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Is Rent in Advance a Deposit?

The question of whether rent paid in advance is a tenant’s deposit is to be decided by the Court of Appeal in March.

Why is this important?

Because the Section 21 would be invalid and the Landlord liable to pay the tenant up to 3 times the original deposit paid (multiply this by six months, not funny!!) The case of Johnson v Old was heard last January at Brighton County Court, which held that the advance rent of six months was a deposit and the Section 21 notice was invalid. Deputy District Judge Collins dismissed the landlord’s claim for possession and ordered the landlord to pay the tenant’s costs.

However, this judgment was overturned on an appeal last July, also in Brighton County Court, by His Honour J Simpkiss, who decided that advance rent was not a deposit. As a result, possession and costs were awarded to the landlord. The tenant then applied direct to the court of appeal using the same arguments as before and was given leave to appeal, which is due to be heard in March.

A tenancy deposit is defined in section 212 of the Housing Act 2004 as follows: “tenancy deposit”, in relation to a Shorthold Tenancy, means any money intended to be held (by the landlord or otherwise) as security for— (a) the performance of any obligations of the tenant, or (b) the discharge of any liability of his, arising under or in connection with the tenancy. In the case of UK Housing Alliance (North West) Ltd v Francis. It was held that when considering the definition of a ‘tenancy deposit’ it is necessary to read the Act as a whole and, when one does so, one sees a pervading reference to money "paid" by the tenant to the landlord, "received" by the landlord and "repayable" by the landlord to the tenant.

Therefore the rent money is not a tenancy deposit. The money has been taken in connection with an Assured Shorthold Tenancy but it is not security for an obligation, it is the obligation itself. It is perfectly clear it is not money paid to the landlord with any intention that it be repaid, the landlord will be keeping the money whatever the tenant does!

Gaining Access the 24 Hr Rule

Question...

Help, I need to carry out a Gas safety Certificate on my rented property, but the tenant keeps saying it is inconvenient. As a Landlord it is my duty to ensure a current certificate is always in place. Can I go in with my keys with the Gas Engineer as long as I give the minimum 24 hours notice?

Answer...

This is a very common question I get asked, whether it be for the Gas Safety Certificate as in your situation or general repairs or viewings. Most tenancies have written in to permit access after 24 hours notice, however this is for emergencies only (and that means something serious, such as a fire).

A tenancy gives exclusive possession of a property to the tenant and they have the right to 'quiet enjoyment' during their tenancy, a term or concept which is implied in all Tenancy Agreements. This means the Landlord should leave tenants to live in the property in peace. The tenants' right to keep everyone out of his property will override and access can only be gained by invitation or acceptance from the tenant.

You can apply to the courts for an injunction to gain access. The general rules are if after three attempts (and you can prove this by copies of letters) you have still not gained entry and you have reported it to health and safety you will not be prosecuted.

This is probably not what you want to hear, however the law is strict on this. Under no circumstances try to access the property with your own keys without agreement from the tenant.

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