What are corporate lets?
A corporate let, also known as a company let, is a type of tenancy where a company takes on a residential tenancy agreement as the tenant, rather than an individual. A company employee then occupies the premises as a licensee of the tenant.
A corporate tenant is someone who has relocated to an area for work, and whose rent is paid for by the company which employs them. The company pays the rent and is responsible for all the other obligations which usually fall to the tenant. Utility bills and council tax for example.
Businesses will use the property they let as transit accommodation for employees who are relocating to the area or to house employees who will temporarily be in the area working on a one-off project.
What kind of properties are companies looking for?
Typically, they are looking for high-quality furnished properties in the right location. The property needs to be ready to move into and equipped with high-quality appliances, fixtures and fittings.
Corporate clients insist on high standards. The décor must be immaculate and the property should have quality flooring and soft furnishings. Appliances must be modern and in excellent condition. A dishwasher, washer dryer and microwave should be included along with the obvious essentials such as fridge, freezer and oven. Remember everyday items for the kitchen. These should include cutlery, crockery, pans and cooking utensils.
A big screen TV along with satellite channels is desirable. And every corporate tenant will insist on reliable broadband.
The location of the property is also important. Preferably it will be within easy reach of the tenant’s business premises. But it should certainly have good transport links and be in a desirable neighbourhood. Convenient shops and leisure facilities will be a big plus.
PROS: Why landlords love the corporate sector
There is a lot to like. The obvious attraction is that corporate lets will command a higher rent than other sectors. Companies expect and are happy to pay a premium for quality accommodation. Another plus point is that companies will often want to sign a long-term agreement of up to three years. This, of course, does wonders for a landlord’s cash flow.
Demand for corporate lets is growing all the time. Especially in the major urban areas such as London and Manchester. But the corporate sector is strong right across the country. And companies are looking for all kinds of properties from apartments to family houses.
This all sounds great. But of course, there has to be a downside too.
CONS: The issues with corporate lets
The immediate concern is the high standard of accommodation a corporate tenant will typically require. Keeping the property in tip-top condition takes a lot of time and effort. It’s something which some landlords aren’t prepared to commit too. Another downside is the cost of outfitting the property. It’s more expensive to furnish a corporate let than a property aimed at the general private sector.
Another negative is that some companies can be hard to deal with and all will be very demanding. They will probably insist on an early break clause in the contract which could lead to cash flow issues. The very short-term nature of corporate lets can also lead to the property being empty for periods of time. Again this can lead to interruptions in the cash flow.
Prompt attention to repairs is essential and most companies will insist on a 24-hour contact. Landlord’s who don’t have the time or resources to be constantly on call may not be suited to the corporate market. Companies may also insist on the deposit being held by a third party (no deposit protection scheme ) with corporate lets) and though some may pay the full rent in advance some large corporations can be extremely slow in paying anything. This isn’t ideal for any landlord.
The tenants generally tend to do not take care of the property keeping it clean and tidy being in a service apartment.
The last important topic is the several tenants moving-in and out, making the landlords in trouble against the lease regulations, property company and the related building insurance.
With the company lets you will never know who will be living inside.
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