Company lets are common in several markets: large employers housing key workers or project staff; NHS trusts and local authorities housing medical and care workers; property management companies taking a guaranteed rent arrangement; universities accommodating visiting academics. In all these cases, the legal tenant is the institution — and the individual occupiers access the property through a sublicence or sub-tenancy from the institutional tenant, not directly through the landlord.
For landlords, the company let offers significant advantages: a commercially sophisticated counterparty who typically pays rent reliably; flexibility in setting the terms of the tenancy agreement without the constraints of residential tenancy law; and no exposure to the Renters' Rights Act 2025 restrictions on possession. However, these advantages come with specific risks — particularly insolvency risk and the absence of statutory safeguards — that must be managed through a well-drafted corporate tenancy agreement.
What is a company let and why the Housing Act 1988 does not apply
The Housing Act 1988 is the statute that creates assured tenancies and assured shorthold tenancies (ASTs). It applies only where several conditions are met — and the tenant being an individual is one of the most fundamental:
- Housing Act 1988 s.1(1) — individual tenant requirement: An assured tenancy exists only where the tenant is an individual (or the tenants are all individuals) and the dwelling-house is let as their only or principal home. A company, LLP, charity, NHS trust, or local authority cannot occupy a property as its only or principal home — so any tenancy to a company is incapable of being an assured tenancy
- Consequence — no statutory framework: Because the tenancy is not an assured tenancy, none of the following apply: Section 21 no-fault eviction (which in any event was abolished by the Renters' Rights Act 2025 from 1 May 2026); Section 8 mandatory and discretionary possession grounds; the Renters' Rights Act 2025 conversion to periodic tenancies; the Tenant Fees Act 2019 prohibition on fees; the Tenancy Deposit Protection scheme (which applies only to ASTs)
- Common law tenancy: The company let is a contract between the landlord and the corporate tenant, governed by the terms of the tenancy agreement and general contractual and property law. The notice period, break clause rights, repair obligations, and permitted use are all determined by what the parties agree in the document — not by statute
- What common law implies where the agreement is silent: Where no express provision is made on notice periods (for example, a periodic company let with no agreed notice clause), common law implies that a periodic tenancy can be ended by a notice equal to the period of the tenancy. A monthly company let with no agreed notice clause requires one month's notice at common law. A yearly company let requires 6 months' notice. These implied terms can be varied expressly in the agreement
Right to Rent, deposit protection, and key clauses in the corporate tenancy agreement
Several compliance requirements that apply automatically to ASTs do not apply to company lets. Understanding which rules apply helps the landlord set up the company let correctly and avoid unnecessary obligations:
- Right to Rent — the corporate tenant itself: The Immigration Act 2014 right-to-rent scheme requires checks on individuals who occupy a property as their only or main home. A company tenant is not an individual occupier and is not subject to right-to-rent checks in its own capacity. However, the individual employees or nominees whom the company accommodates in the property must hold the right to rent as they are occupying as their home. The corporate tenancy agreement should require the corporate tenant to carry out right-to-rent checks on all occupiers before they move in and to provide evidence to the landlord on request
- Deposit protection — TDP scheme does not apply: The statutory Tenancy Deposit Protection scheme under the Housing Act 2004 applies only to ASTs. A deposit taken under a company let does not need to be protected in a DPS, TDS, or MyDeposits account. The deposit is held contractually. There is no statutory 5-week cap (the Tenant Fees Act 2019 cap applies only to ASTs). Landlords can negotiate any deposit amount that the corporate tenant accepts. Return of the deposit is governed entirely by the tenancy agreement
- Director's personal guarantee: For company lets with small or newly incorporated company tenants, always require a personal guarantee from the director(s). If the company enters administration or liquidation, the landlord's claim for unpaid rent is as an unsecured creditor — typically irrecoverable in insolvency. The director's personal guarantee creates a direct claim against the individual. For larger institutional tenants (NHS trusts, local authorities, PLCs), a parent company guarantee or institutional guarantee may be appropriate instead
- Key clauses in the corporate tenancy agreement: Permitted use (accommodation for named or nominated employees/officers of the corporate tenant only, with the landlord's right of approval over occupiers); prohibition on subletting without written consent; repair and reinstatement obligations (the corporate tenant to return the property in the same condition as received, fair wear and tear excepted); access rights for inspection; rent review (if any — there is no Section 13 mechanism, so this is purely contractual); break clause provisions (on what notice and subject to what conditions either party may break); deposit terms and conditions for return
Ending a company let — notice, break clauses, and possession
Because a company let is not an assured tenancy, the landlord's route to ending the tenancy and recovering possession depends on the contractual terms agreed. The statutory possession procedure (Section 8 grounds, possession notices, PCOL) does not apply:
- Fixed-term company let — expiry: At the end of a fixed term, if neither party takes steps, the tenancy continues as a periodic tenancy at common law (period = rent period). To bring the tenancy to an end, either party must give notice (as agreed in the agreement or as implied at common law). There is no equivalent of the Housing Act 1988 s.5 continuation tenancy for ASTs — the corporate fixed term simply ends
- Break clauses — strict compliance required: Many corporate tenancy agreements include break clauses allowing the landlord, the tenant, or both to end the tenancy before the fixed term expiry. Break clauses must be exercised in strict compliance with their terms — the required notice period must be given exactly (not a day short), any conditions (e.g. no rent arrears at the break date, property returned vacant) must be satisfied precisely. Courts interpret break clauses strictly; a failure to comply exactly can mean the break is ineffective and the tenancy continues
- Recovery of possession where tenant refuses to leave: If the corporate tenant refuses to vacate after the contractual notice has expired (or after a break clause has been validly exercised), the landlord must issue a possession claim in the County Court using claim form N1. There is no accelerated possession procedure for company lets (that is available only for ASTs). The landlord must obtain a possession order and enforce it — usually via a county court bailiff or, if transferred to the High Court under s.42 County Courts Act 1984, via a High Court Enforcement Officer
- Mesne profits for holdover: Where the corporate tenant remains in occupation after the contractual notice has expired (holding over without consent), the landlord is entitled to claim mesne profits — a sum equivalent to the open market rental value of the property for the period of unauthorised occupation. Mesne profits can be higher than the contractual rent if market rents have increased
Practical advantages and risks of letting to a corporate tenant
Company lets are favoured by landlords who want rent certainty, commercially sophisticated counterparties, and freedom from the statutory residential tenancy framework. However, specific risks must be understood and contractually mitigated:
- Advantage — no RRA 2025 restriction on possession: The Renters' Rights Act 2025 (in force 1 May 2026) abolishes Section 21 no-fault eviction and restricts possession grounds for ASTs. Company lets are completely unaffected — the landlord retains the full contractual right to end the tenancy on agreed notice. This is a significant advantage for landlords who want flexibility to sell or redevelop
- Advantage — rent certainty and institutional reliability: Corporate tenants — particularly NHS trusts, local authorities, large employers, and institutional guaranteed rent companies — typically pay rent reliably by standing order on the contractual date. Void periods in institutional company lets are lower than with individual tenants, and rent arrears are uncommon
- Advantage — above-market rents possible: Where the corporate tenant needs to house key workers in a location with limited supply (hospital near a major NHS foundation trust, for example), the corporate tenant may accept a premium rent in exchange for the certainty of securing quality accommodation. In high-demand areas, company let rents can exceed open-market AST rents
- Risk — insolvency and unsecured creditor status: If the corporate tenant enters administration, liquidation, or is struck off the register without paying rent, the landlord is an unsecured creditor. Recovery of unsecured debt in insolvency is typically minimal. Always require a director's personal guarantee or parent company guarantee to create a direct contractual claim against an individual or solvent entity
- Risk — wear and tear from multiple occupiers: Where the corporate tenant sub-lets the property to multiple employees or project staff on a rotation basis, the property may experience higher wear and tear than with a single-family long-term occupier. Negotiate a higher deposit, include robust reinstatement obligations, and carry out regular periodic inspections (with appropriate contractual access rights). Consider a mid-term inventory inspection at 6 months
Frequently asked questions
Does the Housing Act 1988 or the Renters' Rights Act 2025 apply to a company let?+
No. The Housing Act 1988 requires the tenant to be an individual — a company, LLP, or other legal entity cannot hold an assured tenancy or AST. As a result, the entire residential tenancy statutory framework does not apply to company lets: no Section 21, no Section 8 grounds, no Renters' Rights Act 2025 restrictions. The tenancy is governed entirely by the contract and common law.
Does the Tenancy Deposit Protection scheme apply to a company let deposit?+
No. The statutory TDP scheme (DPS, TDS, MyDeposits) applies only to assured shorthold tenancies. A company let deposit does not need to be protected in a government-approved scheme. There is also no 5-week cap — the Tenant Fees Act 2019 cap applies only to ASTs. The deposit is held and returned under the contractual terms of the tenancy agreement.
What right-to-rent checks are required for a company let?+
The company itself is not subject to right-to-rent checks. However, individual employees or nominees who occupy the property as their home must hold the right to rent. The corporate tenancy agreement should require the corporate tenant to carry out right-to-rent checks on all occupiers before they move in and to provide evidence to the landlord on request. Failure by the individual occupiers to hold the right to rent can expose the landlord to a civil penalty.
Do I need a director's personal guarantee in a company let?+
For company lets with small or newly incorporated company tenants, a director's personal guarantee is strongly advisable. If the company enters administration or liquidation with rent unpaid, the landlord is an unsecured creditor — typically recovering very little in insolvency. A director's personal guarantee creates a direct contractual claim against the individual director who signed the guarantee. For large institutional tenants (NHS trusts, local authorities, PLCs), a parent company guarantee may be appropriate instead.