Schools in England occasionally allow staff to inhabit school-owned accommodation, however what status they have as tenants can vary. Most will classify as either a service occupancy or a service tenancy but what are the differences between them?
A service occupancy arises where either:
- Occupation by an employee is essential for the performance of their duties
- An employee’s employment contract expressly requires the employee to reside at the property for the better performance of their duties.
A school caretaker is perhaps the most common example of a service occupant. The out-of-hours support that they provide means that residing on site is clearly advantageous in the delivery of their duties. However, what if a school permits an employee to live on a property that is off-site, or whose job does not require accommodation to successfully deliver their duties? In this situation a service tenancy will be required.
Where there is no link between an employee’s occupation of a property and them consequently being able to better perform their duties, a service tenancy may arise. This can occur where an employee’s role changes so that what was once a service occupancy evolves into a service tenancy. Why is this significant?
Service occupancies provide a licence for an employee to occupy a property for the duration of their employment contract, and when that contract ends the right to reside in that property also ends. It’s therefore much easier for schools to take back accommodation from the employee under a service occupancy.
By comparison service tenancies are, for the most part, assured shorthold tenancies between an employer and employee and have significant statutory protections which are not extended to service occupancies. It’s therefore much more difficult to regain possession. A prescribed form of notice must be given, with a minimum period of notice. There are also significant statutory obligations for employers to comply with.
Is there an alternative?
Rather than assured shorthold tenancies, common law tenancies can be granted where no rent or an annual rent of no more than £250 (or £1,000 within Greater London) is reserved. This has the benefit of taking the tenancy outside of the assured shorthold tenancy regime and provides an employer with greater freedom around termination and less obligations to comply with. Four weeks’ notice is generally required to terminate and where an employee refuses to vacate, a court order may still be required.
It‘s important to review any staff occupational arrangements, what their employment duties are and whether a degree of proximity still remains and identify whether the agreement in place is a service occupancy or a service tenancy.
If it falls into the latter category then give some thought as to whether you have an assured shorthold tenancy or a common law tenancy. Once you can make this distinction, you can determine what statutory obligations you need to comply with and how easy it is to determine the agreement.
For further information and advice, please contact Morgan West.