The Renters Reform Bill has now been published. As promised, it will remove the ‘no fault’ ground for possession by removing the clauses providing for assured shorthold tenancies.
The other significant change is that all tenancies will be periodic and that fixed-term tenancies will be abolished.
This has caused enormous concern among student landlords. Student tenancies all run during the student year, and this change to periodic tenancies brings up two main problems for student landlords:
1 The need for vacant possession at the end of the academic year
Most landlords will sign up their new tenants before the existing student tenants have vacated. They need to be sure, therefore, that the existing tenants will vacate.
Otherwise, they will be in breach of contract with the incoming tenants.
2 The problem if tenants decide to leave early
The proposed bill provides that tenants can end their tenancy by giving a tenant’s notice to quit of not less than two months notice.
However, as there is no protected initial period during which tenants cannot serve a notice to quit, they could serve the notice immediately, meaning that after just two months, the landlord could be left without tenants.
As students all tend to sign up for tenancies at specified times, this could mean that the landlord has ‘missed the boat’ and will have no tenants until the time comes around again for students to seek the next year’s accommodation.
Which could cause them serious financial loss.
So what can be done about these problems?
The first problem
This, I see as less of an issue. Although, at present, students sign up for a fixed term, the landlord is powerless to prevent them from staying on as all tenants are legally entitled to remain in their property until evicted by bailiffs under a court order for possession.
So landlords are currently dependent on the students moving out voluntarily.
This is very rarely a problem though as most students are only too happy to move out and do whatever they have planned for the summer vacation.
Landlords can guard against the problem of incoming students being blocked by students refusing to move out by stating on the incoming tenant’s tenancy agreement that their tenancy is conditional upon the existing tenants vacating.
The second problem
This is more serious. One way to avoid it happening is to avoid renting to single students. If one student in a shared house decides to leave, then presumably, the others will want to remain.
As the law currently stands, the outgoing tenant can end the tenancy for all tenants by serving a tenant’s notice to quit – unless the bill is amended to change the law here, as has been done in Wales. But in either case, the outgoing tenant will have no further liability for rent after the notice to quit period has ended.
However, if the other tenants decide to remain, then they will all be liable for the rent under the ‘joint and several’ liability of joint tenants and so will be incentivized to find a replacement tenant to cover the rent.
This will be less satisfactory, however, than the current law where tenants cannot serve a ‘tenants notice to quit’ until the fixed term has ended, meaning that landlords can hold all tenants liable for rent for the whole of the fixed term. So if students decide to give up their course after a short period of time, this will not entitle them to end their tenancy early. Unless the landlord agrees.
Although there are ‘solutions’ for this situation, generally I can see that the prospect of this happening will be a disincentive for landlords to continue renting to students. Which, considering the current shortage of accommodation for students, is worrying.
Further comments on the second problem
I understood that the rule would not apply to purpose-built student accommodation – although I have been unable to find any reference to this in the Bill (if anyone can help with this, please let me know via the comments section below).
In which case, maybe student landlords who
- are registered with student accommodation offices, or
- who are signed up to accreditation schemes linked to student organisations, or
- Who can be identified in some other way
Could be exempt in the same way as landlords of purpose-built student accommodation?
And finally
I know that the NRLA is doing a lot of lobbying on this issue, so hopefully, some acceptable solution can be reached.
There is a real problem at the moment with student accommodation with some students being forced to live miles from their college or university.
So the government should seriously consider making separate rules for student landlords.