In May, the Court of Appeal made a landmark ruling,
decreeing that the payment of rent in advance does not
count as a deposit.
The decision came from the case of Johnson vs. Old, which
had been rumbling its way through the labyrinthine judicial system
for a significant amount of time. In this case, a tenant was
offered a six-month tenancy. As she did
not receive a set income, she was asked for the full six months'
rent in advance.
A semantic complication was added by the contradictory
drafting of the tenancy agreement, which asked for six months' rent
in advance, but also stipulated that rent was to be paid
The tenant, Anne Old, took her landlords to court when they
attempted to serve a Section 21 notice to claim possession of the
property. Her argument, that she had already paid a
deposit (the six months' rent) was initially victorious; however at
a second hearing her landlord successfully challenged this.
The tenant then acquired legal aid to appeal the
latter decision. This week's decision from the Court
of Appeal was the third and final appearance of the case, and ruled
in the landlord's favour.
Old's payment ruled to be rent in advance, not
The Court asked Ms Old how she would have
reacted if asked to pay rent for one of the six months, having
already made the initial six-month payment.
Old's reply, that she would have considered
herself to have already paid for that month's rent with the initial
payment, was deemed to be crucial in the Court's decision.
They ruled that this proved the payment, which
Old had made, was functioning as rent for the property, and not a
The case has been seen as opening the door for landlords and
agents to accept rent in advance without worrying that it will be
subject to the same legal requirements as a deposit.
Steve Harriott, chief executive of the Tenancy Deposit
Scheme, said: "This is a very helpful clarification of an issue
which has been concerning landlords and agents.
"The judgement in this Court of Appeal case should assist
those landlords and agents who want to ask for rent in advance and
who can be reassured that this is not a tenancy deposit that needs
protecting under the Housing Act 2004."