What Is a Company Let?
Property can be rented by a company who can then allow employees and/or visiting colleagues etc to stay there for a set period of time or overnight. Perhaps the directors of the company may stay there as a perk of the job. Letting agents refer to this as ‘a company let.’
If the property is then sublet to customers though, it falls under commercial property law rather than residential.
Differences Between Residential and Company Let Rental Costs
When a property is let to a company rather than an individual the Housing Act 1988 does not apply. Rather the tenancy is subject to what is referred to as ‘common law.’ One of the big differences is when it comes to how much the rent is. The landlord of a company let can charge as much as he or she likes (it depends on whether or not the company wants to pay it). Usually rent increases are only allowed if there is a clause in the rental agreement which states this. The alternative is to set up a new tenancy agreement.
How to End a Company Let
If a landlord wants their property back from a company it’s simply a case of issuing a Notice to Quit. If the company is still there after the deadline then possession proceedings can be brought before court.
Ending a company tenancy during a fixed term lease is more difficult and can only really be done if the tenant is in breach of terms and at which point the landlord can instigate the ‘forfeiture’ procedure.
Why Landlords Let to Companies?
Not only can landlords expect to charge more money for a company let, but this type of tenancy also tends to be for longer periods. Some company lets can even be for as long as 10 years.
Although these long lets do provide a landlord with a certain amount of ‘freedom’ in that he or she doesn’t have to worry about the mortgage on the buy to let for the next decade, it’s not all a bed of roses.
There can be cases where companies go under (ie insolvent), for instance. And, were this to happen, then there is very little chance of a landlord recovering rent which hasn’t yet been paid. One way to get around this is to ask the director/s of the company to be guarantors. This means that if the unthinkable happens (ie the company goes under) you can still sue the individual directors for that lost rent.
Another downside to a company let as far as the landlord is concerned, is that you have no say over who lives in the property while the company abides by the rental agreement. This means an individual who has previously failed numerous referencing and checks could be put there, simply because he or she is a company employee. It could also be that the company have put a couple of young visiting colleagues there for several months who enjoy having parties at weekends – to the detriment of your furnishings. In other words, a company let doesn’t mean you won’t have to keep an eye on your property.
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