The Court of Appeal’s decision that rent paid in advance does not count as a deposit in the long-running case of Johnson v Old, will bring much welcomed relief to hundreds of landlords, according to Landlord Action.
The tenant, who was asked for six months rent in advance because she did not have a set income (also common practice when tenants fail a credit check), tried to dispute a Section 21 notice claiming the advanced rent was in fact a deposit. Paul Shamplina, Founder of Landlord Action, a leading organisation helping landlords and property professionals deal with problem tenants, comments on what this landmark ruling means for landlords.
“We have almost 200 landlords who have been nervous about acting for possession. The outcome of this case is great news for landlords. They can now go ahead with confidence, knowing where they stand with the taking of deposits and the classification of advanced rent. A different outcome would have caused ambiguity, leaving a big question over the system.”
“We receive calls to our helpline daily regarding the holding of deposits and advanced rents stated on tenancy agreements. This particular case also highlights the importance of thorough due diligence when forming a tenancy agreement. We are very pleased at the ruling and feel it will provide a much needed boost of confidence in the system.”