Focus on student lets
Students and student lets are a big part of the lettings market. Previous governments have increased the numbers getting a degree, and they all have to live somewhere. Many landlords let exclusively to students.
Although many colleges and Universities are building more of their own student accommodation, as are specialist companies providing blocks of student accommodation, still many students look for rented accommodation in the private sector.
Contrary to what some people think, a letting to students will be a normal assured shorthold tenancy and will operate in the same way as any other AST.
Although ‘student lets’ are one of the exceptions to creating an AST in Schedule 1 of the Housing Act 1988, this is only if they are renting from the educational body with whom they are studying. In which case the tenancy will be a ‘common law’ unregulated tenancy. In most other cases it will be an AST.
Guarantees
As most students do not have any money apart from grants (if they are lucky) and student loand, it is generally accepted that their parents or some other responsible person will act as guarantor. As discussed on Day 9, you can either include guarantee clauses in the tenancy agreement and have the guarantor sign this, or have a separate guarantee deed.
If you just have one or two sharing, a tenancy agreement with a guarantee clauses may be fine. However many student houses have four or more tenants. Here it can be a nightmare getting everyone to sign the same agreement, and it is generally more convenient to have the guarantor sign a separate agreement which is sent out to them.
Two problems with student lets
There are however two problems with student lets which do not normally occur with other tenants:
- How to deal with the summer vacation and
- The fact that they are normally signed up while the previous tenants are still in occupation.
1. The Long Vac
There are a number of ways that this can be dealt with.
- Many landlords refuse to do anything other than rent the property out for a whole year, and the students have to pay full rent whether they are living there or not. This is the simplest solution but understandably not popular with students
- In some holiday areas, the property is let to holiday makers over the summer and to students for the rent of the year
- Finally, some landlords will allow the students to rent the property at a reduced ‘holding’ rent over the summer on the basis that they will not be living there. Some landlords use this time to do repair and any other necessary work to the property. The problem with this solution though is if the tenants decide to move in early, while still paying the reduced rent.
For Landlord Law members, I have created special tenancy agreements which provide for a reduced rent over the two summer months provided the tenant is not in occupation. The student tenants have the right to move in early, but then they have to pay the full rent. I also have a special out of season holiday let agreement which provides for the rent to go up to the more expensive holiday rates if they stay on.
2. Signing student tenants before the previous tenants have moved out
In most cases, indeed almost invariably, this is not a problem, as students will want to move out at the end of the academic year. However were they to stay on (as is their legal right) then the landlord would be in severe problems. He would be in breach of contract with the incoming tenants who would have no-where else to live.
If he decided to evict the remaining tenants, this would take at least two/three months, by which time the incoming tenants would have found somewhere else to live. All student landlords know that you cannot let a student property easily out of season.
In order to at least provide some resolution to this problem, my student tenancy agreements set a limit to the compensation to be paid to the incoming tenants and also provide for this compensation (or an equivalent amount) to be payable by the tenants staying on.
There are two views about these tenancy agreements from my landlords:
- Some don’t use them as they don’t want to put the idea of staying into the students’ heads and also think that it will put them off renting their property.
- Others use them, on the basis that it does provide a means of dealing with the problem if it ever arises, plus the prospect of being responsible for compensation is likely to deter people from staying on.
NB Find out more about my Tenancy Agreement Service on Landlord Law
After you have joined, you will find my student let agreements on a separate page in the tenancy agreement section.
There has to be serious doubts about the fairness and lawfulness of preventing the tenant from occupying the property.
In addition, if the tenant does not occupy the property then the tenancy isn’t an AST until (s)he does.
If you are talking about the ‘initial period’ tenancy agreements – the way these are set up are so the summer months are not actually part of the tenancy but the property is reserved for the tenants – I think in the agreement I call it something like a reservation fee. The tenant can always apply to move in early but if so they have to start paying the full rent.
It’s really so tenants do not unfairly take advantage of a reduced rent for an initial period by moving in early but without paying the full rent.
Either it is a ‘reservation fee’ and there is no tenant, no rent, and no-one can move in early at all.
Or it is rent, there is a tenancy, and I think that it is unclear (to me at least) whether preventing occupation is fair and lawful. Certainly it isn’t possible to prevent the tenant from accessing the property whenever they please.
You wrote about “reduced rent over the two summer months provided the tenant is not in occupation”, which suggest that there is a tenancy.
I have to say that the ‘initial period’ student tenancy agreement has been the most problematic of all my tenancies. I did a re-draft a few years ago and have not had any feedback since then so I assume it is working for users.
I developed it after hearing from landlords how annoyed they were when – after agreeing to allow tenants to reserve a property at a greatly reduced rent over the summer – the tenants then elected to move in, still at the reduced rate, which was unfair on the landlord. Who would, had they known that the tenants were going to live there over the summer, have charged the full rent.
Maybe the proper answer is just to charge the full rent for the whole year for everyone regardless, but many landlords want to help tenants by allowing them this initial period at a lower rent. My agreement gives the best protection I can devise.
You are certainly correct that there is severe trouble potential in signing up new tenants with others still in occupation. I’ve dealt with many an issue here as an adviser from the perspective of both incoming and outgoing tenants. Compensation to the incoming tenants would seem to be a good option but I find many landlords operating mostly in the student sector really do not understand the law in relation to SPT arising by virtue of s5 of HA1988, and they think it acceptable to effectively harass the tenant into leaving.