Co-Living - a regulatory stepping stone between hotels and private rented accommodation


The Guardian, being The Guardian, has published an soul-searching article exploring the social and sociological aspects of co-living.

Less well understood is the regulatory regime in which co-living sits.  Generally-speaking, owners aim is to create something more in line with serviced apartments or aparthotels rather than a block of flats in the assured shorthold tenancies, which sits firmly in the private rented sector. 

But co-living buildings sit in a grey regulatory area. 

For example, under the Tenant Fees Act 2019 although the owner of a co-living building will generally create "licences" rather than "tenancies", licences to occupy housing"  are still caught. That means (in contrast to a hotel room where the Act does not apply) that all charges to those living in co-living buildings who signed on or after 1 June 2019 are prohibited unless specifically permitted by the 2019 Act. And that poses a challenge for a business model focussed on flexible, demand-led pricing for services.

A licence to occupy an apartment in a co-living building is not (on the face of it) an assured shorthold tenancy agreement ("AST") which is heavily regulated - for example on gas safety and possession procedure. However, if the co-living licence: (a) is for a fixed term for a rent, and (b) grants exclusive possession, it may be an AST, even if called a "licence". There is a folk myth that an agreement for under 6 months cannot be an AST (which ceased to be the case in February 1997). Using "lift and shift" provisions in the licence may be sufficient to stop an agreement becoming an AST, but the point has not been definitively tested.

A person's home might well be his or her castle, but how secure those battlements are is an open question...

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Each company presents its accommodation as a solution to the urban housing crisis. Here, at last, is a way to provide affordable homes for younger people cut out of the market, while at the same time pooling resources, fostering community and catering for an increasingly mobile generation. With 4.8 million Britons now self-employed, co-living is pitched as a utopian response to a rapidly changing society. But what from one angle looks like a revolutionary proposition can just as easily be seen from another as a cynical ploy by property developers to cash in on a generation living in the “age of loneliness”, locked in a perpetual struggle to find a place they can call home.
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