Tenant deducts from rent or offsets rent arrears because of disrepair

In general, tenants do not have the right to withhold rent if the landlord does not carry out repairs. Doing so could jeopardise the tenant's right to remain in the accommodation.

In certain circumstances, however, a tenant can pay for repairs and deduct the cost from future rent. Using rent in this way may be quicker than court action and avoids legal costs for both the tenant and the landlord.

Procedure that must be followed

If a landlord has clearly breached a repairing obligation, tenants have the right under common law to do the repair themselves and deduct the costs and expenses of doing so from future rent payments.

The correct procedure must be followed and adequate notice and estimates of costs must be submitted to the landlord in advance of the work being done so that they have the opportunity to do the works themselves.

If the correct procedure is followed, the tenant will have a complete defence to any possession action taken for rent arrears resulting from the deduction of repair costs from rent.[1]

The steps to follow are:

1. the tenant should inform the landlord of the repairs needed (preferably in writing) and allow a reasonable time for the necessary works to be completed

2. if the landlord fails to act, the tenant should inform the landlord (preferably in writing) that they will do the repair themselves unless the landlord complies with their obligations

3. the tenant should then allow a further reasonable period for the landlord to do the work

4. the tenant should then obtain three estimates and send them to the landlord with an invitation to comment within a reasonable time and a final chance to carry out the work

5. the contractor who supplied the lowest estimate should be employed to carry out the work

6. the tenant must then send the invoice to the landlord and request reimbursement for the cost

7. if the landlord does not pay, then the tenant may deduct the cost of the repair work from future rent

Limitations of this remedy

Taking action in this way has certain limitations:

• it can only be used by tenants who can afford to pay the contractor themselves; as a result, it can only be used to tackle minor disrepair

• it can take a long time to follow the correct procedure and do the repairs needed

• it can only be used for the cost of the disrepair, not for damages (for example for stress or injury to health) that may have arisen due to disrepair

• the tenant is liable for any negligent workmanship or damage to the property resulting from the work done

• council tenants who receive housing benefit cannot use this remedy

• housing association and private tenants who claim housing benefit or any tenant who claims universal credit (for housing costs) may have their payments suspended until the issue is resolved

If the tenancy agreement states that tenant cannot use rent to pay for repairs, this is likely to be an unfair term, which will not be binding on the tenant.[2]

In possession cases where there is disrepair it may be possible to argue that rent arrears should be 'set-off' against the damages for disrepair, reducing or completely cancelling out any arrears.[3]

Similarly, tenants who are not facing eviction may also be able to deduct the costs incurred from accumulated rent arrears using the procedure for withholding rent.[4] It may be possible to offset rent arrears in this way even if the property is sold to a new landlord.[5]

It is not necessary to be able to quantify the amount of damages in order to use set-off as a defence to a rent arrears action.

When arrears can be offset

This option is only available if the landlord was in breach of their obligation to repair before the court proceedings started.[6] If the disrepair occurred later, then, although it can still be raised in court, the landlord can argue that it should be heard as a separate issue and cannot be used as a defence.

In order to argue successfully for set-off, the tenant needs to show that the set-off arises due to a breach of a condition of the tenancy, and that it would not be equitable (fair) to allow the landlord to recover the arrears claimed. The judge will look at the past conduct of both parties in relation to the tenancy, as well as whether the case is proved.

This procedure has the advantage that it takes account not just of the cost of the repair works but also of the damages that the tenant is entitled to as a result of the landlord's failure to carry out the repairs.

If a term in the tenancy agreement states that the tenant cannot offset rent arrears, it may constitute an unfair term, which will not be binding on the tenant.