A company let is when a company takes on a residential tenancy agreement as the ‘tenant’, rather than an individual. When there is a company let (contract between you the landlord and the company) the company is not a protected tenant, so you have more rights than under an AST. It is the company which is liable to pay your rent, not their sub tenant. The sub tenant (occupier) pays the company and the company pays you. However the company is liable to you for the rent whether or not the sub tenant / occupier pays them. Company lets are not assured short-hold tenancies (ASTs). The reason for this is that the act which set up the protective code which governs ASTs, the Housing Act 1988, specifically states that its provisions apply only to ‘individuals’ i.e. not to artificial beings such as companies. Companies are businesses (so the argument goes) and do not need the protection that the act gives. What this means is that ‘company lets’ (as they are called) are governed by the underlying ‘common law‘, the legal rules which regulated tenancies before the Rent Act and Housing Acts came along to change them.
To summarise – there are certainly some advantages for landlords to rent their property as a company let.
- If a company is of a good financial standing and has a sound credit history and reputation, it means that you the landlord will benefit from much more secure rental income over the course of the tenancy then is the case with AST tenancy.
- Also, in company lets – the company has less protection as a tenant then is the case with standard AST’s, therefore giving more control and better protection to the landlord.