Landlord has asked me to set up a limited company for lease

saajan_12

For the tenant this is a non starter - firstly you'd lose the existing protections of a residential AST, eg no eviction without court, tribunals for rent increases, etc etc let alone the new renter reforms. Secondly its a ridiculous setup - you pay the new company (which pays the LL) to provide you with accommodation, with 0 profit, and incur the costs of filing company accounts.. 

For the LL its a poorly thought out plan but I do understand the sentiment if he's afraid of the renter reforms coming for ASTs. Its often dangerous to know a little but not a lot. However illogical, he may try to serve you notice if you refuse. 

NOT to say you should change your plan, but just so that you're warned incase you need to start looking for alternatives. 

daveyjp

When you say he want 'us' to set up a limited company does he mean you and him become directors of a new company and you then rent the property off the Ltd company?

Regardless whatever he is suggesting is completely bonkers.

Smilyoctopus

caprikid1 said:

I have never heard of such a request.

Are you sure the landlord is not setting up a company and asking you to sign with the new company ? That would be more logical 

No, it's definitely us that is being asked to set up a limited company (the landlord is already operating through a company)

Smilyoctopus

Thanks for the replies, I appreciate it. We thought it was a very odd request.

Smilyoctopus

daveyjp said:

When you say he want 'us' to set up a limited company does he mean you and him become directors of a new company and you then rent the property off the Ltd company?

Regardless whatever he is suggesting is completely bonkers.

No, he means me and my husband.

FlorayG

It's not just odd it's utterly bizarre and I agree the landlord is trying to 'get round' the new Renter's Rights bill. If he won't give you a new AST then just carry on renting on a periodic tenancy - it would still take him six months and lot of hassle to get you to leave if he doesn't like that

Hoenir

FlorayG said:

It's not just odd it's utterly bizarre and I agree the landlord is trying to 'get round' the new Renter's Rights bill.

Probably some dreamt up wheeze that's doing the rounds on social media. Hence the lack of response to intelligent questions. 

Bookworm105

Hoenir said:

FlorayG said:

It's not just odd it's utterly bizarre and I agree the landlord is trying to 'get round' the new Renter's Rights bill.

Probably some dreamt up wheeze that's doing the rounds on social media. Hence the lack of response to intelligent questions. 

indeed, some spectacular repercussions 
- lovely benefit in kind income tax exposure for company owner in having their own accommodation's rent paid for them by their own company
- company has no income except payments made to it by its own director/owner so all other company expenditure disallowed for tax purposes as the company is not trading.

theartfullodger

Think if tenant is a company then I think tenancy cannot be (may not be, legally impossible to be ) an AST.  Easier (depending on wording) to evict.

Doubt landlord understands. Sounds stupid (I am also a landlord...)

Don't.  

caprikid1

"Warning to letting agents - you can be prosecuted for giving sham licenses to tenants"

Reading around this, I think whatever tricks the landlord plays you will still potentially have an AST. I am not sure the courts would take well to this sort of shanigans.

I suspect any new tenant would run a mile !. Under no circumstances agree to this as the costs to fight such stupidity could be costly.