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The "Commercial Exemption": How to Legally Opt-Out of the Renters Rights Act 2025
- DNB Future Properties
- 5 days ago
- 3 min read
Prefer to read the full guide? Download the full guide here.
The Renters Rights Act 2025 Exemption
In our last post, we looked at the gloom surrounding the Renters Rights Act 2025 (formerly the Renters Reform Bill).
Today, we are looking at the solution.
The regulations specifically target Residential Properties and Tenancies.
They do not apply to the commercial hospitality sector. This is your Renters Rights Act 2025 Exemption.
By pivoting your property from a traditional Buy-to-Let (BTL) to a Furnished Holiday Let (FHL) or Serviced Accommodation (SA) model, you move your asset into a completely different legal framework.
Here is why Furnished Holiday Lets offer the freedom that Buy-to-Lets have lost.
1. License to Occupy vs. Tenancy
The legal difference lies in the contract.
When a tenant moves into a Buy-to-Let property, they sign an Assured Shorthold Tenancy (soon to become an Assured Periodic Tenancy).
This grants them significant rights to the property—it becomes their primary home, and removing them is a slow, legal process.
However, when a guest books your Furnished Holiday Let or Serviced Accommodation unit, they enter under a License to Occupy (a holiday rental contract).
They are guests, not tenants.
They have a primary residence.
The stay has a definitive start and end date.
At the end of the booking, they have no legal right to remain in the property.
The entire process works exactly like booking a hotel. You are not providing a home; you are providing a service.
2. True Possession Control
The biggest fear for landlords under the Renters Rights Act 2025 is the inability to access their own property due to the end of "no-fault" evictions.
With the FHL model, you regain 100% calendar control.
Need to inspect the property? You can do it between guest stays (every few days).
Need to do maintenance? You can simply block the calendar for a week.
Need to sell the asset? Stop taking bookings, and the property is vacant and ready for sale immediately. No waiting for court dates or bailiffs.
3. Avoiding the Ombudsman Trap
While FHL owners must still adhere to strict safety laws (Fire, Gas, Electrical), your relationship with guests is commercial, not residential.
You are not subject to the new Private Rented Sector (PRS) Ombudsman in the same way residential landlords are. Disputes are generally handled through commercial channels (like Airbnb’s Resolution Center or your own Terms & Conditions), avoiding the risk of government-imposed rent repayment orders or fines for administrative errors.
The Trade-Off: The 70 Day Rule
This freedom comes with a requirement. To legally qualify for this status (and the tax benefits we will discuss in the next post), you must meet HMRC’s occupancy criteria:
Your property must be available for 140 days a year.
It must be actually let for 70 days a year.
It requires active management and a focus on hospitality—but the reward is total control of your asset.
Unsure if your property qualifies for the switch?
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