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General Landlording & Rental Properties

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Paul Kubin
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  • Rental Property Investor
  • Fort Smith, AR
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How do I rent to a business?

Paul Kubin
Pro Member
  • Rental Property Investor
  • Fort Smith, AR
Posted Mar 10 2024, 15:41

I own a small house in Arkansas that I rent out primarily to nurses (intermediate-term rental) and have a construction company that is doing a local project and wants to house one of their crews in the house for 3 months.  The lease is in the foreman's/VP's name (solid guy, good credit check, etc.).  Based on the terms of the lease, the company took out a commercial rental insurance policy for their time while there.  The insurance company wants the lease in the businesses name.  How exactly do I do that?  Should I put the company name in the lease as "Lessee" and the president of the company as a cosigner (after running his credit/background)?  I've never rented to a business.  

I have researched the company and are legit.  I'm using Avail, so this would be an amendment to the existing lease (once signed, you can't edit the lease, only amend it).


Thanks, everyone!

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Spencer Tillman
  • Real Estate Agent
  • Chattanooga, TN
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Spencer Tillman
  • Real Estate Agent
  • Chattanooga, TN
Replied Mar 10 2024, 16:35

@Paul Kubin 

Take this advice with a grain of salt. Hopefully it can provide you with a path on how to resolve your issue. 

Maybe someone with more experience can step in and go more into detail?

Amend the Lease Agreement: Utilize Avail's amendment feature to update the lease. Specify the company name as the "Lessee" and ensure the company president signs as a guarantor or co-signer, subject to a credit and background check.

Review Insurance Requirements: Confirm the insurance company's requirements regarding the lease. Ensure that the commercial rental insurance policy includes coverage for the company's stay in the property.

Include Legal Language: The lease amendment should clearly state the terms and conditions of the arrangement, including responsibilities for maintenance, utilities, and any other pertinent details.

Seek Legal Advice: Consider consulting with a local attorney specializing in real estate to ensure compliance with Arkansas rental laws and to draft the lease amendment accurately.

Document Everything: Keep thorough records of all communications, amendments, and agreements between you, the company, and Avail for future reference.

Good luck!!
Spencer

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Melanie P.
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#3 Multi-Family and Apartment Investing Contributor
  • Rental Property Investor
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Melanie P.
Pro Member
#3 Multi-Family and Apartment Investing Contributor
  • Rental Property Investor
Replied Mar 10 2024, 23:47

You could add the commercial entity as a co-tenant. I wouldn't remove any of the people you have who remain individually liable. 

If you do lease to a commercial tenant you will need to notify your insurer and make sure that your policy still works. Be specific about what you're doing there in case you have an issue.

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