I have recently been contacted by an local estate agent who claimed they have potential corporate clients who might be interested to pay higher rent. Company he mentioned are all large international companies like BP, Heathrow. I heard about the rent to rent scams and wondering if this could be a scam? What should I check?
There isnt really much you can check in advance, but even if its not a scam, there are other risks to corporate lets. You would really need a specialist lawyer to check over the contract as it would not be a standard AST. Important things to check include the termination and forfeiture clauses, no right for use by non company employees and a personal guarantee by a director as the company itself will likely have limited guarantee.
I wouldnt.
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Google ‘protect yourself from fraud’ and look at fca site advice
Thank whether it sounds too good to be true - if I t does it probably is
You can check estate agents credentials - what professional association(s)/membership they have. Ask what company, website etc would be arranging the scheme and try to check their credentials
You can ask agent why they called you/what made them think your properties would be suitable and how they found out about your portfolio- if eg they simply randomly call anyone who is advertising its not a good sign is it
Ask for contact details (name role/dept tel ) at the potential clients named and check these people do exist (linkedin) and contact them independently through the co switchboard (NOT the tel provided by agent ) and verify the agent does arrange rent to rent on the company’s behalf (or with their HR function)
Ask if you have control over which companies’ employees will use your property (if not agent may have just named the reputable ones as part of the sell tactics and I’d avoid) and if you still can reference the occupants and have a veto if you feel they will be unsuitable or what minimum criteria will be used to screen and choose occupants
Ask what the break/cancelation process/costs are
You can think what sort of rent you want, and what sort of control and level of hands on diy Landlord you want (are you comparing with full mgt by a lettings agency or being a diy LL)
You can think whether you accept cold call offers in other parts of your financial life (mortgage, jobs etc)
You can Google ‘pros and cons of rent to rent’ - there is lots of advice out there eg a long page by MyDeposits of things to look out for etc
If you are a leaseholder rent to rent likely also needs freeholder permission
You need to check with your mortgage provider if it’s even allowed under your mortgage Ditto the insurance - You may need specialist insurance instead
You may need an hmo license or planning permission for change in use or to protect deposit
You can ask how many other LLs the agent has using this scheme with these particular companies and ask to speak to at least 5 who have been doing it for over a year
You can call other companies/agencies offering rent to rent and see what they offer by comparison - again if this agent seems to be offering way better than others it is more likely to be a scam or have some other catch
Remember it’s a bigger risk the agent has no duty to act on your behalf and the company you rent to has no interest in getting repairs done well rather than patching, you will have no control who is in your property (need to specify how many and whether pets children etc)and it’s likely to be a different process should you want or need to end the contract
Good luck