Understanding Where the Renters Rights Bill Falls Short
The Renters’ Rights Bill is widely regarded as one of the most transformative pieces of rental legislation in England and Wales in recent years.
It has significantly overhauled the balance of power between tenants and landlords, abolishing no-fault evictions (Section 21), introducing stricter rules on rent increases, and expanding council enforcement powers.
However, like all legislation, it has limits. Not every tenancy arrangement falls within its scope.
In this article, we examine the specific types of tenancy contracts where the Renters’ Rights Bill does not apply.
We explore the categories exempted from the Bill, the reasoning behind these exemptions, and what landlords, agents, and tenants must understand to stay compliant—or deliberately structure tenancies outside the Act’s remit.
The Legislative Framework: What the Renters’ Rights Bill Covers
The Renters’ Rights Bill primarily reforms the Assured Shorthold Tenancy (AST) system in England and Wales. These are the most common form of tenancy agreements for private renters.
Under the Bill, key reforms include:
- Abolition of Section 21 ‘no-fault’ evictions
- Changes to rules governing rent increases
- Expansion of grounds under Section 8
- Standardisation of notice periods
- Greater powers for local authorities to prosecute bad landlords
But the Bill only applies to tenancies that fall within the statutory definition of an AST under the Housing Act 1988 (as amended).
Types of Contracts Where the Renters’ Rights Bill Does Not Apply
Here’s a detailed breakdown of tenancy types and rental contracts that do not fall under the Renters’ Rights Bill:
Licences to Occupy
A licence to occupy is not the same as a tenancy. These are used in arrangements where the occupier does not have exclusive possession of the premises. Common examples include:
- Lodgers living in the landlord’s home
- Hostels or student halls
- Accommodation provided with employment (service occupancies)
Because these are not tenancies in law, they are not governed by the Renters’ Rights Bill.
Tenancies Not at Market Rent (e.g. ‘Rent-Free’ Agreements)
If a landlord does not charge rent, or the arrangement is not made at a commercial rent, the agreement may fall outside AST rules. In these cases, the Bill would not apply. This might happen where:
- A friend or family member is allowed to live in a property rent-free
- A caretaker is offered accommodation in exchange for basic duties
These are considered gratuitous tenancies or informal arrangements, and the Bill does not extend protections to such occupants.
Tenancies of High Value
Tenancies with an annual rent exceeding £100,000 are not ASTs and therefore do not fall under the Renters’ Rights Bill.
This is particularly relevant in cities like London, where high-value luxury lets exist. These tenancies are governed by general contractual law rather than AST rules.
Low Value and Social Rent Agreements
Agreements with extremely low rents (under £250 per year outside London or £1,000 inside London) are also excluded from AST rules, and by extension, the Bill. These are often agricultural, historical or legacy tenancies.
Also, council and housing association tenants usually hold secure or assured tenancies, which are governed by different statutes such as the Housing Act 1985. The Renters’ Rights Bill does not amend these tenures.
Resident Landlord Arrangements
Where a landlord shares living accommodation with the tenant—typically in their own home—the agreement is not an AST. This includes:
- Letting out a room in a shared house while the landlord lives there
- Short-term live-in arrangements
These residents are typically lodgers, and their occupancy is by licence. Therefore, the protections under the Renters’ Rights Bill do not apply.
Holiday Lets and Short-Term Rentals
Short-term or holiday lets arranged under the terms of the Rent Act 1977 or other non-Housing Act frameworks are excluded. These include:
- Airbnb-style short-term stays
- Corporate lets under six months
- Seasonal accommodation provided to workers or tourists
As long as the arrangement is structured correctly and marketed as a short-term stay (without granting exclusive possession), the Renters’ Rights Bill will not apply.
Tied Accommodation / Service Tenancies
Some tenants live in accommodation provided as a condition of their employment. These service occupancies are generally not ASTs and not subject to the Bill. For example:
- Pub landlords
- School caretakers
- Farm workers
These are excluded because the tenancy is inherently tied to a job, and housing is considered a benefit of employment.
Company Lets
Tenancies granted to limited companies or organisations (rather than to individuals) are contractual tenancies and fall outside the AST regime. Common uses include:
- Company staff relocation
- Temporary housing for employees
As these are business-to-business arrangements, the Renters’ Rights Bill does not apply.
