My tenant wants to rent the property under a company name
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I have a prospective tenant who wants to put the lease in the name of his company. Are there extra risks if the lease is drawn up this way? Does he as Director still complete an Application for Tenancy under his name? Should I include a clause in the Lease about him guaranteeing the lease as Director of the Company? If so, what should the wording be? Your advice much appreciated. John
Are there extra risks if the tenant is a Company?
I would not say 'Extra Risks' as the rules are still the same it's just you take action against a company and not the person. So if the company goes bankrupt you've got no hope in getting the rent. So that's probably the 'extra risk' that I can see.
Does he as Director still complete an Application for Tenancy under his name?
Yes the director or manager of the company would apply for the property on behalf of the company (and the company is the one as the 'tenant' on the lease). However you still want to know who is living in the property. So you may need a separate application from the person/people moving into the property (particularly if their not the director of the company). Regardless you want 100 points of ID from the people moving in.
Should I include a clause in the Lease about him guaranteeing the lease as Director of the Company? If so, what should the wording be?
This is not a very common scenario and trying to search for information on this on the web is pretty scarce. However as the company would go on the lease this is an agreement between you and the company. So that's them guaranteeing they'll abid by the terms of the lease (paying the rent and looking after the house etc).
What I would do is put in the special conditions exactly who is moving into the property (Name, age DOB) and if there are any changes to the occupants in the future they must inform you as the owner prior to them moving in by way of applying for the property through an application form. (this is so you know who is actually living in your property).
When you approve tenants usually you must check two things:
- They can pay the rent
- Will they look after the house
Typically a 'company' does not have rental experience so proving the company would look after the house is very difficult hence the reason why I want applications from the adults also moving in as well.
Good luck.
Michael