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Rent paid in advance does not count as a deposit

Court Of Appeal Rules That Rent In Advance Is Not A Deposit

Court Of Appeal Rules That Rent In Advance Is Not A Deposit

The landmark Court of Appeal ruling means that landlords and their appointed letting or property managing agents are not obliged to treat rent paid in advance as a deposit, as that would require protection under the Housing Act 2004.

The Court of Appeal’s decision was made in respect of the long-running case of Johnson v Old, where the tenant was offered a six-month tenancy and was asked for six months’ rent in advance, because she did not have a guaranteed fixed income.

The agreement in the case provided a confusing element as the agreement stated that the rent should be paid monthly in advance, but also said that the rent should be paid six months in advance.

The tenancy was subsequently renewed on the same terms before becoming a periodic tenancy where the rent was paid monthly in advance.

The landlord attempted to gain possession of the property, by serving a Section 21 notice to the tenant, Anne Old.

The tenant countered the Section 21 notice, saying that it could not be legally served because she had paid the rent in advance, which she thought should have been treated as a deposit and therefore protected.

The tenant’s argument was successful at the first court hearing, but was then challenged successfully by the landlord at a second.

The tenant then appealed the judges 2nd decision, and with the help of legal aid, the case then went to the Court of Appeal, which gave its decision in favour of the landlord. 


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