Legal Standards & Regulations in the Student Housing Sector

Introduction

The student housing market in the UK has been maturing rapidly since 2010. Like any maturing market, it also requires to be monitored through Student Housing Regulations. The Housing Act, 2004 is the oldest regulation that has created a differentiated set of conditions for separate categories of housing. The other two major laws are -

1. Code of Practice for the Management of Student housing laws
2. Code of Standards for Larger Residential Developments

They lay out the various standards and the certification that needs to be followed by the property management groups.

Significance of student housing regulations

The student housing sector has been getting organized and highly regulated due to the growing student demands and increased income potential. Thus, it warrants discussing the legal regulations, which have helped this sector of real estate become increasingly organised and rapidly profitable.

The earliest PBSA regulations which tried to convert student housing into an organized sector were passed in the years, 1985 and 2004. This was followed by a ‘Code of Practice for the Management of Student Housing’, passed in 2019 and a ‘Code of Standards for Larger Residential Developments’ passed in 2022.

The 3 Laws governing the working of PBSAs in the UK

The Housing Act 2004

• The Housing Act, 2004 under student housing regulations, ****was ****one of the primary acts governing the working of student accommodations in the UK.
• It separated the different categories of student housing available in the market.
• It set standards of health and safety requirements for rental accommodations and measured with the ‘Housing Health and Safety Rating System’ for the certification process.
• The code exempted property managers under special circumstances, so could they get partial relaxation on exceptions.
• Under the rating system, property managers were required to submit an analytical document on the mitigation of hazards and how to access onsite help.

Code of Practise for the Management of Student Housing

• The Code of Practice for the Management of Student Housing was developed in 2019.
• It was developed in cooperation with a range of property management groups and property management services, focusing on student housing regulations, to assist them in maintaining the standard of the housing units.
• It also clarifies the standards and procedures that students can expect from their rental accommodation and the process of complaints in case of defections.

Code of Standards for Larger Residential Developments, 2022

• The Code of Standards for Larger Residential Developments, 2022, which includes PBSA regulations, applied to university accommodations.
• The code sets ‘management standards’ for all housing establishments ‘managed and controlled’ by higher education institutes.
• It did not apply to head-leased properties, that is, those which are sub-let in the private rental market to clients and approved for social housing.
• The main purpose of these student housing laws was to create a transparent and effective framework to ease the transactional relationship between the educational establishment and full-time students (in the role of lessor and lessee respectively)
• This code is supported and followed by the National Union of Students (NUS), the Department for Communities and Local Government (CLG), The Accreditation Network UK (ANUK) and other such bodies.

Under section 2 of the Code, which encompasses student housing regulations, all establishments must have a formal policy that ensures a suitable and sufficient Fire Risk Assessment (FRA) is conducted by a competent person for all residential accommodations.  The FRA and significant outcomes must be recorded in a formal report. The maintenance and safeguarding of all the evacuation routes included in the FRAs must be in accordance with British standards, including the

1. Emergency Lighting Systems
2. Fire safety notices and evacuation signs
3. Fire doors (including door closers, push bars, vision panels, and ironmongery)
4. Automatic door release mechanisms
5. Fire extinguishers and fire blankets

Participation of educational establishments in property management

The metrics below are measured to ascertain whether the University is managing and controlling its housing in compliance with student housing regulations.

Legislative Implications for Breaking Student Housing Regulations

• The Housing Act 2004 was not devoid of loopholes. Section 233 served as a measure of the good conduct of the property managers and the educational establishments. But it did not state how an occupant could take action if the activities were not performed as stated under the act. This made the housing act more of a roster of rights and responsibilities of the body that managed and controlled student housing.
• Appendix III lays down the meaning of student housing jargon like ‘en-suites’, ‘central heating’, ‘normal working hours and various other terminologies used to define the various kinds of services provided in the PBSAs.
• All of those who wanted to be a member of this code would have to go thru a self-assessment, which would then be reviewed centrally and the key aspects would be verified, independently. Members of this code would be reviewed by an external team of verifiers or by a peer-to-peer system

Advantages & disadvantages of governance in student housing

Even though PBSA regulations have multiple advantages for making purpose-built student accommodations more organized as a sector for students, there are still a few disadvantages that come to mind during the governance of student housing. We’ve highlighted a few pros and cons for the same:

Advantages

• The code sets the directives for best practices. Thus, managers and occupants will jointly benefit from the implementation of the code passed in 2022.
• Misunderstandings and disputes will be reduced and resolved promptly and efficiently.
• The PBSA regulations made educational establishments comply with explicit marketing of materials and other occupant information.
• The code would be actively and positively promoted amongst students so that they would be able to address their concerns, under the code (2019).

Disadvantages

• With properties being regulated so stringently, it takes a lot of time to obtain a license or start an accommodation, thus delaying the process.
• Complaints take a lot of time to resolve as occupants and establishments would have to go through several convoluted processes.
• Amendments or revisions in personal policies take a long time, even when the set PBSA regulations have loopholes. This is because the processes involve several chains of command.

Top 3 highly regulated countries in student housing

The top three student destinations in international higher education are also the top countries where student housing regulations are most defined: the UK, the USA and Australia.

United Kingdom

• The renters’ reform bill was recently passed in the UK and laid certain rules to regulate the student housing market-Under the Fixed Term Tenancy Agreement, students could sight a lease of 12 months or less and leave at any time with a 2-month notice period.
• The rent can be hiked only once during the stay of the student, irrespective of the market condition.
• The bill prohibited discrimination against renters with pets and children.
• However, tenant's misdemeanour could lead to immediate eviction. Similarly, landlords are
• Cases of disputes were to be solved fast and through an ombudsman.
• The quality of amenities on the property has to meet hygiene standards and poor quality service can be penalised.

United States of America

• At American universities, most students prefer to live on campus or close to the campus. Students’ experiences differ a lot between on-campus and off-campus accommodations
• On-campus housing tends to fill up faster and has a long waiting list. They also have a higher rental cost. So, most students prefer off-campus housing that is close to their university campuses and the city centre.
• There are a few regulations that govern student housing practices in the US. However, these are only rubrics that differentiate the operations of on-campus and off-campus accommodation, regarding which party is responsible for taking action.

Australia

• Australia has launched a student accommodation council that will work for student housing in Australia.
• The council is a newly formed branch of the Property Council, specifically created to represent and advocate Australia’s PBSA (Purpose Built Student Accommodation) sector.

Conclusion

The student housing regulations work with the intent of safeguarding the interests of all stakeholders, primarily students, property managers, and higher educational establishments, which offer student accommodations.

They endure equitable distribution of rights and powers. The codes of practice help standardize student housing as an organized sector of the real estate market. However, in our discussion, we reflected on a lack of strong penal systems in an event of defection. A maturing market like student housing might be in urgent need of the same. However, the recent housing crisis across all continents of the world has made the local governments ease the regulations to promote construction, investments, and development of student housing. Furthermore, as more student housing properties are to be developed, the data driven insights will definitely help maintaining occupancy levels, and for that list with amber the student rental success journey today!

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