Sometimes, a landlord is offered a multiple of months rent in advance by a prospective tenant. Commonly this is six months rent in advance.
Since the introduction of tenancy deposit schemes, this can cause a surprising problem. It is well accepted that where a landlord claims that a payment of money was for rent in advance and not a deposit, this is deemed as a deposit for the purposes of the tenancy deposit legislation [Piggott v Slaven, Great Grimsby County Court 23 February 2009]
However, because of this and if a landlord takes six months rent in advance on a monthly tenancy, the landlord could be regarded as having taken five months worth of deposit which requires protecting. The penalty could be very serious if it were deemed a deposit.
Where the tenancy is clear about what is true rent in advance, it is okay to take the money. However, the tenancy must be correctly set up for this to work. The below pages are modified front pages of our tenancy agreements for the DPS, MyDeposits and no deposit.