As student numbers continue to fluctuate in response to the new fee arrangements, there is the potential for universities to be ‘caught short’ with insufficient student accommodation available to cope with the number of students arriving on their doorstep, in September, a substantial proportion of them having reverted to the clearing system to secure alternative university places on relatively short notice.
The fact that there is no cap on the number of students recruited by a university, who have achieved A level grades of AAB+, may exacerbate this situation further.
Universities are therefore potentially required to ‘think outside the box’ in securing alternative, short term accommodation whilst longer term (but capital demanding) projects are progressed.
It is not uncommon for universities to consider arrangements with local hotel providers for the use of their facilities by students during this period of demand. There are however a number of matters to consider when pursuing this alternative accommodation arrangement.
The hotels, if willing to accept students as long terms residents, are unlikely to be willing to put aside the entirety of their facilities for use by students and an identified number of rooms will need to be agreed. This agreement will rest on a level of guaranteed income from the university and their students during the term of the agreement.
The university will need to ensure that these rooms are fully operational, achieve the expected levels of quality and comply with policies that they have in place, for their own student accommodation, including for example the use of telephone, television and internet facilities.
Prior to the allocation of a tenant to each room, it is likely that the operator will require an element of guarantee, in the form of a booking fee and/or a deposit payable by the student which is held until the vacation of the facility.
There may be hotels which offer additional opportunities such as car parking, which obviously would attract a further fee, and clarity would need to be achieved as to the responsibility for payment of those fees and compliance with regulations around the car parking.
Although students will be directly responsible for rental payments to the hotel operator, the operator (as mentioned above) will require the security of a guaranteed income from the allocation of these rooms for university use, which will need to be negotiated based on a commercial rate. In the event that the actual income received from the students in occupation does not achieve this guaranteed amount, the balance will be due from the university. Some operators may demand that the guaranteed payment is made in advance, with rents then being recovered by the university or repaid by the operator to the university on certain dates.
It is likely that the usual form of student tenancy can be adapted for use to be signed between the landlord (the hotel operator) and the student tenant. This will cover additional matters such as behavioural procedures but clarity will be required around those matters which are the responsibility of the university as apposed to the hotel landlord (detailed below).
Matters such as marketing of the facilities and communication with students will need to be controlled by the university, with the co-operation of the operator. The university may also wish to consider whether it has the right to display signage at the hotel facility for the duration of the agreement.
Responsibility for any damage to the facilities, during the occupation by the student, is likely to be divided. The operator will maintain insurance in respect of damage to the structure and the building, however the fixtures and fittings within the room (as the items most at risk) are likely to be the responsibility of the university, and ultimately of course controlled under the tenancy arrangements with the tenant. A schedule of condition detailing the state of those fixtures and fittings is always wise.
Interfacing with students
Although the owner of the hotel is likely to provide the cleaning, servicing and utility arrangements around the use of the hotel facilities, the university will be keen to control the following aspects of their occupation:
- The student induction to use of the hotel, which will be given with support from the operator, and the continuing liaison contact with the student which again will be divided in terms of responsibility for student individuals and property related matters between, respectively, the university and the operator.
- The allocation of tenants to the individual rooms will be the responsibility of the university. There are likely to be specific limitations imposed by the operator preventing the university from allocating any rooms to a university student who is less than 16 years old or is a vulnerable adult under safeguarding legislation or to any other student to whom it would be inappropriate to allocate such a room.
- Student disciplinary and behavioural issues are likely to be divided in terms of responsibility, between the operator and the university, again based on whether the issues arise from the use of property or a wider student matter.
- Matters such as welfare support and residential assistance support will remain with the university.
- Matters such as the provision of laundry facilities depend on what the operator of the hotel is able to offer alongside its usual trade requirements. The associated cost of that offering may not be attractive if the location of the hotel, to similar university facilities, offers students flexibility.
It is also sensible to identify in advance those matters which will remain the responsibility of the student tenant, including responsibility for guests, damages, payment of rent etc.
Consideration will need to be given, through the due diligence process, to the hotel’s compliance with regulatory and statutory obligations. Given the university’s statutory responsibilities any arrangement with an operator of a hotel will need to contain arrangements governing each parties’ responsibilities around matters including:
- Equality Act obligations;
- anti-discrimination provisions;
- health and safety
- data protection;
- freedom of information; and
The arrangement will not take the format of a landlord and tenant responsibility and therefore will not be protected in any way as a tenancy but represents a commercial agreement between two entities to secure accommodation for the benefit of the university and income for the benefit of the hotel operator.
The arrangement with the operator will need to be sufficiently flexible to allow termination in full, at the end of any academic term or agreed longer date. It will however also be key to ensure that the university is able to reduce the number of rooms required, by terminating the agreement in part, if there has been a surplus allocation of rooms and the guaranteed payment can be reduced by the university. This will require a certain agreed period of notice to ensure the operator can revert to its usual trade procedures.
Use of hotel facilities, by universities, is often a mutually convenient arrangement which will attract a discount on standard hotel operator rates due to the security of long term occupation, but also provide the university with a short term solution to a potentially difficult situation arising from the need to house young students, new to a city, in facilities which are of a guaranteed standard. This of course needs to be balanced with the need to ensure that commercial terms accurately reflect the needs of the university and the students and that the proposals are accurately communicated to students, in order to avoid harm to the institution’s reputation and negative impact on the student experience.