Tribunals, Courts and Enforcement Act 2007

Tribunals, Courts and Enforcement Act 2007

2007 CHAPTER 15

Part 3: Enforcement by Taking Control of Goods

Commentary on Sections: Part 3

Section 82: Off-setting payments under a notice

392. This section applies where a landlord has given notice to a sub-tenant under section 81.

393. Any sums that the sub-tenant pays under the notice to the superior landlord will be deductible from the amount of rent he would otherwise have had to pay to his own landlord. So, if the sub-tenant is required to pay £250 a month to the superior landlord under a notice (i.e., until the stated arrears are paid off), then he is entitled to deduct £250 a month from his own rent for as long as he is required to continue making payments under that notice. If there is a hierarchy of sub-leases and the landlord serves notice on an inferior sub-tenant, then this diversion of rent may be passed up the hierarchy of superior sub-tenants until ultimately it is deducted from rent payable to the (defaulting) immediate tenant. For example, where the notice is served on sub- tenant C, he may deduct any sums paid to the superior landlord from rent due to his own landlord (sub-tenant B). Sub-tenant B may then deduct an equivalent amount from his landlord (sub-tenant A) and sub-tenant A may deduct an equivalent amount from his landlord (the immediate tenant).

394. Payments under a section 81 notice will continue to be deductible from rent in this way, even after the arrears stated in the notice have been paid or the notice has been replaced by one served on another sub-tenant, unless the sub-tenant is aware of those facts. So a payment under a section 81 notice will not be deductible from rent if, at the time it is made:

• the landlord has already withdrawn the notice;

• the paying sub-tenant has already made payments under the notice that total an amount at least equal to the arrears stated in that notice;

• the paying sub-tenant knows that the arrears stated in the notice have already been paid off by some other means (e.g., by the immediate tenant).

395. Similarly, part of a payment under a section 81 notice will not be deductible from rent if, at the time it was made, that part of the payment, when added together with earlier payments made by the sub-tenant, at least equal the arrears stated in the notice.