‘Breathing Space’ legislation for tenants in problem debt comes into force

Changes have been made to evictions legislation that letting agents in England and Wales need to be aware of.

From today Section 8 eviction notices must include details of the government’s ‘breathing space’ debt scheme within the paperwork to be compliant with the law.

The new ‘breathing space’ debt scheme is designed to shield people in problem debt from further interest and charges.

Agents need to ensure that their paperwork is up to date to include the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium), announced last year, which gives tenants in problem debt the right to legal protections from their creditors for up to 60 days.

People receiving debt advice can apply for the break, which lasts for up to 60 days, to prevent them falling into a spiral of debt.

The Treasury has estimated that up to 700,000 people in England and Wales could be helped by the scheme in its first year.

A similar system is already operating in Scotland.

Agents need to be aware of the changes as the scheme applies to most debts accrued before or after 4 May, including rent arrears.

When creditors, such as landlords are notified about a moratorium debt, they must pause enforcement action and freeze charges, fees and certain interest for the duration of the moratorium.

If the tenant has successfully applied for a Breathing Space, and has included rent arrears in their application, then the landlord will be notified by the Insolvency Service. In these circumstances it means agents and landlords must put on hold any action being taken in relation to rent arrears (including court action) for as long as the Breathing Space lasts.

In addition, a Section 8 notice cannot be issued for rent arrears (grounds 8,10 & 11) but can on any other available grounds.

Mark Hayward

Creditors such as agents and landlords will now be notified by The Insolvency Service when a debt has entered a moratorium. Creditors will need to prepare to receive notifications from the Insolvency Service and process them in order to implement the protections.

Propertymark’s Mark Hayward commented, “The changes introduced are to allow those struggling financially to have a limited time in which to seek advice and formulate a plan to move forward.

“The scheme will have a large impact on the current processes followed by agents and landlords when taking action against rent arrears, and it is now hugely important that those dealing with rent debt are aware of the new scheme and the changes in working it will bring.”

x

Email the story to a friend

More top news stories



16 Comments

  1. paulgbar666

    Great news for magic money tree sellers!   LL will need to buy some more now that even more rent defaulting tenant fecklessness is being facilitated by Govt.   You really couldn’t make it up!!   Not sure that Bojo’s skin isn’t being worn by Corbyn!!   Is it really worth being an AST LL when it is being made almost impossible to evict?   LL have to evict as no feckless tenant will comply with a S21. They should but NEVER do as they know they may live for years rent free before they are eventually evicted.   Hardly a viable business proposition for the LL!!    

    Report
    1. AcornsRNuts

      I note Section 8 cannot be used for rent arrears so just how the hell does a landlord pay his or her bills?

      Report
      1. LVW4

        Yes, s.8 is used for arrears.

        Report
    2. Jimbo1531

      Perhaps you shouldn’t base your income on billing people for their basic human rights?

      Report
      1. hgrlet

        Corr… the PIE crowd ain’t gonna like that, pal.

        Human rights are to be commodified don’tcha know?

         

         

        This post was sponsored by Nestle.

        Report
        1. AcornsRNuts

          So supermarkets shouldn’t bill them for food, electric companies for elect, water companies for water? Right, well that makes sense then. FREELOADERS.

          Report
        2. Jimbo1531

          I don’t give a **** what they like lol. Google news suggested this page, it’s not somewhere I’d willingly end up. Especially with **** nuggets like that Paul bloke calling the people who pay his bills feckless. Imagine having him as a landlord. Nightmare. Sh!tlord more like it.
           
          Utilities, and food are *not* the same are they, I can’t go and scavenge a bit of housing if I’m really desperate and in a bad situation. Property is tangible like food and water, but home is not. 

          Report
          1. LVW4

            What would you call a single tenant living in a lovely 2-bed apartment, who decides to stop paying his rent 13 months ago because, in his words, the landlord doesn’t have to pay his mortgage so I don’t have to pay my rent! Drug and alcohol-fuelled parties causing anti-social behaviour at all hours of the night, claiming his SEISS throughout lockdown and still working, receiving a £6000 tax rebate, and using a neighbour’s Wi-Fi to download rather nasty porn, such that police attended and he is on trial next month! Feckless? 

