There is an energy crisis. And Aberdeen as the energy capital of the UK is playing a key part to solve this crisis. It’s not only the oil and gas industry, it’s also now the renewable energy industry that is bringing more people into Aberdeen. As in the past, when influx of tenants increases, it tends to be led by companies bringing employees and their families to the Granite City.
Then landlords start asking for their properties to be let to an oil company, as if a ‘company let’ was at all times superior to a ‘normal’ ‘Private Residential Tenancy’ (PRT) let. We deal with oil companies on a daily basis, and they are a superb source of tenants. It’s extremely important to note though, that a company let is not necessarily better or worse than a PRT let. Let’s cover the basics.
Private Residential Tenancies
A ‘Private Residential Tenancy’ (PRT) is the tenancy that, in accordance to the Private Housing (Tenancies) (Scotland) Act 2016, must be used for all residential tenancies where the tenant is an individual (i.e. not a corporate entity, which will lead to a ‘Company Let’), and the property is the tenant’s only or principal home. There are some other non-so frequent cases where this act doesn’t apply (Schedule 1, social housing letting and university lettings, to name a few), but for the simplicity of this article let’s concentrate on PRTs and Company lets.
Private Housing (Tenancies) (Scotland) Act 2016 is designed to give tenants greater security of tenure. Therefore PRT tenancies give considerable benefits to the tenants, particularly when it comes to the length of the tenancy (no minimum period).
Company lets
On the other hand, company lets are governed by Common Law. Although at firs sight this could imply that the tenancy contract will not benefit the tenant, this could be quite a long way from the truth. The tenancy contract of a Company Lets have no prescribed format or clauses, thus the conditions vary enormously. Oil and Gas Companies (the kind of tenant that most landlords long for in Aberdeen) tend to put on the table their own tenancy contract, with very little room for negotiation (other than the rent and the period of the tenancy, which is clearly agreed at the onset of the negotiation) once the employee finds the property of their like. The rent tend to be fixed for the duration of the tenancy and there is no deposit to cover any damages or rent payment. Having said that, since the tenant is a well stablished company, rent payment and cover damages are rarely an issue.
In generic terms, we could compare PRTs and company lets using the table below:
In our experience, rather than concentrating on whether the tenant is a company or an individual the effort needs to be made on identifying and following up all leads to secure the highest rent and the fastest tenancy, with a tenant (whether they are a company or an individual) that excels through our thorough referencing and financial checks. That will bring the highest rewards and lowest risk to the landlord.