Will purpose-built student accommodation (PBSA) sector be exempt from the Renters’ Rights Bill?

The Explanatory Notes published alongside the Renters’ Rights Bill contain a comment about purpose-built student accommodation which is at once both unsurprising, and rather puzzling.

The Renters Rights Bill will abolish section 21 notices, and scrap the entire concept of the ‘assured shorthold tenancy’ (“AST”). It will not be possible for landlords to grant an assured tenancy with a fixed term, and student accommodation providers have been anxious to preserve the ability to grant tenancies which begin and end in sync with the academic year.

The Bill’s Explanatory Notes contain this paragraph:

12. Purpose-Built Student Accommodation (PBSA) will be exempt from these changes as long as the provider is registered for government-approved codes, since these tenancies are not assured. Lettings by PBSA landlords will be governed by the Protection from Eviction Act 1977.

This paragraph is not a surprise – identical text appeared in the Explanatory Notes to the Renters (Reform) Bill (the previous government’s proposals). But it has left lawyers scratching their heads because tenancies granted by PBSA providers who subscribe to government-approved codes can currently grant assured tenancies and ASTs.

Some tenancies granted to students are excluded from assured tenancy or AST status already; tenancies granted by a “specified educational institution” to students cannot have this status . For those tenancies, excluded from assured or AST status by paragraph 8 of Schedule 1 to the Housing Act 1988, section 21 notices never applied, and their abolition makes no difference.

But being a PBSA provider and complying with a government-approved code is not enough to be excluded from granting ASTs  – to be a “specified educational institution” private student accommodation providers currently would need to be included on a list in Schedule 2 to the Assured and Protected Tenancies (Lettings to Students) Regulations 1998. Most private PBSA providers are not.

Contrary to what the Explanatory Notes seems to suggest, nothing in the Bill creates an exemption for PBSA tenancies. There is some special treatment for the student accommodation in the amendments to the ‘grounds for possession’, but nothing which would bring PBSA tenancies outside the scope of the Bill’s reforms generally.

A mistake?

It is puzzling to see comments in the Explanatory Notes which do not accurately reflect the existing law or the proposed changes to the law. It might simply be a mistake – it is  possible that someone has got a bit confused and mixed up regulations relating to exemptions from HMO licensing with exemptions from assured tenancy status.

A change to the ‘Lettings to Students’ Regulations

If the Government really does want to exempt some PBSA providers from granting assured tenancies (and since the Explanatory Notes state this very clearly, I think it is much more likely that this is the plan), this exemption can be done without including it within the Renters’ Rights Bill.

Amendments to the ‘Lettings to Students’ regulations would achieve this outcome – the Government could either identify certain providers within the existing list, or create a new category of landlords who can qualify for the exemption. If this is the plan, if would be helpful for the sector to have confirmation of this from government.

Watch this space

The Bill is likely to be subject to at least minor amendments during its passage through Parliament, and this apparent anomaly might be addressed later. All landlords should be thinking about how to prepare for these long-awaited changes, and the purpose-built student accommodation sector in particular should be looking to the government for clarification of what their position will be when these changes are in force.

We provide legal services to landlords in the student accommodation sector and can advice on the upcoming changes in the law.