Despite the fact that the majority of people are feeling the financial pinch these days occasionally a tenant may opt to pay their rents several months in advance, as well as handing over the specified deposit. In the case of a deposit, landlords must place the sum in a deposit protection scheme, but this is not the case with an advanced rental payment.
Rent or deposit
The issue of whether an advanced payment of rent can be classed as a deposit s recently been the subject of legal argument in the Court of Appeal. In the case of Johnson vs. Old, when a landlord tried to gain possession of his property, the tenant argued his advance rental payment had in fact been a deposit and since the landlord had not protected it, he could not be evicted under a Section 21 notice.
Case dismissed
The case went to court, but unfortunately the judge ruled in favour of the tenant. The landlord’s claim for possession of his property was thrown out and he was ordered to pay the tenant’s costs. The landlord was not happy about this, so he took his case to the Court of Appeal and won.
Landlord vs. tenant
However, the tenant decided he wasn’t about to back down yet and although he was initially refused leave to appeal, he applied directly to the Court of Appeal and was granted an appeal. The appeal case will now be heard at the beginning of March, so landlords will have to wait and see what the outcome is and whether (or not) rent paid in advance must be treated as a deposit, and therefore protected as such.
