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Court of Appeal rejects notion that rent in advance can be classed as a deposit

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Johnson & Ors v Old [2013] EWCA Civ 415

The Court of Appeal has ruled that a tenancy that a payment of 6 months rent in advance at the start of a tenancy does not constitute a deposit and as such does not need to be protected under a Deposit Protection Scheme. Ms Old’s tenancy agreement was poorly worded, stating both that 6 month’s rent in advance and monthly rent were payable leading to confusion as to whether the monies paid at the start of the tenancy should have been treated as a deposit.

The case underlines the importance of making sure that it’s clear at the start of your tenancy whether initial payments made are intended to act as a deposit or simply as advanced rent.

Where there is a deposit to be paid, the landlord needs to protect this by law by placing it in a government backed scheme. Tenancy deposit protection schemes ensure that the deposit you pay to your landlord is kept safe so it can be returned to you at the end of tenancy.

Within 30 days of the start of your tenancy your landlord must also provide you with their name and contact details, the amount of the deposit, details of scheme the monies will be paid into, a copy of the deposit protection certificate, information on how to get your deposit back and information on what to do if there is dispute about the  deposit's return .

Landlords who fail to comply with the above rules can be ordered by a court to pay compensation to the tenant. The court can also order that a landlord protect a deposit within a scheme. In addition, in certain circumstances, failure to protect a deposit can prevent a landlord from evicting you via a Section 21 notice. 

By Emma McClure