Your guide to company let deposit protection

If you normally let properties to individual tenants, you’ll probably be familiar with the rules around taking and protecting a tenancy deposit. But what happens when the tenant named on the agreement is a limited company instead?

Company let deposit protection works differently because the rules are determined by the type of tenancy you create, rather than simply by the fact that the property is residential.

A genuine company let will usually sit outside the statutory deposit protection rules that apply to assured periodic tenancies in England. However, it is important to establish exactly who your tenant is before accepting a deposit and signing an agreement.

This guide focuses primarily on England. Tenancy and deposit rules differ across Wales, Scotland and Northern Ireland, so landlords elsewhere in the UK should check the requirements that apply to their property.

What is a company let?

With a genuine company lease, the company itself is named as the tenant on the agreement. The company rents the property from you and then allows an employee, director or another authorised person to live there.

This is different from letting your property directly to the person who will be living in it. The distinction matters because different legal rules can apply depending on who has entered into the tenancy.

Our guide to the different types of tenancy explains some of the other arrangements landlords may encounter and why identifying the correct tenancy type is so important.

Does the company let deposit protection apply?

In England, a landlord taking a deposit for an assured periodic tenancy must protect it in a government-approved tenancy deposit protection scheme. Assured periodic tenancies replaced assured shorthold tenancies on 1 May 2026.

However, a genuine company let cannot normally be an assured tenancy. Under the Housing Act 1988, the tenant, or each joint tenant, must be an individual for a tenancy to qualify as assured. A limited company does not meet that requirement. Legislation.gov.uk

This means the statutory company let deposit protection requirement landlords sometimes expect does not normally arise in the same way. If the company itself is genuinely your tenant, its deposit will usually sit outside the tenancy deposit protection rules that apply to assured periodic tenancies.

That is different from a standard assured tenancy, where landlords taking a deposit will normally need to use a tenancy deposit protection scheme.

You should still make sure the agreement clearly explains how the company deposit will be held and returned.

What if a company pays the deposit for an employee?

This is where the distinction can become confusing.

A company transferring the deposit does not automatically make the arrangement a company let. What matters is who is actually named as the tenant.

For example, an employer might pay a deposit on behalf of an employee, while the tenancy agreement names the employee personally as the tenant. If that arrangement qualifies as an assured periodic tenancy, the normal statutory protection requirements can still apply even though the deposit money came from a company.

Equally, owning a rental property through a limited company does not make the tenancy a company let. The term refers to the tenant being a company, not the landlord.

Before deciding which deposit rules apply, check the agreement and establish who the legal tenant actually is.

Does the normal five-week deposit cap apply to a company let?

For assured periodic tenancies in England, a tenancy deposit is generally capped at five weeks’ rent where the annual rent is below £50,000 and six weeks’ rent where it is £50,000 or more. GOV.UK

The Tenant Fees Act rules apply to specified types of residential arrangements, including assured periodic tenancies, student accommodation and licences to occupy housing. GOV.UK

Because a genuine company let falls outside the assured tenancy framework, landlords should not simply assume that the same statutory deposit cap applies.

Instead, the amount of security required should be clearly agreed between you and the company and recorded within the company let agreement. That does not mean automatically taking an excessive deposit; the amount should be appropriate for the arrangement and the risks involved.

What should the company let agreement say about the deposit?

Where the normal statutory deposit scheme is not governing the arrangement, the wording of your company let agreement becomes particularly important.

It should make clear:

• how much deposit is being taken
• which company has paid it
• who the deposit should eventually be returned to
• what obligations the deposit is intended to secure
• when you may make a deduction
• how and when the remaining balance will be returned
• who is responsible for damage caused by the people occupying the property
• how any disagreement over deductions will be handled.

Many of the practical principles in our guide to tenancy deposits are still helpful here. A clear inventory, photographs and evidence of the property’s condition can be just as important in a company let, even if the statutory protection process itself is different.

Because a company let is a contractual arrangement that differs from a standard assured tenancy, consider taking appropriate legal advice rather than simply adapting a normal tenancy agreement.

How should you handle deductions from a company let deposit?

Being outside a statutory deposit scheme does not mean deductions should be made without evidence.

Your agreement should establish the circumstances in which money can be retained. Depending on its terms, this might include unpaid rent, damage beyond reasonable wear and tear, missing landlord-owned items or another loss arising from a breach of the agreement.

Keep evidence such as:

• check-in and check-out inventories;
• dated photographs;
• contractor quotations and invoices;
• rental payment records; and
• relevant correspondence with the company.

If an item has been damaged, the amount claimed should reflect the actual loss. For example, it would not usually be reasonable to expect the company to fund the entire cost of replacing an old item with a brand-new equivalent simply because some damage has occurred.

Good evidence makes it much easier to explain how a deduction has been calculated.

What happens if the company disputes a deduction?

With an assured periodic tenancy, a protected deposit gives landlords and tenants access to the relevant deposit scheme’s dispute process if they cannot agree on deductions.

A company let that sits outside statutory deposit protection may not have access to that same process. This makes the agreement and your evidence particularly important.

If the company disputes a deduction, start by checking the terms of the agreement and supplying the evidence supporting your claim. Try to resolve the disagreement directly and follow any dispute-resolution process written into the contract.

If an agreement cannot be reached, the matter may ultimately need to be resolved as a contractual dispute. Consider taking legal advice before pursuing court action.

Do landlords have to take a deposit on a company let?

No. Taking a deposit is not automatically compulsory.

As we explain in our guide to whether landlords have to take a deposit, a landlord can decide whether taking security is appropriate for the arrangement.

With a company let, you might consider the financial standing of the business, its references, the people who will occupy the property and whether any other contractual guarantees are in place when deciding what security you require.

Make sure your company let is properly protected

The key thing to remember about company let deposit protection is that you should establish who your legal tenant is before applying the rules you would normally use for an individual tenant.

If you are entering into a company let, make sure the deposit arrangements are clearly documented, keep an accurate inventory and retain evidence throughout the tenancy. This can make dealing with deductions and disputes considerably simpler later on.

The way a property is occupied can also be relevant to your landlord insurance. If you’re considering a company let or changing how an existing rental property is used, make sure your insurer has accurate information about the tenancy and occupants.

For help protecting your rental property, speak to the CIA Landlord Insurance team about the cover available to you. You can get a landlord insurance quote online or call 01788 818 670 to discuss your requirements.