            Report
            1. Jimbo1531

              I’ll never understand where people like that come from, or where they go afterwards! 

              Report
              1. LVW4

                The problem is he is encouraged by anti-landlord rhetoric from shelter, generation rent, Labour… without considering his next move with a trashed credit history.  As to where he goes afterwards, prison, I hope. 

                Report
      2. paulgbar666

        Absolutely that is what I intend to do.

         

        I will be withdrawing my capital from the AST accommodation market.

         

        My properties WON’T be bought by FTB or ex-tenants as they can’t afford my MARKET PRICES.

        So any existing occupants will be homeless.

         

        They can enjoy the commodity of homelessness while my capital sits in a savings account where it will remain effectively socially useless.

        Hardly a result that those seeking rental accommodation would have wished for.

         

        I presume you believe that supermarkets should hand over free food that they have commodified.

         

        You sould like the typical idiot lefty that believes capital grows on trees and as such it should be used by those who can get it to provide free stuff for the the feckless of the world.

         

        In case you haven’t realised SOCIALISM is a bankrupt and dysfunctional political construct.

         

        LL in the private market regard their assets as commodities to be traded as they see fit.

         

        All tenants should be aware that they are only renting at the gift of the LL.

         

        It is entirely up to the LL what ge does with his capital.

         

        This is something idiots like you fail to understand.

         

        You can’t force LL to provide free accommodation or rather this Govt has which is why many private housing providers are leaving the AST PRS.

         

        The more Govt forces LL to become quasi social LL the more LL will withdraw from the AST market.

         

        Many LL will have realised that Govt has every intention via ridiculous regulations to control private rental accommodation.

         

        Such LL will not tolerate such a detrimental state of affairs.

         

        They will leave the sector leaving tenants as victims facing higher rents and fewer rental properties.

         

         

         

        Report
        1. Drof

          Renting a property is not a gift of the LL….it is a contract between two parties for their mutual benefit.

          The fact that having a home IS a basic human right too.

          I am absolutely sure that LL like most people consider a home critical to life and would not wish to deny anyone that basic human need, it would be simply inhumane.

          The wider topic of who should be supplying the housing is certainly extremely complex. Essentially the’housing’ situation in this country is broken with huge numbers of foreign owners, multi-million pound LL, THE Duke of Norfolk owning huge estates and refusing to sell land because of his tax liability, I could go on.

          Other countries make a much better job of it than we do, they have a fairer more equitable society where the gap between the haves and the have nots is considerable smaller than it is here in the uk.

          Those comments that are vile and without compassion, I urge you to think again, life can change on a sixpence.

