You’re not alone if you’ve heard the term “company let” but aren’t sure what it means. A company let property is a residential property rented out to a business rather than directly to an individual. This means the company becomes the tenant, often to house employees for work purposes.
Understanding how company lets work is important if you own a property, work in property management, or are thinking about letting to companies. The rules and agreements can be different from typical residential lets, and there may be extra legal and tax requirements to consider.
Key Takeaways
- A company let property is a home rented to a business instead of a person.
- Legal rules and compliance differ from standard lets.
- Company lets have unique benefits and financial considerations.
Definition of a Company Let Property
A company let property is a home or flat rented by a business rather than by a person. The business uses the property for its own needs, often to house staff or for other work purposes.
Key Characteristics
A company let property means the legal tenant is a company, not an individual. The business signs the tenancy agreement and is responsible for paying the rent and looking after the property.
These lets often use an agreement called a company let agreement. This is different from a standard Assured Shorthold Tenancy (AST) because company lets are not covered by some of the same legal protections.
Landlords often ask for higher deposits or stricter terms. This is because companies may use the property for several employees or guests instead of one household.
You may notice that references and checks focus on the business’s finances, not on personal credit history. Maintenance responsibilities are often clearly set out in the agreement to avoid confusion.
Types of Businesses Involved
A range of businesses may use company lets. Common examples include:
- Large corporations moving staff for work.
- Small businesses looking for short-term accommodation for visits or projects.
- Letting agents working on behalf of a company.
In some cases, companies offer housing as part of a job offer. This is common in industries like construction, tech, training, or healthcare.
The size of the business does not prevent it from arranging a company let. Tech start-ups, agencies, and big firms might all seek company lets, depending on their needs at the time.
Businesses sometimes rent several flats or homes at once, especially for teams working on a project away from their usual location.
Distinction From Personal Tenancies
With a company let, the tenancy is between you (the landlord) and the company’s legal entity, not an individual person. This means the usual rules for renting to a person, such as deposit protection schemes and eviction notices under the Housing Act, may not always apply.
Company lets are not Assured Shorthold Tenancies (ASTs), so tenants do not have the same rights as with a personal tenancy. The company, not its employees, is responsible for damages, unpaid bills, or other issues.
Unlike personal tenancies, references check the company’s reputation and financial stability. Employees who stay in the property do so under the company’s control, and not as legal tenants in their own right.
This also means the landlord communicates with the business about repairs, notices, or any agreements, rather than with individual residents.
Legal Considerations and Compliance
When renting a company let property, you must follow specific legal steps. It is important to know your rights as a tenant and landlord, and to understand the rules you must follow.
Corporate Tenancy Agreements
A corporate tenancy agreement is a contract between a business and a landlord. The business, not an individual, becomes the tenant. This agreement outlines details such as rent, payment dates, and responsibilities for repairs.
Key points often included:
- Length of lease
- Use of property
- Maintenance obligations
- Notice periods
You must ensure the agreement is clearly worded. Both parties should agree on the terms before signing. It is a good idea to have a solicitor review the agreement, as company lets can differ from standard tenancy contracts. Make sure the lease lists the company as the tenant, not an employee.
Landlord and Tenant Rights
Both the company and the landlord have specific legal rights with a company let. For example, employees living in the property may not have the same protections as other tenants.
The business is responsible for meeting the terms of the lease. Landlords can expect rent from the company, not separate employees. If there is a problem, you must follow the rules for ending the tenancy, usually set out in the agreement.
Unlike standard rentals, some eviction rules and notice periods may be different. You must check whether the tenancy is classed as a common law or contractual tenancy and if specific protections apply. Always keep full records of rent payments, correspondence, and any disputes.
Regulatory Requirements
A company let must meet all legal safety and property standards. This includes gas and electrical safety checks, proper fire alarms, and an up-to-date Energy Performance Certificate (EPC).
You may need to register or licence the property depending on local council rules. There are fines for non-compliance.
Make sure you:
- Carry out safety inspections regularly
- Provide copies of certificates to the company
- Follow rules for deposit protection, even if a business pays the deposit
Some rules for company lets differ from residential tenancies. Always check the latest legal requirements for your area to avoid legal issues.
Benefits and Challenges of Company Lets
Letting your property to a company can offer stable income and convenience. However, it brings some risks and may affect tenant rights and responsibilities.
Advantages for Landlords
You may receive more regular payments with a company let, as most firms have good cash flow and prefer long-term agreements. This can lead to fewer void periods compared to private tenancies. Rental payments are often made on time, and companies usually maintain the property well because it reflects on their own reputation.
