Student landlords should brace for Renters' Rights Bill contract chaos
Student landlords in England should prepare for a sector shake-up as the Renters' Rights Bill transforms tenancy agreements - rendering many existing contracts obsolete.
Legal expert David Smith, a property solicitor at JMW, warns that assured shorthold tenancies (ASTs) signed before the change will automatically shift to periodic tenancies, disrupting business plans.
He told Accommodation for Students: "This will be problematic as lots of tenancies have already been signed as an AST so in a sense all these agreements are no good as parts of them will not reflect the reality - you need to think about how it will impact your business."
The looming legislation will leave landlords scrambling for solutions, though options are fraught with challenges.
One possibility suggested by Dr Smith is switching to room lets, but this could affect council tax obligations.
Alternatively, leasing directly to parents, with students as permitted occupiers, might sidestep the issue.
The commercial litigation lawyer also floats the idea of a premium lease, that is charging an upfront fee for a year-long tenancy, followed by a nominal £1 monthly rent.
Or, he says that student landlords could offer a seven-year term with a break clause after 12 months.
However, he also warns that 'these options are high risk', since housing authorities will scrutinise these arrangements closely.
Dr Smith said: "It might be just better to cope with the reality of the situation."
Beyond contract structures, communication with tenants adds another layer of complexity, he warns.
The Bill allows students to issue notice to quit from day one via casual platforms like WhatsApp, raising concerns about clarity and record-keeping.
Dr Smith highlights a further snag in joint tenancies: "If the group falls out or one person wants to leave, traditionally you would be approached by a parent, and you might get them to pay the rent anyway or just do a tenancy alteration - now that can't happen.
"A single person will give you two months' notice and if you choose to let the others stay, you're forming a new agreement, or you might tell them all to leave and then you've got a vacant property."
Previously, landlords could negotiate with parents to cover rent or amend terms, but that flexibility vanishes under the new rules, leaving properties at risk of sudden vacancies.
And with the Renters' Rights Bill possibly set to become law this autumn, Dr Smith warns that all student landlords will need to be proactive.
He explains: "It's better to get ahead of this now rather than face last-minute issues."
Essentially, with ASTs becoming unenforceable in their current form, those in the student rental market must rethink strategies to avoid financial pitfalls.
Along with authorities challenging creative and unconventional leases, the administrative burden of managing periodic tenancies could strain smaller landlords.
A single student's decision to exit could unravel an entire group let, forcing landlords to either renegotiate with remaining tenants or restart the tenancy process.
Both of which are costly undertakings in a competitive market.
Dr Smith says that preparation is key, and student landlords should consult legal advisors to navigate the transition and safeguard their investments.
He warned: "This is going to be a big shift — landlords need to start planning for it now."
Student landlords must act
Simon Thompson, the managing director of Accommodation for Students, said: "As the Renters' Rights Bill looms on the horizon, student landlords find themselves at a critical juncture.
"The shift from assured shorthold tenancies to periodic arrangements, coupled with informal notice methods and the unpredictability of student group dynamics, demands they prepare effectively."
He added: "This isn't just a tweak to the rulebook - this is something that will affect every student landlord in England.
"For student landlords, as David Smith makes clear, the need to consult experts and rethinking strategies is crucial - everyone will need to act now."
