‘Breathing Space’ – and how it will affect Landlords.

The Debt Respite Scheme (also known as Breathing Space) created

in May this year, prohibits banks and landlords from chasing unpaid

debts and rent, and offers tenants a period of time to try and find

a solution to their financial problems. This will directly impact

landlords and lettings agents – particularly those seeking possession

of property due to rental arrears.

There are two types of breathing space that a tenant may enter into:

• a standard breathing space

• a mental health crisis breathing space.

For the most part, both types of breathing space operate in the same

way. Creditors are not allowed to contact debtors directly to request

payment of the debt, or take enforcement action to recover the debt

(including by taking possession of a property).

The duration and frequency of the breathing spaces vary. A ‘standard’

arrangement will last for a maximum of 60 days, however, a mental

health crisis breathing space ends 30 days after the tenant’s treatment

for mental health issues, ends.

Local authorities providing debt advice and FCA approved debt

advisors can grant Breathing Spaces to people who are in debt –

they would be expected to speak to them to establish whether this is

the best solution for them.

If the tenant is in a position to pay off the money they owe through

financial budgeting or by other means of raising funds, such as

selling possessions, then a Breathing Space may not be deemed the

right solution for them. However, if a Breathing Space is thought to

be the most appropriate way forward, their name will be added to

an electronic record and their creditors will be notified, although the

decision can be challenged.

It is worth noting that secured debts aren’t covered by Breathing

Space rules, so your mortgage lender would still expect to receive

mortgage payments from you during the period that your tenant is

in a Breathing Space.

You may continue to contact your tenant about anything not

related to the debt. For example, arranging repairs or inspections

for electrical or gas safety checks. In addition to this, if the tenant

has asked to talk to you about their rental arrears or is proposing a

solution, then you can answer their enquiries.

If you would like further guidance on the Breathing Space

scheme and how this may affect you please don’t hesitate

to contact our award-winning team. (See article ‘Impact of

Breathing Space on Section 8 possessions’ on our Blog)