How will the new ‘Breathing Space’ regulations affect landlords?

Important new regulations are coming into effect on 4th May 2021 which are designed (amongst other things) to help people who have fallen behind with their rent. I have compiled the most common questions we are asked and answers to them. They explain what the new regulations mean for landlords. 

Q       The new regulations have quite a complex title, don’t they? What are they all about?

A       Yes, they are the ‘Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020’. It is a bit of a mouthful, but I just call them the ‘Breathing Space Regulations’.

They apply to people who have certain types of debt, including tenants who have fallen behind in their rent payments. So it’s clearly important for landlords to understand their potential impact.

Q       What kind of help do they give? 

A       The name ‘Breathing Space’ gives you the clue. Tenants who are in arrears can apply for a breathing space of up to 60 days during which time there are restrictions on what a landlord can do; for instance, they can’t contact their tenants about the rent arrears or take legal action against them. But the tenant must have received debt advice from an authorised debt advisor or local authority. The debt advisor is the one who will ensure that all the eligibility requirements have been met.

The regulations work slightly differently for people who are undergoing mental health crisis treatment — for instance, the timescale relates to the period of their treatment.

Q       How will the regulations affect landlords? 

A       When a tenant has been granted a ‘breathing space’, a landlord or their agent will not be able to:

  1. Make contact with the tenant in relation to the debt owed
  2. Serve an S8 notice or issue any other type of demand letter for the rent arrears
  3. Add late payment fees or interest to the debt during the breathing space period
  4. Issue any legal proceedings that include the debt
  5. And if legal proceedings have already started, the court must be notified that a breathing space has been granted and must suspend the proceedings while it is in place.

It is important to note, though, that tenants must continue to pay rent during the breathing space. The regulations apply only to debt from before the start of the breathing space. If they fail to maintain payments, the breathing space can be cancelled.

Q       Can a tenant keep applying for more breathing spaces? 

A       Yes, but no-one can have more than one breathing space during any 12-month rolling period, so there are limitations.

I would be happy to talk to any landlords who find themselves affected by these regulations. Just get in touch with me on 01608 695252 or book a telephone or video appointment via my online calendar calendly.com/sarkawilde .

 

 

Sarka Wilde

 

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