Are you a landlord or tenant in the UK and confused about whether to opt for a company let or an Assured Shorthold Tenancy (AST)?
Making the right decision regarding the type of tenancy agreement can have a significant impact on your rights, responsibilities, and legal protection.
In this article, we will compare and contrast a company let versus an AST, providing you with the essential information you need to make an informed choice.
If you are a property owner considering letting your property to a company rather than an individual tenant, it is crucial to understand the key differences in terms of legal obligations, rent duration, and possession rights.
On the other hand, as a tenant, being aware of the advantages and limitations of both options will help you decide which type of tenancy arrangement best suits your needs and circumstances.
By examining the pros and cons of company lets and ASTs, we aim to equip both landlords and tenants with valuable insights, enabling them to navigate the complexities of renting property in the UK effectively.
What is a Corporate / Company Let Agreement?
A corporate or company let agreement is a type of tenancy arrangement where a property is rented out to a business or company, rather than an individual tenant.
This type of agreement is becoming increasingly popular among landlords who wish to provide accommodation for employees of a company or for businesses that require short-term or flexible rental solutions.
In a company let, the tenant is the company itself, not the individual employees who may occupy the property.
This means that the company, rather than the individual employees, is responsible for the terms of the tenancy agreement, including the payment of rent and any other financial obligations.
The company is also responsible for ensuring that the property is well-maintained and that any damage or issues are addressed promptly.
Benefits
Company lets are often favoured by landlords because they can provide a more stable and reliable source of rental income, as the company is typically responsible for the full term of the tenancy agreement.
Company lets may offer more flexibility in terms of the length of the tenancy, as the agreement can be tailored to the specific needs of the business.
This can be particularly beneficial for businesses that require short-term or temporary accommodation for their employees.
Key differences between company let and AST
One of the key differences between a company let and an Assured Shorthold Tenancy (AST) is the nature of the tenant.
As mentioned, in a company let, the tenant is the business or company, rather than an individual.
This has several implications for the tenancy agreement and the rights and responsibilities of both the landlord and the tenant.
Tenancy Length
Another significant difference is the length of the tenancy agreement. ASTs are typically shorter in duration, with a minimum term of six months and a maximum term of two years.
In contrast, company lets can be more flexible, with the length of the tenancy agreement often tailored to the specific needs of the business.
This can be particularly beneficial for companies that require temporary or short-term accommodation for their employees.
Legal protections
Additionally, the legal protections and rights of the tenant differ between company lets and ASTs.
ASTs are governed by the Housing Act 1988, which provides tenants with certain rights and protections, such as the right to remain in the property for the duration of the tenancy agreement and the right to receive proper notice before the landlord can seek possession of the property.
In contrast, company lets are not subject to the same legal protections, and the landlord may have more flexibility in terms of ending the tenancy agreement or seeking possession of the property.
Is a Company Let an Assured Tenancy ?
The short answer is no, a company let is not an assured tenancy.
Assured tenancies are a specific type of tenancy agreement that are governed by the Housing Act 1988 and provide tenants with certain legal protections and rights.
AST
In an assured tenancy, the tenant is an individual, and the landlord is typically a private landlord or a housing association.
Assured tenancies are subject to specific rules and regulations, such as the requirement for the landlord to provide the tenant with a written tenancy agreement and the right of the tenant to remain in the property for the duration of the tenancy agreement.
Company Let
In contrast, a company let is not an assured tenancy, as the tenant is a business or company rather than an individual.
Company lets are not subject to the same legal protections and rights as assured tenancies and the landlord may have more flexibility in terms of ending the tenancy agreement or seeking possession of the property.
Do Buy-to-Let mortgage lenders accept Corporate Let agreements ?
When it comes to buy-to-let mortgages, the acceptance of corporate let agreements can vary among different lenders.
Some lenders may be more willing to accept corporate let agreements than others, depending on their specific lending criteria and policies.
Mortgage companies like company let agreements
Generally, lenders may view corporate let agreements as a more stable and reliable source of rental income, as the tenant is a business or company rather than an individual.
This can be particularly appealing for landlords who are seeking to minimise the risk of tenant turnover or rental arrears.
Things to consider
However, it’s important to note that not all lenders will accept corporate let agreements, and those that do may have specific requirements or conditions that must be met.
For example, some lenders may require a minimum term for the tenancy agreement, or they may have restrictions on the type of business or company that can be the tenant.
Advantages of company let for landlords
Stability
One of the primary advantages of a company let for landlords is the potential for a more stable and reliable source of rental income.
As the tenant is a business or company, rather than an individual, the landlord may be less likely to experience issues such as rental arrears or tenant turnover.
Flexibility
Company lets can offer more flexibility in terms of the length of the tenancy agreement, as the agreement can be tailored to the specific needs of the business.
This can be particularly beneficial for landlords who are looking to provide accommodation for short-term or temporary employees, or for businesses that require flexible rental solutions.
Reduced Maintenance
Another advantage of company lets for landlords is the potential for reduced maintenance and administrative responsibilities.
In a company let, the tenant is typically responsible for ensuring that the property is well-maintained and that any issues or damage are addressed promptly.
This can help to reduce the landlord’s workload and potentially lower the overall costs associated with managing the property.
Stayful Company Let Agreement
Stayful is a property management company that specialises in corporate let agreements.
They offer a unique company let agreement that is designed to provide both landlords and tenants with a streamlined and efficient rental experience.
One of the key features of the Stayful company let agreement is the flexibility it offers.
Landlords can choose from a range of tenancy lengths, from short-term lets to longer-term agreements, depending on the needs of their business tenants.
This can be particularly beneficial for landlords who are looking to provide accommodation for temporary or short-term employees, or for businesses that require flexible rental solutions.
If you are interested in guaranteed rent through our company let agreement then click the link below and let’s have a chat1
Free Company Let Agreement Template
If you are interested in sampling a draft company let agreement template or need one for a specific tenancy agreement, then click the link below as we have a free company let agreement for landlords interested in a company let agreement.
Company Let Agreement
