Corporate Let vs Individual Tenancy: What Companies Need to Know

When arranging accommodation for relocated staff in London, one of the first decisions is whether to hold the tenancy as a company or in the employee's name. This article sets out the key differences between a corporate let and an individual tenancy, and covers recent legislative changes that affect how advance rent can be handled.

Legislative update — Renters' Rights Act 2025
From 1 May 2026, new individual tenancies will be governed as Assured Periodic Tenancies (APT) rather than Assured Shorthold Tenancies (AST). This article uses the term AST throughout for clarity, but the new framework applies to all tenancies signed on or after that date.

How the Two Contract Types Differ

A corporate let is an arrangement in which the company itself is the named tenant, and the employee occupies the property as a licensee. An individual tenancy — governed in England by the Housing Act 1988 as an Assured Shorthold Tenancy — places the employee directly in the role of tenant.

The two structures carry different legal obligations, protections, and practical implications.

Note
Corporate lets fall outside the scope of the Housing Act 1988, which applies only to individuals (s.1). An AST cannot be used where the tenant is a company.

Practical Considerations for Corporate Lets

Advantages

• Staff continuity
  The company retains the tenancy when an employee is rotated or repatriated, avoiding the need to renegotiate a new agreement each time.

• Clear expense treatment
  Rent paid directly by the company can be managed as a business expense, separate from employee payroll.

• Landlord confidence
  Some landlords view established corporate tenants as lower credit risk, which can support access to higher-quality properties.

Points to Consider

• No consumer protection
  Protections available under consumer contract legislation do not extend to corporate tenants.

• Limited rent challenge rights
  Companies have no statutory mechanism to contest rent increases equivalent to that available to individual tenants. Renewal terms depend entirely on what is negotiated in the contract.

• Bespoke contract required
  Standard AST forms cannot be used for corporate lets. Landlords or agents will typically produce their own agreement, which warrants careful review.

• Deposit protection does not apply
  The statutory deposit protection obligation under the Housing Act 2004 covers individual tenancies only. Deposit return terms for corporate lets should be clearly defined in the contract.

Renters' Rights Act 2025: Changes to Advance Rent

The Renters' Rights Act 2025 received Royal Assent on 27 October 2025. Its main provisions take effect from 1 May 2026 and significantly restrict the practice of requiring multiple months' rent in advance under individual tenancies.

Three Stages of the New Advance Rent Rules

What This Means in Practice

Requiring advance rent as a substitute for a UK-based guarantor — a common arrangement for internationally mobile employees — will no longer be permissible under individual tenancies from 1 May 2026. Landlords and agents who continue the practice face fines of up to £5,000 under the Tenant Fees Act 2019.

The restriction applies only to individual tenancies. Corporate lets remain outside the scope of the Act, and the advance rent rules do not apply to them.

Scope and Exceptions

The new advance rent rules:

• apply to new individual tenancies (APT) signed on or after 1 May 2026;
• do not apply retrospectively to existing agreements signed before that date;
• do not apply to corporate lets;
• do not apply to properties with an annual rent exceeding £100,000.

How Kens Estate Supports Corporate Clients

Kens Estate works with companies managing staff relocations in London, handling both corporate let arrangements and individual tenancies. Services include:

• review and negotiation of corporate let agreements;
• coordinating occupant changes when staff rotate;
• end-to-end support from property search through to move-out;
• liaison with HR and office management teams.

For enquiries about current or upcoming relocations, please get in touch.

020 4506 0270 | 218 Great Portland Street, London W1W 5QP | kensestate.com

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Disclaimer

This article is intended as general information for companies and individuals arranging rental accommodation in London. It does not constitute legal advice. Tenancy law and regulatory guidance may change, and the appropriate contract structure depends on the specific circumstances of each case. For legal interpretation or contract drafting, please seek advice from a qualified legal professional.

Sources

• Housing Act 1988 (s.1) — AST applies to individuals only
• Housing Act 2004 — statutory deposit protection scheme
• Tenant Fees Act 2019 — prohibition on tenant fees and advance rent caps
• Renters' Rights Act 2025 (Royal Assent 27 October 2025; main provisions effective 1 May 2026)
• GOV.UK: Deposit protection schemes and landlords — gov.uk/deposit-protection-schemes-and-landlords
• GOV.UK: How to rent — gov.uk/government/publications/how-to-rent
• Citizens Advice: Using a guarantor — citizensadvice.org.uk/housing/starting-to-rent-from-a-private-landlord/using-a-guarantor/
• Pinsent Masons: The Renters' Rights Act 2025: a guide for private landlords in England — pinsentmasons.com
• MoneyHelper: What the new 2025 Renters' Rights Act means for you — moneyhelper.org.uk