Questions & Answers

Q: In light of recent headlines on the employment of an illegal worker by Baroness Scotland, what steps should I take to ensure that I comply with relevant legislation when taking on new employees?

A: It is unlawful to employ people who are not entitled to work in the UK or who are in breach of their conditions of stay. Employers must carry out certain checks before an individual commences employment. Prior to employment, the applicant must provide you with certain original documents to establish that they have the right to work in the UK and are not in breach of their conditions of stay in the UK. The documents needed will vary, depending on whether the individual is subject to immigration control. The most common document is a ‘secure’ document such as a UK passport or a national ID card. If the applicant does not have such a document, he or she must produce two verifying documents. Full details of document checks are available from the UK Border Agency’s website. All copies of documents used to verify an employee’s status must be retained for the duration of an individual’s employment and for a further two years after employment ends.
To avoid claims of race discrimination, employers must treat all job applications the same and not make assumptions based on name, race, appearance or nationality.
If you fall foul of the rules you could potentially be liable for
a civil penalty of up to £10,000 per individual if you negligently employ someone over the age of 16 who is subject to immigration control and does not have the right to undertake the work for which they were employed. Also criminal sanctions (a fine not exceeding £5,000 and/or up to 6 months’ imprisonment) if you knowingly employ an individual who does not have the right to undertake the work for which they were employed.
If you are unsure as to your obligations as an employer, you may wish to read government guidance available at: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/employersandsponsors/preventingillegalworking.

Q: I am worried in the current climate that my commercial tenants will not be able to pay their rent.  What can I do to protect my investment?

A: Whilst landlords do have on paper some draconian remedies against tenants who fail to pay their rent, it is a brave landlord who will forfeit a lease in the current market. As well as a loss of income an empty property means you as landlord will have to bear ratings liability in addition to the costs involved in finding a new tenant in a difficult market.
There are a number of practical solutions that should be considered by landlords if faced with a tenant in difficulty. The first thing to remember is that you need to be open for communication and negotiation.  Increasingly tenants are approaching landlords with requests for rent to be paid monthly or weekly rather than quarterly to assist with their cash flow. If this means that your tenant has a better chance of making it through the economic storm then consider being flexible.
To help your tenant stay afloat you may need to be prepared to accept a reduced rent for a period. A reduced rent is better than no rent at all, especially if it means your tenant stays in business. Where there are previous tenants or guarantors who retain a liability to your tenant’s obligations, then you need to take care to preserve your rights against these parties. You must notify such parties of any arrears in a prescribed manner, and if any rental concessions are made, then you would be well advised to ensure that the previous tenants and any guarantors are made parties to those concessions.
It is clear that the inability of a tenant to pay their rent is a problem for both the tenant and the landlord, and whilst landlords will generally expect tenants to provide evidence of their financial difficulties, there are mutual benefits to be gained from them working together.