SCHEDULE 1Permitted Payments
Payment in the event of default
6
(1)
A payment that is required, under a standard occupation contract, to be made in the event of a default by the contract-holder is a permitted payment, but this is subject to sub-paragraph (3).
(2)
In this paragraph, “default” means—
(a)
a failure by the contract-holder to make a payment by the due date to the landlord, or
(b)
a breach by the contract-holder of a term of the contract.
(3)
In the case of a default to which sub-paragraph (4) applies, if the amount of a payment required in the event of the default exceeds the prescribed limit, the amount of the excess is a prohibited payment.
(4)
This sub-paragraph applies to—
(a)
a failure by the contract-holder to make a payment of rent by the due date to the landlord;
(b)
any additional description of default which is specified by regulations.
(5)
In sub-paragraph (3), the “prescribed limit” means a limit specified by, or determined in accordance with, regulations.