Doing a Company let - risks/benefits/advice pls?

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    Doing a Company let - risks/benefits/advice pls?

    Hi there,

    Please can anyone offer advice on renting a property out on a COMPANY LET for 12 months? An agent I'm using say they have the MoD (Ministry of Defence) as a client and they think they can let my property out to them.

    However it would be under a tenancy which they described as being "outside of the Housing Act" and for 12 months. So it will NOT be an assured shorthold tenancy.

    Has anyone done one of these before and are there any particular risks or benefits to consider?

    It seems the ideal solution to me as it's a reputable tenant, at hopefully a good rent and only one person in the property so less wear and tear.

    One problem would be that I think my mortgage doesn't allow these types of tenancies (even tho it is a buy to let mortgage) - has anyone ever approached a lender for special permission for this type of let and was it forthcoming? Do you think if I say I'm having difficulty getting a tenant and ask for permission for this let the lender (Chelsea) might give permission? Perhaps they would just want to approve the agreement?

    Many thanks for any advice.

    #2
    Hi again,

    Please does anyone have any comments/suggestions re this? I need to make a decision soon whether to go for it and if so will need to approach my mortgage lender for permission.................or has anyone ever just gone ahead in similar circumstances without getting specific permission? It is a buy to let mortgage.

    Thanks.
    Regards,

    Comment


      #3
      The contract would be outside the Housing Act, and therefore not an AST, because the tenant is a company. It will be a contractual tenancy.

      As I see it; the issue is how reputable is the company....you need to get a credit check done and ask for refernces from other customers/suppliers. Only go with a company who has a good track record, not a new start-up, unless you can get a personal guarantee and credit check & refernce the individual.

      Also; provisionally enquire how easy it would be to adjust your BTL mortgage.
      All posts in good faith, but do not rely on them

      * * * * * ** * * * * * * * * * * * *

      You can search the forums here:

      Comment


        #4
        Is it really a company let? Sounds like you would be letting to the MOD, backed by the full faith and credit of the UK Government. I know they call the CIA "the company", but the MOD probably not. May not change the contract form, but can your lender argue successfully that the MOD is actually a company.
        ASSUME NOTHING - QUESTION EVERYTHING!

        Comment


          #5
          Originally posted by Paragon View Post
          Is it really a company let? Sounds like you would be letting to the MOD, backed by the full faith and credit of the UK Government. I know they call the CIA "the company", but the MOD probably not. May not change the contract form, but can your lender argue successfully that the MOD is actually a company.
          MoD is not a company, I agree. However, see s. 1(1)(a) of 1988 Act- "assured tenancy" defined as a residential letting to individual(s), so letting to MoD is outside Act in any event.
          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).

          Comment


            #6
            Originally posted by jeffrey View Post
            MoD is not a company, I agree. However, see s. 1(1)(a) of 1988 Act- "assured tenancy" defined as a residential letting to individual(s), so letting to MoD is outside Act in any event.
            I was actually referring to the second question in the original text. What might the buy to let lender say? If the borrowing agreement specifically states no company lets (which is unknown)- then I would probably think laterally and say "what company - I'm not letting to a company."
            ASSUME NOTHING - QUESTION EVERYTHING!

            Comment


              #7
              I deal with MOD lets and have done for the last 12 years. They do their own contracts from their HO in basingstoke. Their contracts give permission for x times servicemen to live in the property but they are responsible for all bills etc.

              They pay no deposit which all my clients are happy with and they have a local rep who does the check in/check out and there are never any problems regarding dilapidations etc.

              Im sure if your lender was provided with a draft contract from HCR then they would have no problem issuing permission.

              Comment


                #8
                Thanks!

                Hi,

                I just wanted to say "thank you" to everyone who replied above. I hadn't looked back at this thread as the letting was dragging its heels but has finally began getting underway.

                I am dealing with letting agents who described the client to me as "the MoD". I have now received a draft agreement and the position is as Poppy35 says, it is an agreement with a limited company HRC, which is a relocation agent.

                I've posted questions on another thread as I am now coming under pressure to sign up but I'm a bit nervous as I know nothing about company lets.

                I'm nervous because there's no deposit being paid, although the limited company gives a promise to repair any damage. The doom and gloom side of me says what is this ltd co goes under and I am left high and dry! How can I do a company credit check to establish (as best I can) the company's standing and reputation etc? Has anyone had dealings with HRC and could vouch for them?

                I'm also a bit nervous about the form of the agreement as I don't know if it protects me as it should or if I should be seeking any additional clauses be put in to it.

                At the moment it just allows for 1 person to occupy but that person isn't named and the company then has a right to put whoever it likes in if the original person moves on during the term. In practice I've been told I would be given an opportunity to approve any new tenants but this isn't covered in the agreement and I think it should be to give me peace of mind.

                The agreement provides for the company to give 1 month's notice after the first 6 months which seems fair (I can give 2 months' notice after the first four months - not that I plan to!).

                Would anyone be able to recommend any additional clauses or alternatively a good source of company let agreement drawn up from the prospective of the landlord so I could have a look and see what else I might ask to have included?

                Many thanks in advance for any help with this.

                Regards,

                Comment


                  #9
                  If it is a relocation agent, there is a good chance that the tenants will be signing the agreement. The relocation agents usually like to do their own contracts. I would insist on a two month notice from tenants, which is only fair since you have to give two months notice.
                  ASSUME NOTHING - QUESTION EVERYTHING!

                  Comment


                    #10
                    hiya I have replied to your pm as promised. As mentioned on there and for the benefit of others I have dealt with HCR for about 12 years and can honestly say I would recommend them above any other party for a letting. Dont worry about the lack of deposit - they have a local rep who checks the tenant in and out and they are VERY thorough indeed, its just the way they operate.

                    btw they wont sign to a 2 month notice by them.....I have copied you the clauses we have changed on their agreement and they agree to all of these but def wont to a 2 months notice.

                    oh one other thing to mention is they like to change the utility provider as they get a good deal by using one of the main ones on all their properties.
                    Last edited by Poppy35; 03-07-2007, 12:15 PM. Reason: extra wording

                    Comment


                      #11
                      Yes. It turns out to be HCR (not HRC), a large Basingstoke-based company.
                      As a tenant of a company let, it's therefore probably good and reliable.
                      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).

                      Comment


                        #12
                        Thanks

                        Hello,

                        Many, many thanks to everyone but in particular Poppy35 for your really helpful and swift advice. I'm sending you a PM too but just wanted to thank you "publicly" too!

                        I really appreciate the time you took to help and to provide me with extra clauses too - I couldn't have asked for more!

                        I feel a tiny bit of a fool as I looked on the Companies House register to check the company after posting yesterday and saw that they used to be Hambro COuntrywide or something like that which is a huge company I have heard of, so I'm sure they will be absolutely fine. I'm too much of a worrymonger for my own good sometimes.

                        Anyway, many thanks again.

                        Regards,

                        Comment


                          #13
                          you are welcome - yes they used to be called Hambro Countrywide Relocation obviously shortened to HCR and based in Basingstoke with reps all over the country.

                          I dont need to wish you luck as you wont need it!

                          Comment


                            #14
                            Hcr/mod

                            Hi I'm letting out my home for the first time and have been approached by HCR to let my property to them - they are putting pressure on me to agree asap. This forum had some useful advice and I wondered if Poppy35 or investor 68could let me know what additional clauses they included in HCRs contract and their experience of HCR. To my eyes their rental price negotiation looks restrictive, linked to RPI? Also they dont specify any time frame for settling any costs for damage / wear and tear. Any advice would be gratefully received

                            Thanks

                            Comment

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