Prescribed limits for failure to pay rent2.

(1)

The prescribed limit in the case of a failure by a contract-holder3 to make a payment of rent to a landlord by the due date is to be determined as follows.

(2)

In the case of a failure to make a payment of rent before the end of the period of seven days beginning with the due date, the prescribed limit is zero.

(3)

In the case of a failure to make a payment of rent after the end of the period of seven days beginning with the due date, the prescribed limit is the aggregate of the amounts found by applying, in relation to each day after the due date for which the rent remains unpaid, an annual percentage rate of three per cent above the Bank of England base rate to the amount of rent that remains unpaid at the end of that day.

(4)

In this regulation, the “Bank of England base rate” means the percentage rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short term liquidity in the money markets.

(5)

But where an order under section 19 of the Bank of England Act 19984 is in force, any equivalent percentage rate determined by the Treasury under that section applies.