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Education e-briefing – Student Accommodation Contracts: What are they (and why does it matter)?

  • United Kingdom
  • Education - Briefings

08-02-2018

Welcome to the first in our series of Student Accommodation e-briefs for universities, colleges and private institutions. These e-briefs highlight aspects of the student accommodation contract which pose challenges for the education sector.

In this briefing we focus on the nature of the student accommodation contract and the implications of its classification as either a tenancy or a licence.

Institutions invest a lot of time in getting the detailed terms of their student accommodation contracts right, but it is important not to overlook the bigger picture and in particular whether, fundamentally they constitute a tenancy or a licence. This distinction can make a big difference to the institution’s rights under the contract, particularly when relocating a student, gaining access or terminating the contract early.

When it comes to student accommodation contracts, it is usually more favourable for an institution to put in place licences rather than a tenancies. There are various reasons for this, including the following:

• An institution may want to relocate a student in a number of circumstances , including management reasons (e.g. to carry out maintenance works or to repair damage) and reasons relating to the safeguarding, welfare or conduct of students. A well-drafted licence will enable the institution to relocate a student to alternative accommodation relatively easily. A tenancy, on the other hand, will give the student a proprietary right and exclusive possession of their room, which could enable them to successfully challenge any attempt to relocate them.

• A licence, by its nature, entitles the institution to gain access to the accommodation, which it may want to do for management reasons or if there is suspicion that the student is in breach of his/her terms of occupation; for instance prohibited items are being kept in accommodation. A tenancy, by its nature, will give the student a right of exclusive possession, which entitles them to exclude others, and this will limit the circumstances (and times) when the institution can lawfully gain access;

• The Protection from Eviction Act 1977 requires a minimum of 28 days’ notice to be given to terminate a tenancy or a periodic licence. The 1977 Act does not stipulate the same requirement for fixed term licences however. How much notice should be given in any particular circumstance will depend upon a variety of considerations and careful thought should be given before any notice is served. Where the need to terminate arises because of serious conduct-related breaches which put other students at risk however, an institution could have more flexibility when terminating contracts at short notice if the student accommodation contract can be properly interpreted as a fixed term licence.

So how can institutions ensure that they put in place licences, rather than tenancies and what other things should they consider? There are some key points for institutions to bear in mind:

• It is not enough to simply call the contract a licence. Equally, it is not sufficient to draft the contract in the style of a licence if the institution does not treat it as such (e.g. by never exercising its access or relocation rights). It is the nature of the contract and how it is performed, and not its name, which will determine whether it is a licence or a tenancy;

• Contracts should be carefully drafted to ensure that the terms are consistent with being licences rather than tenancies. Those who administer and manage the contracts within the institutions should be aware of how licences should be administered and managed. For example, the exact room number to be allocated to the student should not be included in the contract itself, but should be notified to the student after the contract has been entered into;

• Consumer law applies to all student accommodation contracts and when drafting student accommodation contracts, it is often a delicate balance to ensure that the institution has protected itself by granting the flexibility of a licence whilst providing a contract which is fair to the student. Contracts should be kept under review as the consumer law landscape develops.

In light of the above, institutions should consider reviewing their accommodation contracts and updating the knowledge of their staff who administer and manage such contracts, to ensure that the contracts they use are both genuine licences and remain compliant with consumer law.

Eversheds has a wealth of experience advising on student accommodation contract related issues in the HE and FE sectors. If you would like to discuss how Eversheds may assist you in managing any of the issues addressed above (or any other student contract/consumer related issues) please contact Elizabeth Fevyer or Alison Oldfield.