Resolution case study – Withholding rent and the rule of set off

What happened?

The tenant said:

• there was a leak in the property which they reported to the landlord when it started
• the landlord did not reply for a week and then said he would organise a visit when he could get hold of his contractor
• a contractor turned up nearly two weeks later, after several more attempts to contact the landlord and by then the leak had caused the bathroom floor to warp and the ceiling in the living area below to stain
• while the contractor managed to stop the leak, he said he would report back to the landlord who could organise the repairs needed
• they emailed and tried calling the landlord about the repairs as the bathroom floor was now very uneven and the living area smelled of damp and black mould was starting to form
• the landlord eventually replied and said he would organise the work and let us know
• we heard nothing so started to withhold some rent each month so we could save and organise the work ourselves

The landlord responded, saying:

• there was a leak in the property and his contractor went to visit and assess the problem as soon as he had time
• the leak was not too bad, but it did cause damage due to the length of time it had been going on, which he accepts is not the tenant’s responsibility
• the tenant should have paid all his rent every month in line with the tenancy agreement and had no right to reduce it without agreeing that first
• he is not claiming for the damage and repairs but wants the outstanding rent to be paid from the deposit

What evidence was provided?

Tenancy agreement, emails, rent statement, contractor’s statement and invoice.

What was decided and why?

1. The tenant accepts they withheld rent due to the landlord’s delay dealing with the damage caused by the leak.
2. Emails support the attempts by the tenant to contact the landlord and organise repairs, which went unanswered.
3. The contractor’s report and invoice for the work to stop the leak was dated two weeks after the leak was reported.
4. The rent statement shows the shortfall over a four month period of £600 each month.
5. While there was a delay in the contractor visiting the property to stop the leak which compounded the damage that needed repair, a tenant is contractually responsible for paying rent every month as detailed in the tenancy agreement.
6. The tenant could have followed the ‘rule of set off’, which has very strict and specific rules that must be followed.
7. In the absence of any agreement with the landlord to reduce the rent, this amount remained outstanding and the full amount claimed was awarded to the landlord.

Key takeaway points

• Landlords need to respond and organise contractors as promptly as possible after problems are reported
• This helps maintain a good relationship with your tenant and minimises the potential damage to the property and repair costs
• Tenants need to understand the implication of withholding rent and that it is breaking the terms of the tenancy agreement if they do this without agreeing it with the landlord first or using the ‘rule of set off’ process which essentially involves:
• writing to the landlord with details of the problem, a proposed solution and an end date, or rent will start to be withheld
• at the end date, if no response, get three estimates for the work needed and write to the landlord with the estimates explaining they will go with the cheapest of these quotes unless the landlord arranges for the repairs to be done by a certain time
• if the landlord remains silent, the tenant should arrange for work to be done by the contractor who gave the cheapest quote and pay the bill
• the tenant should then send a copy of the receipt to the landlord asking for settlement
• if there is still no response from the landlord, send a final letter to explain that the cost for the work will be deducted from the rent

For related reading, our guide, ‘Can my tenant withhold rent?’, explains the unique circumstances when your tenant might be justified in not paying you rent, emphasising the importance of making sure you carry out any necessary repairs to the property which are your responsibility. You can also read another case study on withholding rent for repairs.