Can A Company Enter Into A General Tenancy Agreement?

Under the Corporations Act (Section 124), a company is considered a legal entity and can enter into a contract.

Similar to screening a regular tenant for a property, you should exercise due diligence when a company applies for a contract. Landlords and Property Managers should consider the following before approving an application.

Request the corporate tenant provide a current ASIC search for a new tenancy. This will inform you who the director of the company is and confirm who has the legal capacity to enter into agreements on behalf of the company. You can also conduct your own ASIC search if the owner is agreeable.

Gather independent evidence as well. An accountant’s letter or copies of taxation assessments will support the company’s ability to meet the financial obligations of the proposed tenancy terms.

Check trade account references and rental references for the company and the individual director.

Try to have a director of the company or the intended occupant as a co-tenant. This provides the Landlord with greater protection.

Additionally, the approved number of occupants should be clearly stated on the General Tenancy Agreement Form.

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