          Report
          1. paulgbar666

            I’m afraid you are simply wrong.   The provision of private rental accommodation is entirely within the gift of the LL.     Of course such gift is subject to certain legal requirements.   The most significant of which has been the minimum 6 month AST.   Of course there is NO such thing as a 6 month AST.   An AST maybe for 1 day if that is signed for by LL and tenant.   The reason 6 month AST were always signed was because a LL was prevented from seeking a PO until 6 months had elapsed so the LL might as well always have a minimum 6 month period as a LL couldn’t get rid of any tenant until 6 months had passed. Should a LL CHOOSE to terminate a 6 month AST they may do so. No tenant has the right to force a LL into continual provision of that accommodation. Private assets belong to the owner to do with as they wish no matter how annoying that might be for the tenant.   Tenants rely on LL wishing to continue to let to them.   No tenant has the divine right to force any LL to continue letting to them.   It is the case that most LL DO wish to continue letting to tenants who comply FULLY with the AST terms.   It is only the willingness of a LL continuing in offering to treat that makes the letting accommodation available.   A private LL may remove that offer to treat anytime he chooses.   No tenant may dictate to a private LL what he does with his assets beyond AST terms or other legally binding TA.   It is IRRELEVANT if somebody relies on a LL wishing to continue letting to them.   ALL private tenants MUST realise that they are only being allowed to let at the gift of the LL That gift may be removed anytime of the LL choosing   That is how the PRS works.   Unfortunately you now have Govt sticking their oar in to prevent LL from receiving rent and not being able to get rid of non-paying clients.   When that occurs the business model evaporates.   No private LL will wish to continue in business when regulations are introduced that prevent LL from receiving their contractual rent.   Tenants for some bizarre reason believe private LL should continue to provide a home for them without paying for it no matter what the reason.     A most bizarre understanding which most LL don’t share and rightly so.   Every year feckless tenants cause private LL over £9 billion in losses every tax year mostly caused by rent defaulting. Now consider the tax take reduction as that £9 billion isn’t there to tax.   Of course there LL hit by S24 have to pay tax on fictitious income without any income if the tenant doesn’t pay rent.   But it can be safely stated that the poor old taxpayer is subsidising millions of feckless tenants who by not paying rent prevent the taxman from taxing that rent. Tax on £9 billion would be quite useful. Feckless TENANTS are a burden on society and yet Govt is prepared to allow such fecklessness to prosper preventing LL from sourcing rent paying tenants.   It is the completely dysfunctional eviction or rather repossession process that facilitates such fecklessness. For these reasons being a private LL has become a bankrupt business model especially if mortgaged in their own name. Feckless tenants cannot expect to use a LL capital to house themselves without paying for the contracted service.   In the coming years the PRS will shrink as more ridiculous regulations prevent LL from obtaining repossession of their properties from feckless rent defaulting tenants.   LL will vote with their feet to the vast detriment of tenants.   LL CANNOT be forced to remain LL no matter what feckless tenants believe and most defaulting tenants are feckless.   They could have planned for sudden income loss.   They chose NOT to. This choice was facilitated by Govt who banned evictions because they knew the costs of housing rent defaulting tenants would cost billions.   Forcing LL to provide effectively free accommodation was a great wheeze.   But won’t be as LL leave the AST sector. Govt will eventually have to face the massive costs of housing all those that private LL used to.   You reap what you sow!!

            Report
  2. LVW4

    “The changes introduced are to allow those struggling financially to have a limited time in which to seek advice and formulate a plan to move forward.” If they’ve built up 6 months’ arrears and made no attempt to discuss their ‘problems’ with their landlord, I would say they’ve had plenty of time to seek advice and formulate a plan to move forward. Oh, silly me, they have formulated a plan to move forward… don’t pay their rent!

    I have just had a Review and the tenant didn’t participate. It should now get to court, but I am now worried this will bite me in the **** on the day.

    Report
    1. paulgbar666

      Not paying rent is a very effective strategy for feckless rent dodging tenants. It is greatly facilitated by Govt.   To Byers I have never stated being a LL wasn’t worthwhile. Only as an AST LL to a single household.     So in a HMO with multiple AST less likely to have all tenants defaulting at the same time.   It is single household AST LL with mortgages that face massive business risks with being unable to get rid of feckless rent defaulting tenants quickly. Many shrewd LL are diversifying away from the single household AST business model and who can blame them!?   This is the business model that has been and is being systematically undermined by Govt policy. There is the potential to try far more profitable and definitely less risky methods of letting residential property than on AST.   Of course this means more tenant homelessness but that isn’t a problem that private accommodation providers have to concern themselves with.   The AST PRS is inexorably shrinking which I suppose is exactly what Govt wants!   Though where the removed tenants are supposed to live doesn’t seem to have occurred to the idiot Govt.   I do believe they believe that all these removed tenants will magically become homeowners!!!!!!!!!!!!!LOL! 

      Report
      1. LVW4

        Being feckless does not entitle a tenant to council housing. Councils have enough demands on their housing stock as it is, without having to put up with feckless tenants who have made themselves ‘intentionally homeless’ through non-payment of rent when they can afford it, and/or anti-social behaviour.

        Report
X

You must be logged in to report this comment!

Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.