Renters’ Rights Bill 6: Employee Accommodation

As the Renters’ Rights Bill proceeds through Parliament, this is one of a number of articles we are publishing looking at the proposed changes. The article addresses reform of the English private rented sector only.  

The Bill retains – and in some ways enhances – landlord employers’ ability to provide employee accommodation that can be terminated when the tenant’s employment ceases. 

What's staying the same? 

• Employee accommodation provided as a necessary part of the job, such as housing for a live-in nanny or security guards, typically has few protections, taking effect as a service occupation agreement which ends when the employment ends. That remains the same under the Bill.  
• Shared accommodation arrangements that don’t give the employee exclusive possession of their home will remain licences, without long-term security. 
• Agricultural workers continue to enjoy increased protection, unless landlords opt out in advance.  However, the opt-out provisions and the type of tenancy opted-out workers receive are both changing.  Next week's article will focus on the specific rules relating to Agricultural Workers and Agricultural Holdings.

What’s changing? 

• Employees who have exclusive possession of their home and pay some rent (whether directly or by way of a salary deduction) will have Assured Tenancies, so any termination notice will need to cite specific grounds for termination. 
• Helpfully for employers, there are new grounds in the Bill that will mean that they will still be able to end tenancies when employment ends or, if the accommodation was only ever meant to be short term, when they need it for a new employee. 
• The new grounds will both require 2 months’ notice and are mandatory grounds, so if the conditions are satisfied possession will be ordered by the court.  

What practical difference does the Bill make?

In the context of well-managed employee accommodation, the practical difference between the current position and that if/when the Bill becomes law should be relatively limited. 

Residential tenants can’t be evicted without following the correct legal process, meaning seeking a possession order if a tenant fails to leave on expiry of notice.  The Bill doesn’t change that. 

The new grounds give landlord employers an evidentially straightforward ground on which to rely.  Provided a landlord can show the property was let to the tenant because of the tenant’s employment (an employment contract or offer letter should evidence that) and the employment has now terminated, or the intended occupancy period expired if the tenancy wasn’t intended to last the entirety of the tenant’s employment, a mandatory ground will be made out.  As ever, written records will be important.  

Items in this series:

Renters' Rights Bill 1: Residential tenancy changes proposed by the Bill, Maddie Dunn

Renters' Rights Bill 2: How to obtain possession if section 21 notices are abolished? Maddie Dunn

Renters’ Rights Bill 3: Children, Benefits and Pets, Maddie Dunn

Renters’ Rights Bill 4: Enforcement, Maddie Dunn

Renters' Rights Bill 5: Succession, Maddie Dunn