Is guaranteed rent the same as rent-to-rent?

They usually describe the same structure: an operator leases the whole house from the owner at a fixed rent and lets the rooms itself. Terms vary widely between operators, so read the lease rather than relying on the label.

Will my house come back empty when the lease ends?

Not necessarily. Under section 18 of the Housing Act 1988, a lawful assured sub-tenancy continues when the head lease ends, and the occupier usually becomes your tenant. Do not assume vacant possession, and ask your solicitor how the lease deals with this.

Can I be fined if the operator does not license the HMO?

Since 1 May 2026, licensing offences can reach superior landlords, and rent repayment orders can be made against them. You have a defence if you did not know and had no reason to know, or took all reasonably practicable steps, so check and keep records.

Is a company let covered by the Renters' Rights Act?

A let to a company is not an assured tenancy, because only an individual can be an assured tenant, so the lease terms govern it. The room occupiers can have assured periodic tenancies with the full Renters' Rights Act protections.

Should I get legal advice before signing a guaranteed rent lease?

Yes. Have the lease reviewed by your own solicitor, not one introduced by the operator. The position depends on how the lease, the room tenancies and the law fit together, and the consequences of getting it wrong now fall partly on the owner.

HMO guaranteed rent and rent-to-rent explained

How does HMO guaranteed rent work?

Under a guaranteed rent arrangement, the owner of a house leases it to an operator for a fixed term at an agreed monthly rent. The operator then lets the rooms to individual occupiers, collects their rents, deals with management and maintenance, and keeps the difference between what it collects and what it pays the owner. The owner receives the agreed rent whether or not the rooms are full.

The same structure is often called rent-to-rent. The terms vary a great deal between operators: the length of the lease, who pays for repairs and compliance work, who holds the HMO licence, how the rent is reviewed and what happens at the end.

For some owners, a fixed rent with less day-to-day involvement is attractive. For others, the loss of control and the legal risks described below outweigh it. This guide explains how the arrangement works in law so you can judge any offer, including ours, on its terms.

Is a guaranteed rent lease an assured tenancy?

No. Under section 1 of the Housing Act 1988, only an individual can be an assured tenant. A let to a company is therefore not an assured tenancy, and the Renters' Rights Act did not change this.

That means the lease between the owner and a company operator is governed by its own contract terms, not by the assured tenancy rules for things like rent increases and possession. The lease decides the rent, its review, repair obligations, break clauses and how and when the arrangement ends.

GOV.UK guidance does not say whether the new rent in advance and bidding rules apply to a head lease with a company. Ask your solicitor how they apply to the lease you are being offered.

What tenancies do the room occupiers have?

The operator lets rooms to individuals who live there as their home. Those occupiers can hold assured periodic tenancies, with the full Renters' Rights Act protections, if they occupy the room as their only or principal home under a tenancy rather than a licence.

That has practical consequences:

occupiers can leave on 2 months' notice;
section 21 is no longer available, so possession depends on the statutory grounds;
rent can rise only once a year through a section 13 notice;
the rules on rent in advance, bidding, discrimination and pets apply to the operator as landlord of each room.

How these rules combine in a particular arrangement depends on the documents, which is why a solicitor's review matters.

What happens to the room tenants when the lease ends?

This is the point owners most often misunderstand. When the head lease to the operator ends, the room occupiers do not simply disappear.

Under section 18 of the Housing Act 1988, a lawful assured sub-tenancy continues when the head lease ends, and the occupier becomes the tenant of whoever is next entitled to possession, usually the owner. The Renters' Rights Act amended section 18 from 1 May 2026.

The Act also introduced Grounds 2ZA to 2ZD, which let an intermediate landlord recover possession when a superior lease ends. They are narrow. Ground 2ZA is limited to registered social housing providers, supported accommodation providers, companies at least 50% owned by a local authority and certain agricultural tenants, and Ground 2ZB applies only where the superior lease is longer than 21 years. An ordinary private operator on a short lease is unlikely to be able to use them.

So do not assume the house will come back empty. Plan for the possibility that you become the direct landlord of the room occupiers, with all the duties that brings, and ask your solicitor how the lease deals with it.

What risks do owners face since 1 May 2026?

The Renters' Rights Act deliberately reaches up the letting chain, to target criminal rent-to-rent. Since 1 May 2026:

Licensing offences reach owners. The HMO and selective licensing offences cover any superior landlord, not just the operator who manages the house.
Rent repayment orders reach owners. Orders can be made against superior landlords, for up to 2 years' rent, and applications can be made up to 2 years after the offence.
Directors are exposed. Orders can be made against company directors and officers where the offence was committed with their consent or connivance or, for specified offences, through their neglect.
Penalties are higher. The maximum civil penalty for licensing offences is £40,000.

A superior landlord has a defence if they did not know, and had no reason to know, that the property was an HMO, or if they took all reasonably practicable steps. In practice, that means checking the licensing position yourself, asking for copies of the licence and safety certificates, and keeping a record of what you checked and when.

What should I ask a guaranteed rent operator?

Will the house be an HMO, and does it need a licence? Who will be the licence holder?
Is planning permission or a lawful development certificate needed for the proposed number of occupiers?
Who carries out and pays for repairs, the gas safety check, the EICR, alarm servicing and the fire risk assessment? Will I receive copies?
What tenancies will the room occupiers have, and what happens to them when the lease ends?
How long is the lease, how is the rent reviewed, and what break clauses do both sides have?
Who pays council tax and utility bills during the lease?
Does my mortgage lender consent, and does my insurer cover this use?
If the operator acts as a letting or management agent, which redress scheme does it belong to, and which client money protection scheme if it holds client money?
What condition must the house be returned in, and who pays to put it right?
How often will the operator report to me and inspect the house?

Get the answers in writing, and make sure they match what the lease actually says.

Why should a solicitor review a guaranteed rent lease?

The legal position depends on how the head lease, the room tenancies and the statutory rules fit together in your case. A solicitor acting for you, not for the operator, can check:

whether the lease protects you if the operator breaks licensing law or stops paying;
how the room tenancies will be treated at the end of the lease;
what the lease says about repairs, compliance, insurance and dilapidations;
whether your mortgage, lease or title allow the arrangement.

This applies to every guaranteed rent offer, including ours. We recommend that every owner takes independent legal advice on our lease before signing. We do not give legal or financial advice ourselves.

How does our guaranteed rent service work?

Our HMO guaranteed rent service is a lease of the whole house for a fixed monthly rent, set out in written terms. Because we also design, build and maintain HMOs, we start with a free survey, measuring every room and checking the council's licensing and planning position for the address. Any works needed to bring the house up to standard are quoted in writing.

If you would rather keep the tenancies in your own name and pay for management, our HMO management service may suit you better. Compare both before you decide. Management and guaranteed rent terms are quoted per property.

Sources

This guide explains the rules in England as we understood them in October 2026. It is general information, not legal or financial advice. Check with your council and take professional advice for your own situation.

HMO guaranteed rent explained