In the near future, how landlords and their agents screen potential tenants will have to change. After a controversial pilot in the West Midlands, the “right-to-rent” programme, which is the UK government’s latest attempt to combat illegal immigration, will roll out across the rest of England.
Under right-to-rent, before a tenant can move in, the landlord or their agent must verify the applicant’s immigration status.
Note: Right-to-rent also applies to those subletting their property.
Review. Verify. Retain.
Complying with the regulation involves inspecting an individual’s documents, verifying their nationality, and maintaining copies of the documents used to verify the prospective tenant’s right to reside in the UK.
Right-to-rent comes with stiff penalties for failure to comply ranging from £80 to £3,000, depending on number of violations involving the landlord in the previous three years.
Can companies rely on the government?
While the government offers a free service that covers the counties originally in the pilot, whether that service will include the remainder of the country remains to be seen.
Further, the government’s online service does not support batching of requests, which is a particular concern for property agents and landlords that screen large volumes of potential tenants.
Technology plays a critical role
So what types of challenges will companies likely face as they attempt to comply with the new requirement?
Notwithstanding the inherent challenges associated with managing large volumes of tenant applications, determining an applicant’s immigration status presents numerous challenges.
Typically, companies solve compliance-related problems using a combination of people, processes, and technology. Assigning more people to the tenant application process doesn’t make much sense. Vacancies and tenant applications rarely, if ever, maintain a one-to-one relationship. Meaning, that for each vacancy, landlords or their agents normally review more than one application. Adding more people to the application process increases the cost to acquire a paying tenant and may, in turn encourage landlords to fire their agent, and assume control of the application process.
Alternatively, the landlord may take his business to an agent that maintains control of its costs having embraced the use of technology to conduct passport checks, for example.
Withstanding government scrutiny
There are additional roles for technology. Demonstrating compliance with right-to-rent legislation requires maintaining an electronic document trail. This includes archiving large volumes of document images and electronic data used to verify an individual identity and corresponding immigration status. It also requires that companies possess the ability to flag an individual for follow up after twelve months, or at the expiry of the document(s) that supports their right to reside within the UK.
Only time will tell if the right-to-rent requirements will curb illegal immigration. Similar to other nations that attract immigrants, under the right-to-rent requirements, the UK government intends to co-opt property owners in to preventing foreign citizens from settling in the country illegally.
Right-to-rent is coming. Is your company ready to comply?