Rent in Advance Can be a Deposit

Piggott V Slaven Great Grimsby County Court, 23 February 2009

Note: this is an older county court decision, but its reasoning on when money labelled as rent can still amount to a tenancy deposit remains relevant.

Mr Piggott granted a tenancy to Ms Slaven in 2005. 

She paid a deposit of £600.00 for this tenancy. On 14 February 2008, another tenancy was granted for a different property. £75.00 from the earlier deposit was repaid to Ms Slaven, and Mr Piggott held the balance of £525.00.

He said that £105.00 was for the first week's rent and £420.00 was "rent in advance". 

On 24 June 2008, Mr Piggott served a section 21 notice requiring possession on 27 August 2008. 

Possession proceedings were commenced, and Ms Slaven defended those proceedings, contending that the £420.00 was a deposit and the landlord had failed to protect the deposit as required by s.213 Housing Act 2004. 

At the time of the decision, if that was the case, the landlord could not serve a section 21 notice at any time the deposit was not protected (or prescribed information given), and the notice was therefore invalid (s.215 Housing Act 2004). That was the possession consequence being considered in 2009, rather than the current possession guidance.

She also counterclaimed an order for Mr Piggott to pay three times the deposit. 

After referring to s.212(8), District Judge Richardson held that whether money is to be held as security is to be judged objectively. 

It would be contrary to the Act's purpose to allow landlords to avoid its consequences by stating that they did not intend to hold money as a security. 

He found that the sum of £420 was not paid as rent in advance but was intended to afford Mr Piggott security should Ms Slaven breach any future obligations to pay rent under the tenancy agreement.

It was accordingly a 'tenancy deposit' for s212(8). It had not been dealt with following an authorised scheme, as required by s213.

He dismissed the possession claim and ordered Mr Piggott to pay £1260 within 14 days.

Current law note: Housing Act 2004 s.212(8) still applies in England when deciding whether money is held as a tenancy deposit. Wales has its own security-deposit regime under the Renting Homes (Wales) Act 2016; the same objective reasoning may be relevant by analogy, but Piggott is not a decided Welsh authority.

In England, the Renters' Rights Act 2025 has abolished section 21 for assured tenancies and deposit compliance is required for most section 8 possession grounds. Landlords should also note that rent cannot be required before a new tenancy is entered into and only limited initial rent may be taken after signing, so historic “rent in advance” arrangements like this may raise additional issues. In Wales, deposit protection requirements under the Renting Homes (Wales) Act 2016 continue to apply to occupation contracts.