Return of Tenant’s rent?

Reply to the comment left by "Sally T" at "11/10/2013 - 15:50":

thanks Sally, I did locate it.
I was trying to get out of reading it, (uni has taken away my once ferocious reading appetite!).

The deposit can only be applied to those liabilities in respect of which it is held - the tenancy agreement should set those out. Damage etc will almost certainly be one of them. Any dispute relating to the application of the deposit will be determined by the deposit protection scheme with which it is registered.

However, it is important to note that just because the deposit protection scheme rules against you and returns the deposit to the tenant, this does not prevent you from suing the tenant for any losses you have suffered.

The advance rent is simply that - a payment on account of rent which will fall due, to be applied to the liability as it arises. It is not another deposit.

The first question is, is the tenant liable to pay the rent for the rest of the term? The short answer is yes, except where he has vacated pursuant to a break clause, or when you re-take possession in order to re-let the property. Once you re-take possession, the lease comes to an end and the liability to pay rent ceases.

Assuming, then, that you establish the tenant is liable to pay you further rent, you could apply the rent advance to the rent instalments as they fall due.

But what if the there is no further rent due, could you apply the rent advance to the disrepairs? Strictly speaking you could not, as it is not held for that purpose and you should return it and then sue the tenant separately for the damage to the property. Practically speaking, though, if the tenant sued you for the return of the rent arrears, no judge is going to order that you repay it whilst the disrepair claim remains unsatisfied. In any event, if the tenant sued you, you would counterclaim for the disrepairs.

The upshot is that you should hang onto the rent advance and simply make an allowance for it in any claim you make in court.

[I am not a lawyer]

In a prvious thread (sorry, I cannot locate it), Mark Alexander (I believe) identified that
A) If the agreement is signed as a deed, then the tenant is obligated to pay the rent to the end of the contracted time (which in your case appears to be 12 months); landlord has no obligation to minimise this amount by seeking a new tenant asap, but I don't know what the position is if you do get another tenant before the end of the term; I would guess that you cannot continue claiming from your ex-tenant.
B) If the agreement is not signed as a deed, then the tenant is obligated to pay the rent until the end of the term or until the property is relet, whichever occurs first; the landlord is obligated to relet the property as early as is practicable.

In either case, the prepaid rent cannot be used to offset damage without a court order.

I suggest that you first determine what rent you are due based on A) or B) above, and deduct that from the pre-paid rent you are holding AND inform the ex-tenant that that is what you are doing.

As to whether you should keep the money until the case is heard, I do not know the legal position but I personally would keep the money (in excess of any rent due to vacation before the end of the term) until directed otherwise by a court.

I assume that the tenant has given you written notice of termination OR has given you back the keys to the property; if not, then the tenancy is still running and
a) the tenant continues to be likable for rent, and
b) you cannot relet without risk of tenant claiming unlawful eviction.

Reply to the comment left by "Jay Jay" at "11/10/2013 - 14:58":

The relevance of Johnson vs Old is that if you use the money to pay for damages, then it is considered to be a deposit and not rent in advance.

That means that it should have been handled in accordance with deposit legislation.
As it has not been secured within the time limit, if it is used as a deposit, then the landlord is open to claim from the tenant for redress (3 times deposit plus deposit refund).

Therefore do not use rent in advance to cover damages, etc, without
a) the written agreement of the tenant, or
b) a court order.

Reply to the comment left by "Michael Barnes " at "11/10/2013 - 19:27":

Good, exactly as I thought. It just needed spelling out.

Given what Michael Barnes has kindly explained, the original enquirer should not use the advance rent as if it were a deposit.
- - - -
It would be a practical suggestion to hold on to monies owing to the ex tenant, not to use in the same way as a deposit, but to wait for a judge to tell him what to do with it.

Also of course, the original enquirer ought to spell out (in full detail) both in court application papers and in writing to the ex tenant, exactly what he is doing.

I'm not a lawyer couldn't be bothered with the exams!!

But this is a question I have asked lawyers and also seen (the same) answers printed in journals etc over the past 20 years.

As far as actual overpaid rent is concerned that cannot be treated as a payment for anything else no matter what the tenancy agreement may say in terms of typical standard deduction clauses in certain circumstances or at certain times.

In terms of rent paid in advance my view would be the same protocols would arise as the money is held for a specific purpose and not just to discharge any other debts that may, ort may not (and only according to the LL anyway) have arisen.

The advice on not treating it as a deposit anyway because of TDP implications is EXTREMELY sound and to do so wouldn't be just shooting yourself in the foot, it would be like blasting your leg off with a shotgun.

Don't even consider it you'd be turning it into an unprotected deposit, and too late to legitimately protect to avoid penalties.