger Culls

When are we going to find out if the badger culls have cut TB in cattle?

As part of the government’s 25-year strategy to eradicate TB, farming minister George Eustice visited the West Country to launch a new cross-industry TB biosecurity campaign which includes the introduction of the TB Hub (www.tbhub.co.uk), a website providing beef and dairy farmers with a range of free advice.

But he was unable to answer my question.
 
The website has been created by the Agriculture and Horticulture Development Board (AHDB) in conjunction with the Animal and Plant Health Agency, the British Cattle Veterinary Association, Defra, Landex and the NFU, to provide information on all aspects of dealing with TB on farms.

Among the guidance is a five-point plan outlining measures farmers should take to help protect their herds from bovine TB. The plan includes the following common sense advice:

• Restrict contact between badgers and cattle 
• Manage cattle feed and water to reduce the chance of contamination by other infected cattle or badgers
• Stop infected cattle entering the herd by careful investigation of the TB history of purchased cattle and post movement testing of new cattle before introducing them in to the herd
• Reduce risk from neighbouring herds by awareness of their TB status and ensuring barriers between herds are kept in place
• Minimise risk of infection from cattle manure by ensuring all manure is well rotted and spread on land used for arable purposes or if spread on pasture the land is not grazed for at least two months.

The website expands on these points in detail and while some of the measures are more practical than others, the clear message is that although the government will continue the badger cull in certain areas, they also expect farmers to do their bit by heeding the biosecurity measures set out in this five-point plan. 

George Eustice was also asked about the effectiveness of this autumn’s badger culling programme in three areas of the West Country and although he said that we will have to wait for the official results to be announced it appeared he felt things had gone rather more successfully this year than in the previous two. 

However, what we really need to know is not how successful marksmen have been at killing badgers but whether the culling has had any impact on the occurrence of TB in cattle.  Although we have anecdotal evidence that it has helped, the government needs to carry out a proper analysis of the evidence which will help inform the decision whether the cull areas should be expanded.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Defra's updated version of its Farm Business Income

Defra has published an updated version of its Farm Business Income (FBI) estimates for the 2014-15 year which shows that 60 per cent of cereal farms failed to make a profit if income from EU support payments and other diversified income is excluded.

This not only demonstrates the challenges facing farmers in light of the fall in commodity prices but it also demonstrates the importance of diversified income streams without which many farms will struggle to survive. And here the widening digital divide is becoming an increasing problem.

For example when contemplating the conversion of farm buildings to offices, one of the most important features to consider is whether it is possible to provide access to broadband. This is even beginning to impact on the letting of some residential properties on rural estates I manage here in the South West.

Anyone living and working in Wells, as I do, will be all too familiar with the inadequacy of our digital infrastructure and mobile phone reception, but there is hope that these inadequacies will eventually be remedied.  However, in more remote rural areas there may be very little hope of ever being connected via the existing infrastructure.

As a result of this widespread rural problem the Country Land and Business Association (CLA) has submitted written evidence to an inquiry by the Business, Innovation and Skills Select Committee on the digital economy. 

The CLA noted that the government has put significant emphasis on how digital technology can increase productivity in our economy and, in their evidence, highlighted the appetite in rural areas to use new technologies.  However, the CLA raised worries about how the lack of connectivity in rural areas is contributing to the ever widening rural-urban digital divide.

This is becoming a big problem for all businesses in the countryside, not least farmers who are increasingly being required to submit information electronically such as registering cattle identification and movement information or VAT returns and these requirements are only going to increase.

Failure to address this digital divide will result in farmers and other rural communities becoming increasingly isolated from the wider economy, which is a serious concern for the future of the countryside.


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Solar parks and turbines

The sight of solar parks and wind turbines are not to everyone’s taste but such visual impacts must be balanced against the prospect of more extreme weather patterns associated with climate change.

I will pin my colours to the mast – I do believe that burning fossil fuels is contributing to climate change.  

I recall doing A-level chemistry back in the early 1980s and when my teacher explained the potential impact of liberating greenhouse gases into the atmosphere, and many of his predictions appear to be coming true.

For instance 2014 was the warmest year on record in the UK and eight of the UK's top ten warmest years have happened since 2002.  Similarly 2014 was the fourth wettest year since the Met Office records started in 1910, meaning we have experienced five of the UK's top six wettest years since 2000.

I believe this is sufficient evidence to make us think very seriously about the impact that burning fossil fuels has on our climate.  But the government has taken a retrograde step in turning off support for many renewable projects so abruptly and yet at the same time also appears to be encouraging fracking. This does not make climatic sense.

Then we saw our government do a deal with the Chinese government over the building of a new nuclear power station at Hinkley Point, demonstrating that David Cameron does see the need to subsidise non-carbon energy production to provide security of supply.  I do not disagree with this but I do question the muddled thinking regarding the government’s wider energy policies and the impact this is having on the renewable energy sector in particular.

This sector has grown strongly from virtually nothing over the last 10 years and has become increasingly efficient with the result that solar projects are on the verge of becoming cheaper than gas as a means of generating electricity. 

Therefore reducing subsidy for solar projects was the right thing to do, but cutting it by 87 per cent is too extreme and will constrain the development of this form of renewable energy which has not only helped reduce the production of climate damaging gases but also provided opportunities for many farmers and landowners here in the South West. 