Temporary Homelessness Accommodation
Local authorities often place homeless individuals in temporary accommodation under statutory duties. These are licences or non-secure tenancies, and the Renters’ Rights Bill does not affect them.
Why Are These Tenancies Excluded from the Renters’ Rights Bill?
The exclusions are intentional and based on logic, not loopholes. Key reasons include:
- Policy goals: The Bill targets the mainstream private rental sector, not employment-based housing or short-term arrangements.
- Legal distinctions: Only tenancies under the Housing Act 1988 (as amended) are affected. Licences, service occupancies, and company lets fall under common law or contract law.
- Government oversight: Social tenancies already have extensive protections, which would clash with the Renters’ Rights Bill’s framework.
Implications for Landlords: Compliance vs. Flexibility
Understanding when the Renters’ Rights Bill doesn’t apply offers landlords both a risk and an opportunity. Here’s what it means in practice:
Legal Planning
Landlords may choose to structure contracts intentionally to remain outside the Act’s scope. For instance:
- Living with a lodger (using a licence)
- Using a company let arrangement
- Renting as a service occupancy
However, care must be taken to avoid sham arrangements. Courts will examine the substance over form. If a “licence” is in practice a tenancy (e.g., exclusive possession, fixed term), it may be reclassified, triggering full protections.
Risk of Misclassification
If a landlord wrongly assumes the tenancy is excluded when it is not, they could face:
- Fines from local authorities
- Invalid eviction notices
- Unlawful eviction claims
- Tenants claiming compensation
Commercial Letting Agents
Letting agents must ensure their tenancy agreements are correctly categorised, or they may expose their landlord clients to legal risk. They should:
- Avoid using AST templates for non-AST tenancies
- Provide compliance checklists
- Ensure rent levels and occupancy types match the contract format
Future Outlook: Will the Government Tighten the Exemptions?
There is political pressure from tenant rights groups to tighten or reduce exclusions, especially in the area of:
- Holiday lets (due to housing shortages in coastal towns)
- Live-in landlords (where lodgers are at greater risk)
- Company lets used to evade legislation
While changes are not yet confirmed, landlords should monitor updates, as future reforms may redefine tenancy status or extend protections.
FAQs: Contracts Exempt from the Renters’ Rights Bill
I rent a room to a lodger in my own home. Does the Renters’ Rights Bill apply?
No. If you share living accommodation with the lodger, the agreement is a licence to occupy, and the Bill does not apply.
Can I use a company let to avoid Renters’ Rights Bill obligations?
Yes, but only if the tenant is a registered company, not an individual. Be cautious—courts can challenge sham contracts.
I let a flat for £120,000 per year. Is this affected by the Bill?
No. Tenancies with rent over £100,000 per year fall outside the AST framework and are not covered by the Bill.
What if I rent out to family for free?
If no rent is charged, the arrangement is not a tenancy in law, and the Bill would not apply.
My tenant lives in my holiday property for three months. Do the new rules apply?
Not usually. Properly structured holiday lets are excluded, provided the occupier has no right to remain long-term.
How can I prove the Bill doesn’t apply to my contract?
Keep written agreements, proof of ownership, and records of occupancy. Consider legal advice for complex situations.
What happens if I misclassify a tenancy?
You risk legal action, fines, and your eviction notice may be deemed invalid. Always structure agreements accurately.
Are student lets covered by the Renters’ Rights Bill?
Yes—most student lets are ASTs and fall under the Bill unless the accommodation is university-owned or purpose-built halls.
Do Airbnb or short stays fall under the Bill?
No. As long as they’re structured as short-term holiday lets and not long-term tenancies, the Bill doesn’t apply.
Can councils intervene in excluded contracts?
Yes, if there are breaches of housing standards, overcrowding, or unlawful eviction. Council powers are wide-ranging.
Conclusion: Proceed with Clarity and Caution
The Renters’ Rights Bill represents a major evolution in rental law—but it does not encompass all tenancies.
Landlords must be aware of the types of contracts that fall outside its scope and ensure they do not misclassify tenancies either by accident or design. Legal clarity, documentation, and professional advice are key.
Whether you’re a seasoned landlord, a letting agent, or a first-time investor, knowing when and where the Renters’ Rights Bill does not apply is just as important as knowing where it does.
It is important to note the Renters Reform Bill is not yet law. When it comes into law we will publish a detailed article so we know exactly what the new law is and how it works practically.
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