SCHEDULE 1Permitted Payments
Payment in the event of default
I16
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.