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We’ve recently heard of some agents proposing that prospective tenants should set up their own limited company, and that the tenancy would be granted to the company rather than to the individual. The idea is straightforward enough: because an assured tenancy under the Housing Act 1988 must be granted to an individual who occupies as their only or principal home, a tenancy to a company sits outside the assured tenancy regime – and therefore outside the Renters’ Rights Act 2025 reforms as well.
On the face of it, this may sound like a neat way to preserve “more flexible” contractual lets in a world where Section 21 is being abolished and fixed terms are disappearing. But once you dig into the details, both the legal risk and the consumer-protection risk become hard to ignore. Our view is that this is not a strategy landlords or agents should be promoting.
The main authority often cited for this type of arrangement is Hilton v Plustitle Ltd [1989] 1 WLR 149 (CA). In that case, a flat was let to a company that had been set up by the occupier specifically so that both sides could avoid Rent Act protection. The company was the named tenant, the occupier was allowed in under that company tenancy, and later tried to argue that she was in substance the real tenant and entitled to statutory rights. The Court of Appeal disagreed: the tenancy had been genuinely granted to the company, and both landlord and occupier clearly understood that structure and its purpose. The arrangement was artificial, but it was not a sham, so the occupier did not acquire statutory tenant status.
Read carefully, Hilton does not say “anything goes”. It says that where both sides understood and intended a company tenancy, the court will generally respect that. The decision rests heavily on the fact that Miss Rose knew exactly what she was doing. If an occupier is bounced into a similar structure without adequately understanding the consequences, the analysis may be very different.
Putting the moral questions to one side, the practical consequences for a would-be tenant are significant. An individual who is asked to set up a shell company to rent a home may:
All of this is a heavy administrative burden for an ordinary renter, and it is very easy for people to fall foul of filing deadlines or compliance requirements.
From the landlord’s perspective, dealing with a shell company can also be risky. If the company stops filing or becomes dormant, it may be struck off, and any court action for rent arrears or damages may be harder to pursue in practice. A judgment against an empty, asset-less company is often worth very little.
Legally, a tenancy granted to a company will not be an assured tenancy, because the tenant is not an individual (see s.1 Housing Act 1988). That means that most of the protections which the Renters’ Rights Act is designed to deliver – including the requirement to rely on statutory grounds to regain possession – simply don’t apply. The occupier becomes, in effect, a licensee or sub-tenant of their own company, without the same clear statutory structure around notice, grounds, or rent challenge.
In a fully informed, negotiated commercial context, this may be acceptable. But in the 2026 English PRS, where the typical occupant is a consumer renting a home, it isn't easy to present this as anything other than a way of sidestepping the spirit of the reforms. There is a real risk that tenants do not appreciate that by agreeing to the company structure, they may be stepping outside the protections they have been told to expect under the new system.
This is where the Digital Markets, Competition and Consumers Act 2024 (DMCC) and the unfair commercial practices (UCP) provisions come into play. The Competition and Markets Authority’s guidance makes clear that:
Under the UCP rules, it is a criminal offence to engage in misleading actions or misleading omissions – for example, leaving out material information that the average consumer needs to make an informed decision, especially in an invitation to purchase.
If an agent proposes a company-let structure but does not clearly and prominently explain that:
there is a strong argument that this is an omission of material information. In more serious cases, if the landlord or agent positively suggests that “your rights are basically the same” or that this is just a formality, it may amount to a misleading action about the consumer’s legal rights. Both may be offences under the DMCC Act.
The CMA also highlights a general duty of professional diligence. In our view, a professionally diligent landlord or letting agent in 2026 should not be steering ordinary residential tenants into complex company structures without a crystal-clear explanation and genuine informed consent.
In strictly legal terms, a properly documented company letting may still “work” to keep an arrangement outside the Renters’ Rights / Housing Act regime, particularly where both sides knowingly choose that outcome. Hilton v Plustitle remains the authority for that proposition.
But for the mainstream private rented sector, we think this is the wrong direction of travel. Requiring an individual renter to incorporate a company as a condition of getting a home is, at best, high-risk and, at worst, may be seen as an attempt to mislead or take advantage of a lack of legal knowledge. It may expose landlords or agents to criminal and regulatory scrutiny under the unfair commercial practices regime, and it may leave landlords with more – not fewer – problems when something goes wrong.
For those reasons, our advice to Guild subscribers – both landlords and agents – is clear: don’t treat company-let structures as a clever workaround to Renters’ Rights. If you encounter suggestions along these lines, take independent legal advice and think carefully about the consumer-protection and reputational implications before you go anywhere near them.