This article is the first in a series of articles about the Renters’ Rights Act 2025. To read the second article, click here.
Providing accommodation for employees remains common practice on many farms and rural estates. In England, this can currently be done in several ways, including as:
- an Assured Shorthold Tenancy (AST)
- an Assured Tenancy
- an Assured Agricultural Occupancy (AAO) or
- a Service Occupancy.
The housing of agricultural workers needs to be approached differently from housing for other rural workers. This is because an AAO can arise where a qualifying agricultural employee occupies accommodation provided by the employer, and this will give the agricultural worker long-term security of tenure. For that reason, employers will want to avoid service occupancies for agricultural workers, but they can be used for other rural workers such as gamekeepers.
Since the creation of ASTs by the Housing Act 1988 (HA 1988), many lettings to agricultural workers have been via ASTs (with the employer landlord having served a Form 9 Notice in advance to avoid the creation of an AAO). This has given employers the ability to regain possession of the accommodation using the section 21 process when an agricultural worker’s employment terminates.
The Renters’ Rights Act 2025 (RRA 2025) will abolish ASTs and end section 21 ‘no fault’ evictions and these provisions are due to come into force on 1 May 2026. All ASTs will automatically become assured tenancies, with landlords having only limited grounds to regain possession from their tenants.
After 1 May 2026, the two key means of providing accommodation to rural workers will be Service Occupancies and Assured Tenancies. For agricultural workers, employers will want to grant Assured Tenancies alongside the relevant advance opt out notice.
Service occupancies
A service occupancy is a type of licence with no security of tenure. It is designed for use where an employer requires a worker to live in a property owned by the employer for the better performance of that worker’s duties. There is a strict test to qualify for a service occupancy. An agreement will only be a service occupancy if either:
- it is necessary/essential for the worker to occupy a particular house or
- the worker can perform their duties better by living at the property and it is an express term of the employment contract that they do so.
The courts have demonstrated that this is a high bar to meet. The need must be genuine and not merely convenient for the employer. Examples of a true service occupancy may be a boarding- school teacher, hotel manager or on-site security guard.
Service occupancies are a useful mechanism to provide accommodation for rural workers such as gamekeepers and housekeepers. A service occupancy offers flexibility for employers who will be able to terminate the agreement in one of several ways:
- employer terminating the employment contract without the need to first serve a notice to quit
- employee moving out of the accommodation or
- service of a notice to quit by the
However, service occupancy agreements will never be appropriate for agricultural workers because of the risk of inadvertently creating an AAO. Where there is a tenancy or licence capable of protection and the “agricultural worker condition” has been met, security of tenure will be obtained under the HA 1988 with the tenancy or licence becoming an AAO.
The “agricultural worker condition” can be met not only if a workers’ proposed employment is agricultural but also if an employee’s work prior to moving into the dwelling was agricultural. An AAO will continue long after the tenant’s employment because it confers lifetime security on an occupant and includes one succession to their spouse or a member of their family. For more information on AAOs, see Farm cottages: Finding a way through the statutory maze.
Assured tenancies
Once the relevant sections of the RRA 2025 come into force, ASTs will no longer be an option for landlords and instead the default form of tenancy will be an Assured Tenancy. When granting an Assured Tenancy to an agricultural worker, landlords will still be able to avoid granting an AAO by serving an ‘opt-out’ notice on the worker before they go into occupation.
Terminating an Assured Tenancy for landlords will not be as easy as terminating a service occupancy or an AST. The RRA 2025 varies the existing grounds that landlords may use to obtain possession. Ground 5C expands on the old Ground 16 introducing a specific mandatory ground for reclaiming possession where the dwelling was let because of the tenant’s employment. It covers two scenarios:
- where the employment has come to an end or
- where the tenancy was not meant to last the duration of the employment and the dwelling is required to house a new employee.
This ground can be used where there is an agreement between a landlord and an employer for the landlord to house the employee – it will cover both agricultural and other rural workers. Ground 5C provides flexibility for estates and rural businesses where the employing entity is different to the landowning entity; this is unlike service occupancies where the employer must own the property.
If either of the scenarios in Ground 5C are made out, i.e. the worker’s employment has ended or the early employment requirement applies, the employer landlord would need to serve at least two months’ notice to terminate the Assured Tenancy.
Next steps
Employers should consider existing and future housing arrangements of employees to ensure that they are appropriate and do not limit their ability to recover possession. In particular landlords should:
- consider if they need to serve any s.21 notices before the ability to serve one ends on 1 May 2026
- maintain comprehensive written records documenting the accommodation arrangement and the employment contract of employees (this will be particularly important where a landlord wishes to rely on new grounds such as Ground 5C to reclaim possession)
- once the RRA 2025 comes into force – where housing agricultural workers – ensure they have served the requisite opt out notice in advance
- seek legal advice if they are concerned that they may have a service occupancy agreement housing an agricultural
