Dealing with Landlord Default
Withholding rent Can a leaseholder lawfully withhold payment of rent (or service charges) in such circumstances? Technically the answer is “no”. A tenant’s covenant to pay rent and a landlord’s covenant to repair are independent. A breach of one does not excuse a breach of the other. Withholding rent may also put a leaseholder in a worse position by triggering a landlord’s right to take default action. Many leases also stipulate that rent must be paid “without deduction”. But note that “without deduction” was held in Connaught Restaurants Ltd v Indoor Leisure Ltd  2 EGLR 108 not to exclude a tenant’s right to set off financial liabilities owed to him by the landlord unless such right of set
off is also specifically excluded. There are only two circumstances when damages for breach of a landlord’s covenant to repair can be set off against a future liability to pay rent.