The Renters Rights Bill, currently progressing through Parliament, is set to bring significant changes to the private rental sector. While it primarily targets the residential letting market, it has implications for care providers, especially those offering staff accommodation. Here’s an overview of the key elements of the Renters Rights Bill and what it means for care sector providers.
Abolition of Section 21 “No Fault” Evictions
One of the most significant changes is the abolition of Section 21 “no-fault” evictions. Under the current system, landlords have been able to end a tenancy without giving a specific reason, provided they followed the correct legal process. This system has been widely criticised for providing tenants with little security, while landlords have often found it difficult to regain possession of their properties when necessary.
Employers who house care staff under ASTs will lose the ability to regain possession without providing a reason with the abolition of section 21 notices.
If your care staff are on ASTs, regaining possession could become slower and more bureaucratic. This is particularly relevant if housing is tied to employment.
Single System of Periodic Tenancies
The Renters Rights Bill is designed to improve security of tenure for tenants by providing longer tenancies. All ASTs will be replaced with rolling periodic tenancies, with no fixed terms. Whilst this adds flexibility for staff, it also provides less certainty for employers who may need to plan accommodation use.
New Grounds for Possession
While Section 21 is being abolished, many of the grounds of possession are being expanded. Employers should review how their tenancy agreements are structured and whether their arrangements qualify for the new possession grounds.
Regulation of Landlord Practices and Property Standards
A Private Rented Sector Ombudsman and Decent Homes Standard will be introduced. Providers must ensure that any staff accommodation meets minimum standards—even if it’s employer-provided.
Assured Shorthold Tenancy (AST) vs Service Occupancy Agreements (SOA): What’s the Difference?
In the care sector, it’s common for employers to house staff (e.g., live-in carers, on-call nurses). It is important to note the difference between an AST and a SOA because whether you use an AST or an SOA will affect your ability to reclaim the property quickly if the employment ends and whether the Renters Rights Bill changes will impact you.
| Assured Shorthold Tenancy (AST) | Service Occupancy Agreement (SOA) | |
| Legal Basis | Governed by the Housing Act 1988 (as amended) | Common law agreement, not governed by the Housing Act 1988 |
| Occupier Status | Tenant (has tenancy rights) | Licensee (no tenancy rights) |
| Main Purpose | Provides residential accommodation | Occupier lives there as part of their job |
| Rent | Paid directly for the accommodation | Often deducted from wages or included as a job benefit |
| Exclusive Possession | Yes – tenant has control over the property | No – the employer retains control |
| Right to Stay | Can stay until legal termination (e.g., notice, court order) | Ends automatically when employment ends |
| Eviction Process | Requires formal notice (e.g., Section 21 or 8) and court order | Can be removed without court process if employment ends |
| Use Case | General residential letting | Accommodation tied to job (e.g., caretaker, live-in staff) |
In a previous article, Ian Thomas, partner in the Property Litigation team advises on how to minimise the risks involved in creating a service occupancy agreement; Property disputes and the service occupancy trap – Stephens Scown
Practical Advice for Care Providers
Care providers should audit their staff housing arrangements and consider whether staff are accommodated under ASTs or SOAs. They should then consider whether the agreement reflects the true nature of the relationship, for example, is the housing essential for the role?
Care Providers should ensure that employment contracts and housing agreements are consistent and legally robust and should prepare for the Bill’s implementation.
If you require help or assistance in reviewing your documents, then please do not hesitate to contact a member of our Property Litigation team.