Reviewed: 4th August 2016
The provision of privately-owned student accommodation is set to overtake that provided by universities, if current growth rates continue. This sector has experienced strong development over recent years, both in terms of new investments, and also reinvesting in existing property assets.
Unfortunately, there are always going to be casualties in such a fast-growing market, whether due to financial mis-management, or in this case simply to a sudden loss of reputation on social media.
So if your property investment company is struggling, or has already entered insolvency, you are probably wondering what happens next.
The Housing Act 2004 sets out statutory codes of practice for the privately-owned student accommodation sector. Unipol, the codes administrator, operates a formal process of audit and accreditation, as well as a complaints procedure for students.
Further education demands a heavy investment from young people and their parents, and it is crucial for landlords to understand what is required under the codes, ensuring their service provision meets the standards demanded.
The uncompromising, ongoing inspection and audit system carried out by Unipol, helps landlords to market their property, and instils greater confidence in students. Assuming that standards are high enough, the accommodation becomes accredited – an important aspect for those looking for a good quality place to live during their university years.
The insolvency practitioner appointed to deal with the process takes on the landlord’s responsibility under the codes. In doing so, they are able to reassure students that continuation of service is a priority, and they are not going to lose their home.
In this respect, fast and responsive communications with the scheme administrator are essential. Unipol has issued guidelines that should be followed in these cases, including:
Deposits for assured shorthold tenancies must, by law, be placed in a government-recognised tenancy deposit scheme, under either the custodial or insured systems. If a deposit is held in an insurance scheme, a notice period prior to termination will begin, during which time the administrator must move the money to a custodial arrangement.
The same applies to other funds paid in advance by students or their parents, which must be protected in a holding or escrow account.
Underpinning these requirements and obligations of private landlords is the simple fact that a property will be more likely to sell if Unipol accreditation still applies. Not only does this provide a satisfactory solution for the tenant, it helps the owner to achieve the maximum value for their property, and reduces the long-term effects of insolvency for themselves and their creditors.
Real Business Rescue can offer professional advice if you own student accommodation and believe insolvency is looming, or you need help to understand the best way forward. Call one of our expert team to discuss your situation on a free-of-charge basis for the initial appointment.