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Small number of applications for the CSS have been confirmed

Natural England have confirmed that only 2,314 applications for new Mid-Tier Countryside Stewardship Scheme (CSS) were received by the deadline of September 30. This is a disappointing figure and raises concerns that many farmers in agri-environment schemes will now simply withdraw their land when the existing scheme ends.  

Also, because the new scheme is competitive I expect a significant number of applications will be turned down.  

This is perhaps no surprise as the existing scheme which included the “broad and shallow” Entry Level Scheme (ELS) was easy to enter and critics would say it delivered little in environmental gain. However, it did get many farmers and landowners involved in agri-environment schemes to the extent that around 70 per cent of English agricultural land is covered by some form of environmental scheme and this must have delivered some environmental benefit.

But, as funds have got tighter, the demands of the new CSS have increased and it appears they have risen to such a level that they have discouraged many farmers from even applying.  This is despite the difficult economic situation facing many of them.  

It seems the new scheme has either been designed to discourage all but the best applicants or it has been “over-engineered” - making the application and delivery of the scheme too onerous and expensive for most farmers.  My guess is that it is a bit of both but we know for certain that many farmers and landowners will not be entering the new scheme when their existing one expires.

As a result, the Country Land and Business Association (CLA) is calling for comprehensive revision of the scheme for next year.

CLA president Henry Robinson said: “Landowners and farmers want to protect and improve the environment, and we want the new Countryside Stewardship Scheme to succeed. However the chaos of the new scheme’s introduction and the complexity of its requirements have put land managers off participating next year.

“We have been warning the government for months, but they failed to take the swift and decisive action that was required to salvage the scheme. England’s natural environment and wildlife will pay the price. This is a big step backwards in our efforts to improve the environmental management of our landscapes.

“Defra must now enter into open discussion with land managers to ensure that next year’s scheme is much improved both in terms of being viable for applicants and also delivering the best environmental benefits.”

However, it remains to be seen whether Defra will listen to such calls or whether attracting only limited numbers of committed farmers and landowners is the purpose behind the new Countryside Stewardship Scheme. 


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

The hokey cokey referendum

We’ve now entered what commentators are calling ‘a phoney war’ in what could be a two year long run-up to the referendum on European Union (EU) membership which is to take place before the end of 2017.

Unlike the 2014 Scottish Independence referendum, the question on the ballot paper won’t be ‘Yes’ or ‘No’. It will be ‘Stay’ or ‘Leave’.

The campaign groups don’t fall in to the convenient polarities of pro-business versus anti-business or the political groupings of left and right and so, we,  the electorate are not going to be allowed to be lazy in our thinking about this referendum and the consequences of its outcome. 

It is a referendum which will see voices of business line up on both sides and some, in all likelihood, stuck in the middle seeing convincing commercial and policy arguments on both sides.  

It’s not just any old referendum either. It’s a referendum in which the ex-boss of Marks and Spencer, Lord (Stuart) Rose is heading up the ‘Stay’ campaign.  The complexity of the issues is reflected in the make up of the ‘Go’ camp which has two main campaign groups in profile: ‘Vote Leave’ and ‘Leave.EU’. All three groups got under starters orders in October.

‘Vote Leave’ sees formal Conservative and Labour ‘Brexit’ groupings come together in an umbrella membership which hosts individuals with UKIP credentials too. ‘Leave.EU’ positions itself as a more grass-roots movement and the financial sector experience and entrepreneurial business-chops of its ‘ambassadors’ are showcased on its website’s home page.

Confusingly - and refreshingly - both ‘Stay’ and ‘Leave’ are happy to admit to being the patriotic choice. It is to be hoped that the absence of jingoism in the course of the pre-vote debate and the actual ballot itself remains because the presence of national stereotypes does nothing for the clarity of thought we require in making our decision.

At this early stage of the publicity campaigns, there appears to be an absence of ideology too with more of an emphasis on pragmatism. Upon launch, Lord Rose was keen to highlight that the ‘Stay’ campaign was critical of the European Union and voting to remain in the EU was the best way to reform it for the good of the UK.

Leave’s arguments point to the benefits and flexibility of financial and policy independence in the modern world pitted against the inflexibility that being in a single currency imposed on countries like Greece in dealing with the fall out from the financial crisis of 2008. In making the case for Brexit, some free marketeers point to the fact that Euro currency countries could not make their own sovereign case to the International Monetary Fund (IMF) to re-finance debt which might have set them in better stead to weather their stormy financial situation.

While shaking it all about when it comes to Britain’s future, this referendum campaign is also stirring up times past.

The 1975 referendum to stay or leave the European Economic Community (EEC) brought together some strange bedfellows in Prime Minister Harold Wilson and the Leader of the Oppostion, the Rt Hon Margaret Thatcher MP backing the ‘Yes’ campaign.  While supporters of internationalism – which, at the time, included high profile members of the Cabinet in Tony Benn and Michael Foot – were opposed to remaining in the EEC.

Plus ça change, plus c’est la même chose as the saying goes.

Will Mooney MRICS
Partner
Commercial, Cambridge