Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

Tenancy Deposit Protection and ‘Rent in Advance’

A recent case in Grimsby County Court reported in Legal Action magazine has cast doubt on a method commonly used by private landlords to avoid the tenancy deposit protection regime.

Under section 213(8) of the Housing Act 2004 a deposit is defined as property intended to be held as security for the performance of any obligation of the tenant. Many landlords seek to avoid this by taking money described as ‘rent in advance’ and claiming not to hold a deposit at all.

This was precisely the position in the case of Piggot v Slaven in Grimsby. The Court held that the question of whether or not money has been taken as security must be judged objectively in each case. However in the case before the Court it was held that the money was intended to provide the landlord with security should the tenant fail to pay rent at some future date. The money held was therefore caught by the defintion in s213(8) and should have been prtected in a scheme. The landlord was accordingly ordered to pay the normal ‘3 times the deposit’ penalty to the tenant.

While this case is only a decision of a District Judge in a County Court and is therefore not binding on other Courts it is undoubtedly a shot accross the bows of landlord who seek to avoid the tenancy deposit protection provisions by asserting that money they are holding is merely rent in advance and not a deposit.

Filed under: Uncategorized, ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 51 other followers

Have you tried the PainSmith toolbar?

Useful links and access to the PainSmith blog in a convenient toolbar within your web browser. Available from: painsmithlettingshelper.ourtoolbar.com/
%d bloggers like this: