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A2.3: Main page

Living in establishment accommodation

1. Charges for establishment accommodation

1.1. If you live in establishment accommodation you will be charged a rent based on the open market value of the property. Unless you:

  • are entitled to pay a statutory “fair rent” (see appendix A2.3i)
  • are classed as a “key staff” member (see paragraph 3)

1.2. As a tenant you are responsible for the payment of:

  • Council Tax
  • water charges
  • the lighting and heating of the accommodation
  • all other personal bills relating to the property (e.g. telephone, TV licence)

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2. Occupation of establishment accommodation

2.1. Occupying establishment accommodation may have tax implications. You should contact your local Inland Revenue Office to find out how this will affect your tax.

2.2. Occupying establishment accommodation, where this is required as part of your job, does not mean that you are a tenant. You will have a service licence (in Scotland a right to occupy) and the term ‘rent’ is used for convenience. The amount payable is payable under the ‘Occupation Agreement’.

2.3. If you leave the establishment’s employ you will be expected to leave your accommodation. In exceptional circumstances the establishment may be able to offer alternative accommodation but if it does this will be at full market rent on a short-term tenancy.

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3. Key staff

3.1. Who are “key staff”

The term "key staff" means employees who are required by an establishment to occupy establishment residences for one of the following reasons:

  • because of the nature of their duties (i.e. there is a specific liability to carry out extra duties which require them to be on call outside normal working hours, particularly at weekends); or
  • because of the remoteness of the locality; or
  • because their occupancy of establishment accommodation is essential on grounds of safety, efficiency, or the general public interest

Key staff status will lapse if the conditions in this paragraph no longer apply.

3.2. Rent for key staff

Key staff will pay:

  • a rent based on the market value of the property; or
  • a fair rent if the service licence began before 15 January 1989 (see appendix A2.3i); or
  • a Standard Rent (see paragraph 4) if the service licence began before 1 April 1994

whichever is the lesser amount. This restriction of the rent to the lower of a), b) or c) will require the rent position to be reviewed periodically; e.g. whenever Standard Rent is reviewed (see paragraph 4.2 below) or there is a change in Fair Rent brought about by a re-assessment (see appendix A2.3i, determination and application of fair rents).

3.3. Appeal procedures, notice to quit, and rent rebates for key staff

The formal procedures for:

  • assessing and introducing fair or market rents
  • appeal against fair or market rents; and
  • rent rebates for fair or market rent

apply to key staff, subject to the following exceptions:

  • notice to quit is not necessary to terminate occupation as the right of occupation ceases immediately on termination of employment. Notice that the key member of staff is required to vacate the dwelling by a certain date will be given in writing
  • key staff in England and Wales who pay either Standard Rent or an Establishment Rent, are not eligible for a rent rebate

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4. Standard rent

4.1. Calculation

Standard rent will be a percentage of a key employee's annual salary. The percentage is calculated using the following formula:

(annual average rent * 100) / (85% of band C maximum)

The annual average rent is calculated by the establishment based on local rents for similar housing.

4.2. Review

The percentage of salary charged for Standard Rent will be reviewed at 2 yearly intervals and establishments will also set an annual review date when the Standard Rent percentage is applied to salaries that have increased during the past year. However, where a salary has been reduced, the new Standard Rent will be implemented from the date of the salary reduction.

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5. Holdover tenants

Staff (including key staff) who:

  • have left the establishment’s employment
  • continue to occupy establishment accommodation which is not immediately required

may be offered a new tenancy at the discretion of the establishment. A full market rent will be payable.

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6. Rent rebates

Employees (including key staff who do not pay a Standard or Establishment Rent) can apply for rent rebates. Each local authority will decide the charge for assessing rent rebates (if any), and establishments will make arrangements with individual authorities for meeting these charges. Local authorities will be fully reimbursed for their operating costs by the establishment.

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Last updated 01/02/2013

Amendment 150 - February 2013