knowledge 5 July 2024 |

Government proposes urgent changes to the law affecting leases and licences granted to students

The draft legislation makes the following three headline proposals:

(a) to prohibit the duration of leases and licences granted to students in student accommodation to not more than 41 weeks except where the student themselves requests an arrangement of a longer duration;

(b) to entitle students in student accommodation, irrespective of the agreed fixed duration of their lease / licence, to terminate the arrangement at their discretion during the period 1 May to 1 October in any year by service of 28 days advance written notice; and

(c) to (i) prohibit (in addition to requiring which is already prohibited), the seeking by a landlord of advance rental payments from a tenant generally (and not just students) of more than one month and (ii) limit the entitlement of a student in student accommodation to opt to make payments in excess of this so that this will only be possible where the student is also liable to pay tuition fees to the accommodation provider (eg in  the case of a university also providing accommodation to the student).

Except for the proposal to prohibit the seeking by a landlord of advance rental payments from a tenant generally, which has general application,  these proposals apply to both leases and licences of student accommodation granted to students, which come under the ambit of residential tenancies legislation.

In terms of the new student entitlement to terminate, that right is entirely at their discretion and is irrespective of:

(a) the duration of the arrangement being 41 weeks or more or less;

(b) whether the student requested an arrangement that extended into the period May to October; )  and/or

(c) whether (or not) the landlord/licensor is in breach of any obligation to the student or under residential tenancies legislation.

Both of the following will be improper conduct (which the RTB may investigate and sanction) and also an offence:

(a) requesting or requiring a student to enter into a lease/licence of student accommodation of longer than the permitted 41 week duration; and

(b) seeking or requiring advance payments from a tenant.

Where an advance payment option is preferred by a student, universities and other education providers may take advance accommodation payments, but the implication is that private student accommodation providers may not, even though the consequence for the private provider in taking the payment, if offered, is not clear.

If enacted as initiated the proposals are expressly stated to only apply to a tenancy created after the date of commencement of the relevant section but how this will translate practically is an important question for clarification.  

The complex nature of the application of residential tenancies legislation and the potential impact of these proposals means that it is really important for anyone with arrangements in place with students to take action now to consider if and how these proposals may affect them.