Rent Adjustment Periods and RRB.
Today I have been looking at how the ban on rent in advance works with taking an 'adjustment' payment so that subsequent rental payments fall on a day that is more convenient for the landlord and/or tenant.
For consistency I will work with one scenario: a tenancy that starts on the 15th of September but the rent needs to be adjusted to be paid on the 1st of the month and then monthly thereafter. How much can a landlord take up front?
S1 of RRB (which introduces a new S4A into HA'88) states that rental periods must be 'a period of 28 days or shorter' or 'monthly' (S4A(3) HA'88).
S1(8) of RRB states that the rental is deemed 'monthly' even if the first rental period is different to the rest, as long as that first period does not exceed 30 days and the remaining rental periods are monthly. For our scenario we cannot therefore take 46 days rent up front to take us to 1st November as we are capped at the first period being 30 days or less. Our first rental period must be the 16 days to 1st October.
S9 of RRB (which introduces a new S4B into HA'88) states that rent cannot be taken in advance, except for the 'initial rent' (S4B(2)(b) HA'88).
Initial rent is defined at S9(12) RRB as 'the first rent period' (note: there is a second definition for initial rent, but I believe it relates to being able to take multiple weeks' rent up front if the rent is payable weekly).
Therefore in our scenario, if the landlord wants to take the adjustment period up front, the 'initial rent' is the adjustable period of 16 days. We can take that payment in advance (note: after the agreement has been signed) but no more.
On this basis there is a real trade-off to adjusting the rent at the start of the tenancy that does not currently exist. You can do it, but you are taking a lower amount at the outset. So what can be done instead?
Turning back to S4A HA'88. S4A(4) allows for 'different rent periods at different times' as long as those periods are permitted by S4A(3). That means we can introduce a rental period between the first month and the second month of less than 28 days to adjust the rent. This allows a landlord to take the full month's rent up front, adjust the rent thereafter, and then run from the new rent date for the rest of the tenancy. The restrictions on initial rent do not apply because the adjustment period is not the initial rent. We ignore S1(8) of RRB because whilst we can do the adjustment period up front, we do not want to.
To apply it to the scenario:
Initial rent payment: 15th September to 14th October (permitted, once the agreement is signed)
Adjustment rent: 15th October to 31st October
Second rent: 1st November.
