What sort of tenancy agreement for this odd situation?

You can’t let to a company on an AST.
Use a Company agreement this way the company is the tenant and the people living in the property are occupiers allowing the company to move their staff to move in & out.

As you must insist on a personal guarantor for the rent unless it’s a major PLC.

It does sound rather complicated. What I would do is get the Company Director to sign an AST and then say that to be able to live in the house he will need to pay the 12 month’s rent upfront. Once the rent has been paid in full he can let his colleagues stay whenever they need to. If you don’t receive all 12 month’s rent upfront I would avoid and find another tenant.

Personally I think what the “business” is may also be of significance. Is the the property to become the primary workplace of these 3 individuals? What work is to be done there? Are work materials, papers and tools to be stored on your premises? Will it become the registered address of the company. Will clients visit them there? How will this effect neighbours/parking etc

Or is the company maintaining a registered address elsewhere – and looking simply for cheaper accomodation than a hotel on a 12 month contact where they can cook etc.while doing all their work elsewhere.

I think there is more than just housing law at stake, if a boss applies any duress or pressure to get his employees to share in underwriting his rent for his permanent residence (if their primary home is elsewhere). I would not want to be part of that sort of irregular employment practice !

I think you probably need to assess your own willingness to let based on your assessment of affordability reliability and ability of the primary tenant to pay the rent alone.

And ask what happens if the business falters, or the boss lays off or sacks the secondary tenants.

There could be ways of doing this if 12 months rent is paid up front and you do your research, or you rent to the company – but you need to be sure this is a really a residential rather than commercial let …

Reply to the comment left by Mark Smith at 19/09/2024 – 10:07
I agree. Very important to find out if this is a corporate let or if the Company Director just needs somewhere to live for twelve months and is going to pay the rent himself.

I wouldnt do a company let, I’d do a single let AST to the Director in his personal capacity and give him permission to have guests but not to take permanent lodgers or sublet rooms.

Have you investigated letting not to the occupants but to the company itself?

You need to be aware that this could be an HMO situation here. I’d be inclined to find more straight forward tenants and ditch this application.

You need a Company Let agreement with the Ltd Company being the party let to. This is not an AST but works in the same was as a “simple” contract even if you use similar clauses. Also beneficial as no notice period, other than what is written in the contract, is required AND the contract cannot fall under the RRB (Act) should it come into force.

Croydon are not allowed to re-introduce a Selective Licensing scheme. They did have one for 5 years BUT after Treasury audit end/mid-term the monies raised were not accountable for. To this day no-one knows where the monies went.

Since one of the potential tenants will be living there full-time, you should probably go with AST. It allows for everyone to be on the agreement, making them equally responsible for the rent. Just be mindful that having part-time tenants might complicate things a bit. If it starts feeling too tricky, it might be worth looking for other tenants who fit a more straightforward setup. Good luck with it!

Thank you to all those super-helpful people who offered their advice/thoughts.  I eventually heard back from Croydon council who insist it will be a HMO as “The property is intended to house three occupants at any given time; therefore, it is an HMO.”  And therefore (as it’s an Article 4 area) we would have to apply for planning permission.  We’re pretty gutted as they would have been great tenants (their in the building trade).