How will the Renters Reform Bill affect school accommodation?

We know that schools are keeping a close watch on these legislative changes and we have provided advice to a number of clients over the summer. The good news is that the Renters Reform Bill does not affect arrangements with employees occupying under the following:

• Accommodation provided by schools which the employee must occupy to carry out their duties (Service Occupancy Agreements).
• Short term arrangements documented under a Licence to Occupy.
• Those tenancies with very low or very high rent (Common Law Tenancies).

Now that the UK Government are back from summer recess, we expect that they will move towards Royal Assent of the bill ahead of the Labour Party Conference later in September. 
 
From the current reading of the bill (which may still be subject to change), the key changes are likely to be:

1- End of section 21 ‘no-fault’ evictions

• Landlords will no longer be able to evict tenants without a valid reason.
• Possession will only be possible under specific grounds but there is an amended ground for employers who grant tenancies to employees which will permit employers to serve notice if employment has come to end; or if property was granted for the 'early period of employment' if the property is needed for a new employee. Please note 'early period' has not yet been defined. 

2- All tenancies will automatically become periodic

• Fixed-term ASTs will be replaced by open-ended periodic tenancies.
• This applies to new and existing tenancies, which will automatically convert once the law is in force. There is therefore no legal requirement to issue a new suite of documents now. 

3- Landlord redress scheme

• All landlords must pay the membership fee and register with the new Private Rented Sector Ombudsman (Ombudsman). This includes all Landlords whose properties are rented out by letting agents.

Given the above, we believe housing policies will become more important to enable schools to manage their housing stock. 
 
For those schools which are charities, on the grant of new ASTs, the governors (as charity trustees) will need to comply with the Charities Act 2011 (the Charities Act). Under the Charities Act, if a charity grants a lease or tenancy to a 'connected person' they are legally required to obtain consent from the Charity Commission before doing so. The Government introduced changes to the Charities Act, which came into force in April 2024. These changes allowed schools to grant tenancies to employees (who are technically connected persons) for periods of less than 12 months, or as periodic tenancies of one year or less, without needing to obtain consent. We understand that the new periodic tenancies will be open-ended with a fixed period of one month. It is not yet clear, following implementation, whether the grant of ASTs to employees will continue to be exempt from the requirements under the Charities Act, but we will provide updates once further guidance has been published. 
 
The implementation date has not been published but may be phased starting in 2026. The Government guidance says "We will provide the sector with sufficient notice of the system taking effect, and work closely with all parties to ensure a smooth transition." We anticipate that in the period before the Renters Reform Bill is implemented, all Landlords will be required to write to their tenants explaining the basis of their occupation.

We are keeping the Bill under review and will provide further advice once Royal Assent has been granted and the implementation plan has been published, however if you would like to discuss your school's current or future arrangements; are considering implementing a housing policy; or would like assistance with an audit of staff accommodation, please contact Sarah Outram in our Independent Schools team.