Landlords face more eviction hurdles after May 4th when a government scheme to protect people who have ‘problem debt’ comes into force.
As the NRLA highlighted earlier this week, while this legislation is aimed primarily at large lenders such as banks, the obligations apply to any creditor, including landlords.
Called the Debt Respite or ‘Breathing Space’ Scheme, it is designed to protect a variety of people who may have built up problem debt caused by the pandemic. The new scheme will impact both the evictions process and how landlord interact with guarantors.
“These breathing spaces come in two forms – standard and mental health,” says Mike Morgan of HF Assist and Mediation.
“A standard breathing space means landlords cannot contact a tenant to collect rent arrears for 60 days.
“A mental health crisis breathing space is only available to someone who is receiving mental health crisis treatment and it has some stronger protections. It lasts as long as the person’s mental health crisis treatment, plus 30 days.
Mike continues “It is important however to put this development into perspective. The new Regulations apply only to the enforcement of a ‘qualifying’ debt. This means for example where a court judgement for the debt has been made.
Furthermore, the scheme is not the debt free-for-all landlords might imagine – Breathing Spaces must be approved by either local authority, charity or FCA-approved debt advisors. An approved mental health professional will also need to be involved in cases relating to mental health”.
Once a breathing Space has been confirmed, landlords’ hands are tied; they cannot serve a Section 8 eviction notice, apply for a warrant or money judgement or receive a possession order. “Also, during a Breathing Space, landlords should not contact the tenant to ask for payment of the debt,” says Morgan (pictured).
“But mediation can continue during this process, albeit between the landlord and the tenant’s debt counsellor.”
The scheme will be administered by the Insolvency Service, which will notify landlords if their tenants has successfully entered the Breathing Space scheme.”