Question

Letting to a company to sub-let to employees – pluses and minuses

by | 6 Apr 2017

What are the key positives and negatives of letting to a company so they can sub-let to employees (care in the community workers)?

Answer

2 Comments

  1. guildy

    This type of letting shouldn’t be too much to worry about.

    Advantages

    Not an AST so no deposit protection nor how to rent guide (EPC and gas safety still applicable).

    Disadvantages

    A different procedure for possession which is less common and as a result less understood by the courts. But, with careful explanation shouldn’t be a problem (and hopefully not needed anyway)!

    HMO

    Regardless of whether AST or not, any property with more than 2 people who are not all related to one another is a HMO and as such the HMO management regulations will apply.

    If the property is 3 storeys AND 5 or more people living there, a mandatory HMO licence will be required.

    If the property is in an area of additional licensing, a licence would be needed regardless of storeys (as long as more than 2 people sharing). If property is in an area of selective licensing, a licence will always be needed.

    If it is a HMO, you will need to carefully decide between both parties who is to be the “manager” of the building for the purposes of complying with all the regulations including additional fire precautions and five yearly electrical checks for example. In this type of scenario, it is most likely you who will be the manager for this purpose because the company won’t be receiving rents from the occupiers.

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