As the Renters’ Rights Act implementation date approaches, we are proactively preparing for the transition. We are currently refining our processes and auditing our contracts to ensure we remain fully compliant, providing the seamless protection our clients expect and the high standard of care our tenants deserve. This represents the most significant legislative shift in a generation, and as an agency defined by service, we are ensuring we stay ahead of the curve.
However, elsewhere in the industry, we are seeing a worrying trend emerge... one that we feel duty-bound to call out.
The "Company Let" Trap: A Public Service Announcement
We recently came across an online post asking for advice. A London tenant was pressured by an agent to set up a sham Limited Company just to sign a lease. The agent claimed this was "necessary" due to new selling rules in the Renters’ Rights Act, but it was actually a trick to strip the tenant of their legal protections. Thankfully, the tenant saw through the ruse, pulled out of the deal, and reported the agency to the council.
What many tenants might not realise is that a "Company Let" is not afforded the same rights as a traditional Assured Shorthold Tenancy (or soon to be Assured Periodic Tenancy once fixed term contracts are no longer permitted).
This is not "clever" property management. It is a sham arrangement that puts tenants - and landlords - at significant risk.
Why You Should Run From This Proposal
If an agent suggests you "incorporate" just to sign a lease, here is what they aren't telling you:
- You Lose Your Rights: By renting through a company, you are no longer a "tenant" in the eyes of the Housing Act. You become a licensee of your own company.
- The Admin Nightmare: Running a Limited Company isn't a "paperwork-only" exercise. You’ll have legal obligations to file annual accounts and confirmation statements with Companies House. Fail to do so, and you face personal fines and criminal prosecution (which the letting agent certainly won't get involved with).
- The "Sham" Factor: Courts are not easily fooled. Legal experts, including those at the Landlords Guild, have warned that if a company is set up solely to circumvent the law, a judge can "pierce the corporate veil," declare the arrangement a sham, and potentially leave both parties in a legal minefield.
What Rights Will You Lose?
The following is a non-exhaustive list of the rights a resident doesn't have under a company agreement:
- Protection from "No-Fault" Evictions: No access to the ban on Section 21 evictions; landlords can end the lease without a statutory reason.
- The 12-Month "Protected Period": No legal shield preventing the landlord from evicting you to sell or move in during the first year.
- Rent Increase Limits: No right to limit increases to once per year or challenge "above-market" hikes at a Tribunal.
- Mandatory Deposit Protection: No legal requirement for the landlord to use a government-backed protection scheme (DPS/TDS).
- Notice Period Security: No statutory minimum of two months' notice for tenants or four months' notice for most landlord possession grounds.
- Anti-Discrimination Protections: No statutory right to be protected from "No DSS" or "No Children" policies.
- Right to Request Pets: No legal framework requiring a landlord to "reasonably consider" a request for a pet.
- The Decent Homes Standard: No automatic right to the new safety and repair standards (including Awaab's Law) introduced by the 2025 reforms.
- Ombudsman Access: No right to use the new Private Rented Sector Landlord Ombudsman to resolve disputes for free.
What this means, essentially, is that an unscrupulous landlord could hit you with an overnight rent hike you can’t challenge, decide to evict you for no reason with almost no notice, or simply walk away with your deposit because it isn't legally protected in a government scheme. Essentially, you're trading your hard-earned legal rights for a private contract that favors the landlord, leaving you with zero backup if they decide to treat you unfairly or neglect the property.
Our Stance: Service First, Shortcuts Never
Is the Renters' Rights Act bringing big changes to the private rental sector? Yes, undoubtedly. Are there people out there trying to scheme their way out of the responsibilties that are coming their way? Of course, but this is nothing new - there have always been bad actors trying to take shortcuts and operate outside of best practice or the law.
At base, we focus on providing a fully compliant service that benefits all our clients, owners and residents alike; protecting them by ensuring all tenancies are legally robust and ethically sound.
The Renters’ Rights Act is a major shift for the industry, but it isn't something to be feared or dodged through "loopholes." Good properties and great landlords will always thrive in a fair market.
If you are a tenant being asked to jump through bizarre corporate hoops, or a landlord being advised to use "creative" contracts to avoid the new law, our advice is simple: Don't touch it with a barge-pole.
We’re here to provide a higher standard of service - the kind that doesn't need a loophole to work.
