6 months AST with 6 months rent paid up front

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  • tania pyke
    started a topic 6 months AST with 6 months rent paid up front

    6 months AST with 6 months rent paid up front

    If a 6 month tenancy has started and the tenant paid 6 months rent up front does the landlord have to give 6 months notice to vacate the property? If so can we serve the section 21 several days after the tenancy has started? We know the LL needs the property back at the end of or shortly after the 6 month agreement ends. I recently heard all about this from someone who went on an ARLA course recently. Tania

  • Lawcruncher
    replied
    "Payable" means "liable to be paid". If, notwithstanding the clears terms set out in the tenancy agreement, it can be shown that the tenant was liable to pay six months' rent at the start of the tenancy then there may be an argument that any statutory periodic tenancy will be six-monthly. In the absence of any such obligation I think the position is different. It is an established principle that any sum tendered as rent before the date it is due is not deemed to be rent until rent day; it is a sum that the landlord holds to apply as rent on rent day.

    So, if you have a six month tenancy starting on 1st May and rent is payable on the first day of the month, and the tenant pays six months' rent on 27th April, the whole of that sum is held to be applied as rent. When we get to 1st May, only one month's rent is deemed to have been paid and the balance (equal to five months' rent) is deemed to be held to be applied towards further rent when it becomes payable. Come 1st June the rent due on that date is paid and the balance (now equal to four months' rent) is deemed to be held to be applied towards further rent when it becomes payable. And so on. In such a case at the end of the six months even though "six months' rent was paid up-front" it was in fact paid monthly.

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  • PaulF
    replied
    Originally posted by Lawcruncher View Post
    The question in this case is different. The agreement provides for the rent to be payable monthly, but six months' rent was paid at the start. Does that mean the statutory periodic tenancy is six monthly? Yes, apparently, even if rent is paid monthly after the end of the fixed period Again, if we are to follow the wording of the Act, it would seem that the periodic statutory tenancy has to be monthly. The only possible arguments are that there is some collateral agreement that needs to be taken into account or that the agreement should be rectified to reflect what had been agreed. However if it was the intention to collect monthly but the tenant just decided to pay six months' rent, that would I think be different.
    Not according to the wording of S.5(3)(e) as argued by a prominent lecturer in law, but then again as I have said, each lawyer can put a different interpretation on any given clause dependent upon for whom they are acting.

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  • Lawcruncher
    replied
    Originally posted by theartfullodger View Post
    He confirmed that 6months up-front means 6-months period (and all that thus flows, e.g. up to 6 months for Notices to take effect .. )and quoted a case: I wrote down "Church Commissioners V Meyer" but cannot find that one on't t'InterWeb... any ideas chaps??
    The case (it's Meya, not Meyer by the way) decided a different point. In that case the agreement reserved a yearly rent but provided that it should be paid quarterly. The tenant argued that following the common law this meant the statutory periodic tenancy was yearly. The Court of Appeal disagreed saying that the wording of the Act had to be followed. The statutory periodic tenancy was quarterly as the agreement provided for the rent to be payable quarterly. You can find the full report here: http://www.bailii.org/cgi-bin/markup.../2006/821.html and a summary here: http://www.practicalconveyancing.co....ew/10098/1124/

    The question in this case is different. The agreement provides for the rent to be payable monthly, but six months' rent was paid at the start. Does that mean the statutory periodic tenancy is six monthly? Again, if we are to follow the wording of the Act, it would seem that the periodic statutory tenancy has to be monthly. The only possible arguments are that there is some collateral agreement that needs to be taken into account or that the agreement should be rectified to reflect what had been agreed. However if it was the intention to collect monthly but the tenant just decided to pay six months' rent, that would I think be different.

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  • theartfullodger
    replied
    Tania said..

