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I have learned a lot from you guys who are experienced and knowledgeable.I purchased a 4 bed property last week and got lots interesting from Openrent. This morning a company director viewed the house and wanted to take it straightaway, she wanted to rent it by company and for her employees to stay temporarily as they signed a contract here.Sounds good as it may well be 4-5 years long term. My question is: how to do referencing check for a company? What type of contracts to sign? By the way, the property is under my Ltd company. I’d like to hear advice or experience from anyone. Many thanks. Helenmany thanks
You need to do Due Diligence on the individual and their company, it could well be someone fresh off a property course looking for a R2R or R2SA opportunity.Firstly do a search on Companies House/DueDil and see how long the business has been established for and the nature of the business, if relatively new there may be no accounts available or history to be able to reference check.
It may well be for the employees of her company, but I think more likely will be above.
100%. It could be genuine or a BS'er fresh from a R2R course.
Obtain a personal guarantee. Be careful on how many can occupy and restrict to employees earning over say £x with an certain type of job. You wish to limit damage or illegal letting.
And of course check out the company and directors' history - DueDil or Companies House.
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
I agree, you need to check out the company as well as the individuals involved. I recommend that you make sure the company directors are guarantors in their personal capacity. If you let to the company alone and it goes wrong, you will have no comeback on the individuals involved. You will need to use a company tenancy agreement and proper guarantor form - do not try to amend a standard AST. Perhaps you should speak to a decent local agent to steer you through this.
Extreme caution urged.If it sounds too good to be true in property, it is, every time, without fail, no exceptions. Ever.As others have already suggested, this is almost certainly someone looking to undertake Rent to Rent activity in your property, and possibly even serviced accommodation. They are told to tell naive landlords that it is a company let, as that makes it sound more official and believable.An AST would not be suitable for this situation, you need a commercial agreement.If I were in your shoes, I would not accept this application. You will have no idea of who is using your property and no direct commercial relationships with them. For this reason, it can get very messy.I would recommend letting to a single occupier who you can reference via the usual channels and who you can have a direct commercial relationship with.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thanks for all your advice, very helpful. The company provides carers and signed contracts with the County council - I have looked at the emails from council. The carers travels from home and need to stay here from time to time. The Openrent advised me to sign contract with director and use company as guarantor, but the further question is: if 4 employees stay, does it count as HMO? Do I have to reference all of them?
I have not decided to let to this company yet, just interesting to find out all these workarounds.
anybody done this before? Thanks
HMO rules are different in different area's you need to check with your local council... Quick google search "HMO name of council area" should lead you in the right direction.
The rules of whether a property is an HMO are specified on a national level for England, Wales, Scotland & Northern Ireland.
In England and Wales, a house is an HMO if it has 3 or more people living in 2 or more households. I think it is the same for NI and I've never check the definition in Scotland (but I would assume it is the same thing). If your property is an HMO then you need to comply with all the national regulations and laws regarding HMOs and their management.
You appear to have confused HMO and licensable HMO. Any HMO with 5 or more people in England or 5 or more people over 3 or more storeys in Wales must have a licence. Councils can specify additional licensing areas for other HMOs.
if 4 employees stay, does it count as HMO?
Its very unlikely to be an HMO, as you will have people staying there, not living there. Its not just the numbers, its how the property is used. The housing Act 2004 states:
the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259)
If the company mainly employs migrant workers and is using the property to house them between assignments then S259 would be relevant although this isn't usual practice in the care industry.
The VOA may consider charging Business Rates if the property has more than 6 bed spaces which may also result in commercial rates for utilities and waste. The Planning Department may also consider a material change of use from C3 to C1. Hopefully someone with experience can give advice/opinions on these two aspects.
Careers = minimum wage staff= big staff turnover. Possibly = staff staying at your place with no contract no where else to go and a “ it’s not my fault, take it up with my ex boss, or the council, or Donald Trump, just stop harassing me” attitude.