The Renters’ Rights Act 2025 represents the most significant reform to the private rented sector in a generation. While much of the commentary has focused on the abolition of assured shorthold tenancies and “no fault” evictions, the Act raises important (and often misunderstood) questions for employers who provide accommodation to staff under service occupancy arrangements.
This is particularly relevant in the equine sector, for racehorse trainers, stud farms, and other rural employers where on-site accommodation is not simply a benefit, but a functional requirement of the role.
A genuine service occupancy contract should fall outside the new Renters’ Rights Act 2025 regime, however it is critical that they are tightly drafted and are:
- required for the better performance of the employee’s duties; and
- truly incidental to the employment relationship
It is not possible to exclude the Act, therefore it is crucial the arrangement is genuinely outside the scope of the Act.
A service occupancy may inadvertently become a tenancy where:
- the employee is given exclusive possession of a self-contained dwelling;
- the accommodation is not genuinely required for the role;
- rent is charged at a market or near-market level; or
- the documentation and practical reality diverge.
Under the new regime, the consequences of getting this wrong are more significant:
- the arrangement could convert into a periodic assured tenancy automatically;
- possession would require reliance on statutory grounds; and
- flexibility on termination would be substantially reduced.