    I am the letting agent - a colleague at another company went on an ARLA course last week and was told that if a tenant paid six months up front on a 6 month AST then the landlord had to give 6 months notice to get the property back at the end of the agreement!
    and lawcruncher commented
    .
    It would be interesting to know exactly what the lecturer said.
    .
    At the Landlord & Buy-to-Let Show today, NEC Brum, Ian Potter Operations Director of ARLA was talking on "Agents: The Case for Statutory Regulation"... and somehow this point/question came up -no I didn't raise it.... (an interesting and valuable presentation btw... - I'm not a member or an agent)

    He confirmed that 6months up-front means 6-months period (and all that thus flows, e.g. up to 6 months for Notices to take effect .. )and quoted a case: I wrote down "Church Commissioners V Meyer" but cannot find that one on't t'InterWeb... any ideas chaps?? I'll email Ian if I can find him for clarification... He also suggested there were ways round this (I wasn't taking serious notes), I think he suggested if you took 6 months and later 1 week's rent ,,,

    Cheers!

    Lodger

    PS Met Tom Entwistle, Gent of this parish, a great pleasure (well, for me at least)!

    PPS As I said to the wife on the 'phone going into the show, a surprising number of the punters looked miserable and a lot of the punters & exhibitors I might not necessarily trust as far as I could throw them... Tom E excepted, obviously.

    Leave a comment:


  • PaulF
    replied
    Chambers Dictionary: Apposite (adj.) - Suitable, well chosen, appropriate.

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  • jeffrey
    replied
    Attraction of apposites.

    Leave a comment:


  • mind the gap
    replied
    Originally posted by Paul_f View Post
    Having consulted one or two fairly prominent people it appears that if the L agreed to accept payment for the whole of the fixed term even for rent that was reserved monthly then that is how he determined it was 'payable' by his action of acceptance. I understand why you disagree, but counsel for either party might want to argue the point in their client's favour dependent upon for whom they were acting. No doubt a judge would come to an an apposite opinion, dependent upon how well the presentation was made.
    'Apposite' : I do not think this makes sense, in this context. Do you mean 'appropriate'?

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  • Moderator1
    replied
    Less-serious posts (about words that change their meanings) have been moved to a new Take A Break thread:
    http://www.landlordzone.co.uk/forums...ad.php?t=23152.

    Leave a comment:


  • PaulF
    replied
    Having consulted one or two fairly prominent people it appears that if the L agreed to accept payment for the whole of the fixed term even for rent that was reserved monthly then that is how he determined it was 'payable' by his action of acceptance. I understand why you disagree, but counsel for either party might want to argue the point in their client's favour dependent upon for whom they were acting. No doubt a judge would come to an an apposite opinion, dependent upon how well the presentation was made.

    Leave a comment:


  • jeffrey
    replied
    Originally posted by Paul_f View Post
    Even if (b) were the case it is still deemed to be that when the tenancy became periodic then the Notice period is determined by how the rent was last paid during the fixed term, and not by how it is reserved in the TA.
    Sorry but no! The Act says 'PAYABLE', not 'PAID'. Here's s.5(3) of the Housing Act 1988, with my underlining:

    5(3). The periodic tenancy referred to in subsection (2) above is one:
    (a) taking effect in possession immediately on the coming to an end of the fixed term tenancy;
    (b) deemed to have been granted by the person who was the landlord under the fixed term tenancy immediately before it came to an end to the person who was then the tenant under that tenancy;
    (c) under which the premises which are let are the same dwelling-house as was let under the fixed term tenancy;
    (d) under which the periods of the tenancy are the same as those for which rent was last payable under the fixed term tenancy; and
    (e) under which, subject to the following provisions of this Part of this Act, the other terms are the same as those of the fixed term tenancy immediately before it came to an end, except that any term which makes provision for determination by the landlord or the tenant shall not have effect while the tenancy remains an assured tenancy.

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  • PaulF
    replied
    Even if (b) were the case it is still deemed to be that when the tenancy became periodic then the Notice period is determined by how the rent was last paid during the fixed term, and not by how it is reserved in the TA.

    Leave a comment:


  • jeffrey
    replied
    Originally posted by Lawcruncher View Post
    It would be interesting to know exactly what the lecturer said.
    Presumably that:
    a. the letting reserved rent payable six-monthly in advance; not that
    b. T voluntarily paid six one-monthly payments together up front.

    Leave a comment:


  • Lawcruncher
    replied
    It would be interesting to know exactly what the lecturer said.

    Leave a comment:


  • tania pyke
    replied
    I am the letting agent - a colleague at another company went on an ARLA course last week and was told that if a tenant paid six months up front on a 6 month AST then the landlord had to give 6 months notice to get the property back at the end of the agreement!

    Leave a comment:

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