Relocation company requesting signed AST

I would firstly clarify exactly who the company plans to place in the property – are they its employees or their relocation clients’ employees? This will guide you to the correct contract (either way its not an AST!) that is required.

I suspect you might find they want a number of rooms for immigrant or temporary workers that are not their employees. If so, expect wear and tear and make sure you take a big damage deposit and have a full check in inventory performed by a 3rd party. The contract needs to define who is responsible for the HMO management regs and also the imminent “right to rent” checks too.

Its concerning that they proposed an AST for the whole property in the full knowledge they plan to let by the room…..either they are not UK law savvy or are not legitimate.

For what its worth, my HMO finance DOES preclude leasing the whole property – I am limited to creating ASTs and not creating any other type of 3rd party interest in the property without the lender giving consent.

You have the main points already answered here – a company cannot be the tenant of an AST as it is not an ‘individual’ – this is a fundamental requirement for the creation of an AST as set out in s1(a) of the Housing Act 1988.

A residential company let should only be created if the property is let for the company to use for its own directors and staff. If the agreement is for subletting to other people it will be a commercial tenancy. So you need to find out who will be living there.

I think you need to be very careful and, as everyone else has said, do a lot of checking and due diligence. Once a tenant is in, it can take many months to get them out again.

Thank you for all of your responses. I will have to ask a few more questions before deciding what to do next.

Well, More and more companies are asking their employees to make a move, and more and more employees want to make that move. . .