Selective licencing on a BTL residential?

Reply to the comment left by Simon F at 14/07/2023 - 11:23
On the plus side. None of the disadvantages of the AST such as gas safety, electrical safety, arrears issues, responsibility towards the tenants etc. apply.

Reply to the comment left by G Master at 15/07/2023 - 08:43
Certainly nothing wrong with a commercial let in principle - except BTL mortgages usually require AST only on residential property - and yes, has some advantages. But in this case there is an intermediary who doesn't know the basics, and neither prospective tenant nor landlord had the experience to see that directly. So, whilst the owner might need to pay a finder's fee, they would be extremely foolish to let the intermediary have any ongoing involvement.

Reply to the comment left by G Master at 15/07/2023 - 08:43
Sorry that’s totally incorrect!!

All of those items you have listed do still apply.

Reply to the comment left by Simon F at 15/07/2023 - 09:22
If the "intermediary" is not regulated they should not be paid any fees.

That may be true in theory, but in practice, if the landlord wants to know who the mystery business prospective tenant is, then they will need to agree terms of some sort with the intermediary.
Still my overall advice would be to steer clear - it's really fishy in this case that the intermediary and/or prospective tenant are proposing the wrong form of contract, a useless contract that would leave the landlord totally exposed

This is more common than suggested. I specialise in SA and although most of my properties are owned, we also have a few R2R deals where we have a commercial agreement with the landlord. They get a guaranteed rent for 5 years with no hassle whatsoever as we deal with minor maintenance issues, gas & electric checks etc etc.

There is often an Intermediary ( sourcer ) involved wanting a couple of grand cut for finding the deal, that's normal. Basically all they do is find, they're usually pretty clueless whether it's ASTs , or company contracts etc, that's for you to sort.

I've never been asked for a guarantor. If we don't pay, the landlord gets their property back much more easily than with an AST.

If the price is right I'd seriously consider it to be honest, I suspect you'll find it considerably less hassle than managing tenants.

As others above have said, I would be very wary of this transaction.
It does not sound like a typical rent to rent or service accommodation contract, it will be a business tenancy. It will effectively mean that you have lost “control” of your property, but depending on your agreement, and the competence of the company tenant and any managing agent (who so far, has not shown themselves to be competent in suggesting an AST), is likely that you will still retain the liability for all failings of compliance etc and possibly even for recovering vacant possession, should said members of staff not vacate when required.
My suggestion would be to do your due diligence on the company, what the company does, what type of staff it employs and where their normal place of business will be – not at your property - and obtain assurances with regard to obtaining relevant ‘Right to Rent’ for the incoming tenants.
It could be a good arrangement with the right company and the right advisers, but from what you have mentioned so far, it is sounding like a very risky prospect that you may come to regret in the long run.