Country estate tied cottage tenancy warning

Country landowners must pay particular attention to ensuring tenancy agreements, licences and contracts for employees living on their premises are legally watertight or face possible future difficulties.

The legislation surrounding tenant workers was complex and taking expert advice was essential to avoid pitfalls. Getting it wrong could lead to country estates and farms being left with former employees legally entitled to remain in tied cottages.

The warning comes from Solicitor Stephen Woodman, an employment specialist at award-winning Dorset law firm Blanchards Bailey LLP, following his recent instructions from a large country estate. Stephen managed to put in place contracts of employment tied to service occupancy agreements for all those staff living on cottages in the grounds.

He said: “Landowners may well feel that giving workers accommodation on their estate to be a practical and convenient option for both parties, but that may well not be the case when they want to regain their property.”

Many employers have used Service Occupancy Agreements (SOA) where possible, as they are easier to bring to an end when employment ceases than Assured Shorthold Tenancies (AST).

An SOA gives the worker a licence to live at the property to better perform their duties, but when their employment ends, so does the service occupancy.

However, SOAs granted where the work is agricultural and living in at the premises is not essential for the performance of that work can lead to the tenant having security of tenure under the Housing Act 1988, which should be avoided at all costs.

Employees can end up having security of tenure and refuse to move, even after the employment is terminated. Therefore, where the work is agricultural in focus, it is important to take advice on whether an AST may be the better option.

Stephen said country estates where tenancies were agreed verbally and with a handshake, meaning no paperwork existed, were commonplace. The arrangements were assumed to be simple – until things went wrong.

He urges all landowners with live-in employees, including schools, with live-in employees – such as grounds keepers, gardeners, estate managers, herdsmen, farmers etc – to ensure written agreements were in place to prevent future disputes and issues.

Stephen works with individuals and employers, ranging from local family businesses to national companies, and advises on all aspects of employment law and HR matters.

One hundred-strong Blanchards Bailey is a Legal 500 firm – making it one of the top firms in the South West – and is based in Blandford with offices in Poundbury, Shaftesbury and Weymouth.

The firm received unprecedented recognition in UK's leading law sector directory, the Legal 500. The annual publication, The Legal 500 2018/19, recommends the firm in a record seven specialist categories with 11 individual lawyers mentioned including all five Partners.

Blanchards Bailey also won a hat-trick of titles at the 2019 Dorset Legal Awards: Law Firm of the Year (up to 99 employees), Company Commercial Team of the Year and Private Client Team of the Year.