The rise of corporate tenancies: Why more landlords are looking beyond the Renters' Rights Act

With the introduction of the Renters' Rights Act 2025, landlords across the private rented sector are reassessing how they structure and manage their property portfolios. The reforms represent one of the most significant changes to residential letting in decades, introducing a new framework for assured tenancies and altering the balance between landlord flexibility and tenant protection. Amidst these changes, one option has attracted increasing attention: the corporate tenancy.

Unlike assured tenancies granted to individual occupiers, corporate tenancies generally fall outside the scope of the Renters' Rights Act. For some landlords, this offers the prospect of greater contractual certainty, longer fixed-term arrangements and reduced management obligations.

However, corporate tenancies are not a universal solution. While they can offer significant advantages, they also present a number of legal, practical and lending considerations that should be carefully assessed before any arrangement is put in place.

What is a corporate tenancy?

A corporate tenancy, sometimes referred to as a common law tenancy, is a tenancy granted to a company rather than an individual. Instead of renting directly to the person living in the property, the landlord grants a tenancy to a corporate entity. This may be a housing association, local authority, social housing provider, relocation company or another commercial organisation that provides accommodation.

The corporate tenant will then often permit occupation of the property by individuals under separate tenancy or licence arrangements.

Why are corporate tenancies becoming increasingly popular?

Many landlords have long been attracted to the flexibility that corporate tenancy arrangements can provide. Since the introduction of the Renters' Rights Act 2025, that flexibility has become even more valuable.

Under the new regime, fixed-term assured tenancies have been abolished and all assured tenancies are periodic. The legislation also introduces revised possession procedures, additional compliance obligations, restrictions on rent increases and enhanced protections for tenants.

A tenancy granted to a company is not an assured tenancy for the purposes of section 1(1) of the Housing Act 1988. Consequently, many of the statutory provisions governing assured tenancies do not apply. This has led some landlords to explore corporate tenancy structures as a means of achieving longer-term income certainty, fixed contractual arrangements and, in some cases, a more hands-off approach to property management.

Why corporate tenancies fall outside the Renters' Rights Act

The Renters' Rights Act applies to assured tenancies. For a tenancy to qualify as an assured tenancy under the Housing Act 1988, it must be granted to an individual who occupies the property as their only or principal home, subject to various statutory requirements and exclusions.

A tenancy granted to a company cannot satisfy those criteria. As a result, a tenancy between a landlord and a corporate tenant cannot be an assured tenancy and therefore falls outside the assured tenancy regime and many of the reforms introduced by the Renters' Rights Act. This distinction is becoming increasingly important as landlords assess the long-term impact of the new legislation on their investment strategies.

The benefits of corporate tenancies

Fixed-term arrangements remain possible:

One of the most attractive features of a corporate tenancy is that the parties can still agree a genuine fixed term. Many landlords previously relied upon fixed-term assured shorthold tenancies to provide certainty over rental income and occupation. Those arrangements are no longer available under the new regime. Corporate tenancies, however, can still be granted typically for terms of three or five years and may include break clauses where appropriate. For landlords seeking predictable rental income and greater contractual certainty, this can be particularly appealing.

Guaranteed rent arrangements:

Many corporate tenancy arrangements involve housing associations, local authorities or specialist accommodation providers that agree to pay rent regardless of whether the property is occupied.

For landlords, this can provide several attractive benefits, including consistent rental income, simplified rent collection and reduced day-to-day management responsibilities. Rather than dealing directly with individual occupiers, the landlord's contractual relationship is with a single corporate tenant.

However, guaranteed rent should never be viewed in isolation. Landlords should carefully consider the financial strength of the corporate tenant, the proposed use of the property and the implications of any sub-tenancy arrangements before entering into an agreement.

The risks and considerations

While the benefits can be attractive, landlords should not assume that a corporate tenancy is a risk-free alternative. These arrangements bring their own legal and practical considerations, particularly where mortgage lenders are involved.

Mortgage lender issues

A key consideration is the position of any mortgage lender with an interest in the property.

Before consenting to a corporate tenancy, lenders will typically wish to review both the tenancy agreement and any proposed sub-tenancy arrangements to ensure they comply with lending requirements and do not adversely affect the value or enforceability of their security.

Where a property is subject to a conventional residential tenancy, lenders can often rely on statutory possession mechanisms provided by the Housing Act 1988. Those protections may not be available in the same way where a corporate tenancy structure is used.

In particular, Ground 2 of Schedule 2 to the Housing Act 1988, which lenders frequently rely upon in possession proceedings, does not operate in the same manner under a corporate tenancy arrangement. As a result, recovering possession may prove more complex.

For this reason, lenders commonly require corporate tenancy agreements to be limited to terms of three or five years and to contain appropriately drafted break clauses. These provisions can help ensure that possession can be recovered if enforcement action becomes necessary during the contractual term.

Repair obligations

Unlike many residential tenancy arrangements, corporate tenancies do not automatically place the same repairing obligations on the landlord. The parties must therefore clearly address responsibility for repairs and maintenance within the tenancy agreement itself. Failing to do so can create uncertainty, increase risk and lead to disputes between the parties.

Before entering into any arrangement, landlords should ensure that repairing responsibilities are clearly defined and properly documented.

Looking bneyond the corporate tenant

One of the most important considerations is often not the corporate tenant itself, but the identity and status of the individuals who ultimately occupy the property. A common arrangement may involve:

1. The property owner granting a tenancy to a housing association.

2. The housing association then granting occupation rights to individuals or families.

Although the landlord's direct contractual relationship exists only with the housing association, the practical and legal implications often extend beyond that relationship.

For example, if possession becomes necessary in the future, consideration will need to be given not only to the corporate tenant but also to the rights of any occupiers residing at the property. From a lender's perspective, the position of those occupiers may be just as important as the terms of the corporate tenancy itself.

In some circumstances, a borrower may effectively find themselves becoming the direct landlord of occupiers they have never met and with whom they have had no ongoing relationship. Depending on the circumstances, those occupiers may also benefit from statutory protections that require careful consideration. Landlords should therefore look beyond the headline benefits of the arrangement and fully understand how the property will be occupied throughout the term.

Why due diligence matters

Before entering into a corporate tenancy, landlords should understand:

• Who the corporate tenant is;

• how the property will be used;

• who the ultimate occupiers will be;

• whether any sub-tenancies or licences will be granted;

• whether the arrangement satisfies lender requirements; and

• what happens if the tenancy needs to be terminated.

A corporate tenancy may appear straightforward at first glance, but the underlying structure can have significant legal and practical consequences. Taking the time to carry out appropriate due diligence at the outset can help avoid costly issues further down the line.

Conclusion

Corporate tenancies are becoming an increasingly attractive option for landlords in the wake of the Renters' Rights Act reforms. The ability to agree genuine fixed-term arrangements, secure potentially guaranteed rental income and operate outside many aspects of the assured tenancy regime offers a level of flexibility that some investors may find appealing.

However, corporate tenancies are not simply a mechanism for avoiding regulation. They create a different legal framework, one that brings its own risks, responsibilities and lending considerations. The identity of the corporate tenant, the position of any ultimate occupiers and the requirements of a lender can all have a significant impact on whether the arrangement achieves its intended purpose.

A well-structured corporate tenancy can provide certainty and commercial benefits for all parties involved. Equally, a poorly considered arrangement can create unexpected legal and practical difficulties.

For that reason, landlords should approach corporate tenancy arrangements with the same diligence they would apply to any significant property investment decision. Obtaining specialist legal advice at an early stage can help ensure that the structure delivers the intended commercial outcome while protecting both the landlord's interests and the lender's security.

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