Letting to a company might reduce admin tasks. Companies often handle minor repairs, cleaning, and tenant management. This can save you time and reduce hassle. Some firms may agree to take the property “as seen,” meaning less pressure on you for upgrades or furnishings before they move in.
Key advantages:
| Benefit | Description |
|---|---|
| Regular Income | Companies often prefer long-term, secure leases. |
| Less Management | Firms handle day-to-day issues for their employees. |
| Lower Risk of Voids | Easy to find replacement employees for the property. |
Risks and Drawbacks
Letting to a company can mean less control over who actually lives in your property. Employees may change, and you might not meet or screen everyone who stays there. This can sometimes result in higher wear and tear if the property is used by many different people.
You may have less legal protection, as company lets are not always covered by standard tenancy laws. If there’s a dispute, the process for evictions or property damage claims can be more complex and costly. Companies could also go out of business, meaning you may risk losing your rental income.
You will likely need specialist insurance, as regular landlord policies may not cover company lets. This may bring extra costs for you.
Considerations for Tenants
If you live in a company let as an employee, your rights might be very different from a normal private tenant. Company lets are not always assured shorthold tenancies, so you may have less security and fewer protections if things go wrong.
You should check who is responsible for maintenance and repairs, as this can differ from normal renting. Sometimes the company must fix problems, while other times you need to speak directly with the landlord. You might also need to move out quickly if your job changes or you stop working for the company.
Double-check your contract for rules about guests, pets, and use of the property. Company lets often have extra conditions set by the business to protect their interests.
Tax Implications and Financial Aspects
When a company lets a property, you will need to handle several financial rules. This includes corporate tax, reporting rental income, and managing specific costs linked to company-owned property.
Corporate Tax Responsibilities
If your company owns and lets property, it must pay Corporation Tax on any profit earned from the property. Profits are worked out by subtracting allowable expenses from rental income. These expenses can include:
- Maintenance and repairs
- Letting agent fees
- Property insurance
- Interest on loans for the property
You are also required to file a Company Tax Return each year, listing all property income and costs. Late or incorrect filing can lead to fines. Any non-UK company that owns and lets property in the UK must also pay UK Corporation Tax.
If you sell the property, the company could face tax on any gain, known as a chargeable gain. The company may be able to use certain allowances to reduce this gain, but the rules are strict.
Impact on Rental Income
Your company’s property income is treated differently than personal rental income. Instead of Self Assessment, all rental profits must go through the company’s accounts. This means:
- Rental income is taxed at the Corporation Tax rate
- Losses can be carried forward to offset future profits, but not set against your personal income
Below is a table comparing key differences:
| Company-Let Property | Personally-Let Property | |
|---|---|---|
| Tax Return | Company Tax Return | Self Assessment |
| Tax Rate | Corporation Tax | Income Tax |
| Loss Relief | Company only | Across personal income |
If you take rental profits out of the company (for example, as a dividend), you may face further personal taxes. Always record all money your company receives from tenants and keep receipts for any costs paid for the property.
Frequently Asked Questions
You need to know the main rules, who can be a tenant, and what your company’s responsibilities are. These details help you avoid legal problems and manage the property well.
What are the typical terms included in a company let agreement?
A company let agreement usually sets out the length of the tenancy, the rent amount, and when rent should be paid.
It names the company as the tenant, not an individual, and often covers details about deposit, use of the property, and how to end the tenancy.
How does a company let differ from a standard residential tenancy?
A company let is between a landlord and a company, not private individuals.
The agreement is not an Assured Shorthold Tenancy (AST), so you do not have the same rights and protections as a private tenant.
Rules like deposit protection and eviction notices may not apply in the same way.
What responsibilities does a company have when entering a company let agreement?
You must pay rent on time, look after the property, and follow any rules in the agreement.
You are responsible for making sure anyone living in the property follows the terms as well.
You may also need to handle council tax and utilities unless stated otherwise.
Which are the eligible entities to enter a company let and who qualifies as a tenant?
Usually, limited companies, public companies, and sometimes partnerships can sign a company let.
The tenant in this case is the named company. Employees allowed by the company can live in the property, but the agreement is between the landlord and the business.
What legal considerations should be taken into account for company lets in the UK?
You must check if the agreement follows contract law, not housing law such as the Housing Act 1988.
You should also consider liability, responsibilities for repairs, and who pays for bills. Legal advice can help you make sure your agreement is set up correctly.
How is a company let property managed, and who handles maintenance issues?
Management may be handled by a letting agent or the landlord, as stated in the agreement.
You need to report maintenance issues quickly, and the landlord or agent is usually responsible for repairs.
You may have to keep the property in good order during the tenancy.