What type of agreement for a corporate let?

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  • What type of agreement for a corporate let?

    I have a potential tenant who fits my criteria, and I'm quite happy to let my property to her. However she says she needs a corporate let, as it simplifies tax matters as her company (she is a director) can then pay rent and utilities direct. I've spoken to my solicitor who said I can't give a six month assured shorthold tenancy as that's not what it was designed for. He didn't give me any other options, but I've seen other corporate lets advertised on Rightmove. Does anyone have some advice for me (apart from changing my solicitor!) about what type of agreement these should be? It would be a six months let.

    Thanks in anticipation

  • #2
    A tenancy at common law
    The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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    • #3
      Thanks very much!

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      • #4
        Doesn't the rent have to be a minimum of £25000 for a common law tenancy?

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        • #5
          No it doesn't. You're confusing it with AST rules, where a tenant or tenants must be individuals. If you are letting to a company as tenant, even if it is occupied by an individual employee/director etc., then you can't draft an AST as an appropriate agreement.
          The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

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          • #6
            Have a look at the RLA website. They have a "company let" agreement which will give you an idea of what such an agreement should look like for your discussions with your lawyer.

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            • #7
              There is really no such thing as an "assured shorthold tenancy agreement" only "agreements suitable for use where the tenancy may be an assured shorthold". Such agreements are generally suitable for most short term residential tenancies. Where the tenant is a company a few changes need to be made. An obligation on the tenant to reside in the property is obviously not appropriate and the provisions concerning parting with possession or sharing occupation will need looking at.

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              • #8
                Also, might I add (in my crusade in incorrectly labelled tenancies) that a "tenancy at common law" is misleading. All tenancies are subject to the rigours of common law to the extent that position is not modified by statute or by contractual agreement.

                What you mean is a bare contractual tenancy - i.e. one which is not regulated by the various Housing Acts.

                However, bear in mind that the corporate tenant may sublet and that subletting may create a assured shorthold tenancy - so careful drafting of the head tenancy is needed.

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                • #9
                  Originally posted by dominic View Post
                  Also, might I add (in my crusade in incorrectly labelled tenancies) that a "tenancy at common law" is misleading. All tenancies are subject to the rigours of common law to the extent that position is not modified by statute or by contractual agreement.

                  What you mean is a bare contractual tenancy - i.e. one which is not regulated by the various Housing Acts.

                  However, bear in mind that the corporate tenant may sublet and that subletting may create a assured shorthold tenancy - so careful drafting of the head tenancy is needed.
                  Yes. Include in the Head Tenancy an obligation on T [company] to re-impose on subT all of the Head Tenancy's restrictions.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

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