New liability risks for agents using contractors on property checks

New liability risks for agents using contractors on property checks

Recent changes to UK immigration law extend civil penalties for illegal working to agents subcontracting contractors for property inspections. This raises concerns about informal arrangements and compliance risks in property management.

From October 2026, the Border Security, Asylum and Immigration Act 2025 has introduced wider civil penalty liabilities for illegal working. Agents who engage contractors for property checks, maintenance, or inventories without formal contracts or thorough right to work checks may face significant fines. The law now covers businesses that subcontract work or operate platforms matching service providers with clients, even if no direct employment relationship exists.

Property management professionals must urgently review their contractor arrangements to avoid penalties that can reach £45,000 for a first breach and £60,000 for subsequent breaches per illegal worker. The Home Office’s enforcement actions in 2025 resulted in 2,438 civil penalties totalling over £130 million, with average fines exceeding £50,000.

Legal changes expand liability beyond direct employment

The Border Security, Asylum and Immigration Act 2025 marks a significant shift in the enforcement of right to work checks. Previously, liability for illegal working primarily fell on employers with direct contracts. Now, liability extends along chains of contracts, including subcontractors and online platforms facilitating work arrangements.

This means letting agents who book contractors informally—via email, phone, or messaging apps—without written contracts, verified insurance, or documented identity and right to work checks, could be held liable. The law targets informal and undocumented arrangements common in property inspections and maintenance.

Klerky, a property booking platform, highlights that this strict application may catch many agents unaware. Katie Good, a senior associate at Travers Smith LLP, observes that the property sector is particularly exposed because many inspection and maintenance bookings lack formal documentation. She warns that assumptions about contractors being straightforwardly self-employed and outside regulation may no longer hold under practical scrutiny.

Implications for property management practices

For agents and landlords, the new rules mean that informal contractor arrangements carry heightened risks. Without proper contracts and documented right to work checks, agents could face costly penalties and reputational damage. This legal change adds to the growing compliance burden in the private rented sector, where safety, licensing, and tenancy regulations are already complex.

Agents must now ensure that every contractor or service provider attending a property has a verified right to work and that this verification is recorded and retained. Written contracts or formal agreements should replace informal booking methods. Insurance and identity verification should also be standard practice to demonstrate due diligence.

Letting agents who use platforms or subcontractors should review those arrangements carefully. The legislation’s reach includes online platforms that facilitate contractor bookings, so even indirect involvement can trigger liability. This may prompt a shift towards more formalised and transparent contractor management processes.

Challenges and uncertainties remain

The practical application of the new liability rules may raise questions. For example, how enforcement agencies will assess the extent of an agent’s responsibility in complex subcontracting chains is not fully clear. The law’s broad scope could lead to disputes over who is liable in multi-layered arrangements.

Additionally, smaller agents and landlords who rely on informal local contractors may find compliance costly or administratively burdensome. The requirement for documented right to work checks and formal contracts may increase operational overheads and reduce flexibility.

Guidance from the Home Office and legal advisers will be crucial to clarify compliance expectations. Agents should monitor updates and seek professional advice to adapt their practices accordingly. The risk of penalties underscores the importance of maintaining thorough records and formalising contractor relationships.

Steps landlords and agents should take now

• Review all contractor and subcontractor arrangements for property inspections, inventories, and maintenance.
• Implement formal contracts or written agreements with all contractors to document the relationship clearly.
• Verify and record the right to work status of every contractor before they attend any property.
• Ensure contractors hold appropriate insurance and qualifications, and retain evidence of these checks.
• Use reputable platforms or agencies that comply with the new legal requirements when booking contractors.
• Keep detailed records of communications, bookings, and checks to demonstrate compliance if challenged.
• Stay informed of official guidance from the Home Office and legal updates affecting contractor management.

Keeping contractor compliance under control with TLA

Membership of The Landlord Association (TLA) offers landlords and letting agents access to compliance resources and practical information to manage contractor relationships effectively. TLA’s developing property management platform, ORBIT, currently in BETA testing, aims to help members organise property records, track contractor documentation, and record key compliance actions such as right to work checks.

ORBIT’s features under development include storing contractor agreements and insurance details, as well as logging visits and inspections. This can assist members in maintaining evidence of due diligence required under the new Border Security, Asylum and Immigration Act 2025 provisions.

Exploring TLA membership and ORBIT BETA access can support landlords and agents in adapting to these regulatory changes, helping to reduce the risk of civil penalties and streamline compliance management.

Landlords and agents should prioritise reviewing their contractor arrangements immediately to ensure they meet the new legal standards and avoid exposure to penalties under this extended liability framework.

Sources: Letting Agent Today