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Breathing Space law will halt landlords seeking arrears or eviction

The government has set out details of its new Debt Respite Scheme - also known as Breathing Space - which comes into effect in May.

This will give someone in 'problem debt' the right to legal protections from being chased up by creditors - and as this applies to the rental sector, it is likely to protect tenants from being chased up by landlords or their letting agents. 

The new details as set out on the Gov.uk website say there will bear two types of breathing space - a standard breathing space and a mental health crisis breathing space. 

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A standard breathing space is available to any individual with problem debt and gives them legal protections from creditor action for up to 60 days. 

“The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts” says the government guidance.

Individuals can access this standard breathing space - which the government states “is not a payment holiday” - only through an approved debt adviser registered with the Financial Conduct Authority, or via a local authority if it is approved to offer this kind of advice to its residents. 

An individual who applies for such a ‘space’ can get no more than one a year.

A mental health crisis breathing space is only available to a client who is receiving recognised mental health crisis treatment. 

If an approved mental health professional certifies a client is in mental health crisis treatment, the client or someone else might ask for a mental health crisis breathing space on the client's behalf. 

The mental health crisis breathing space has some stronger protections than the standard breathing space. It lasts as long as the client's mental health crisis treatment, plus 30 additional days thereafter, no matter how long the crisis treatment lasts.

If you’re a creditor - that is, a landlord with arrears owed - and if you’re told that a debt owed to you is in a breathing space, you must stop all action related to that debt and apply the protections. 

These protections must stay in place until the breathing space ends.

In addition, if you receive a notification of a breathing space debt that you have sold to another creditor - so for example, you may have sold your buy to let property to another investor or owner occupier - you must tell that creditor the breathing space has started and give their contact details to the debt adviser.

“If you do not do this as soon as possible, you’re liable for any losses the debtor or the assigned creditor have as a result” says the government advice.

There are lengthy guidelines recently put up on the government website, and you can see them here.

 

 

The National Residential Landlords Association has analysed the guidelines and says that for most landlords, the impact of the new laws will of course occur where a tenant is in arrears. 

“In these cases they cannot serve a Section 8 notice, apply for a warrant or money judgement or receive a possession order during the breathing space. They should also not contact the tenant to request payment of the debt during this time” says the NRLA.

And it warns: “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 during the period your tenant was in their tenant is in a breathing space. However it is likely you would be able to come to an arrangement should you explain the situation.”

The association adds: "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 a debt solution or debt then you can answer these enquiries.”

However, the onus is on the landlord to resist making contact or instigating actions to chase the arrears or begin an evictions process.

You can see the NRLA’s guidance on the new law here

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • George Dawes

    Seems to be plenty of space between most politicians ears

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    You'd be forgiven for thinking that the ministers are trying to kill us with this legislation
    ' A mental health crisis breathing space is only available to a client who is receiving recognised mental health crisis treatment'
    You know they only have to have one session with a psychiatrist & they will get this year given to them whilst languishing in your property

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    Seems madness to me, so not only can tenants now rent for free they can have their car repaired for free at the local garage with no come back on them.

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    It is clear that our grossly overpaid politicians and so-called public sector clerks are continuing with their mental condition crisis.
    Nice one MPs for legalising robbery and deceit for tenants.
    It is high time MPs worked without pay like councillors, but only get expenses!

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    Why should they even get expenses?

     
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    cllrs are paid--leader of councillors is on £60000+

     
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    @ Terry, the leader of Norwich City Council, £60k+ and lives in a council house on a subsidized rent blocking that home from a young family that needs it, and yes David W he is a Labour councilor, stinks doesn't it, hippocrate.

     
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    So, the tenants are having more legal protection, to delay paying their rent to us!! In the meantime, landlords still have to ensure mortgage payments are paid on time, regardless of not receiving rent payments and no ‘breathing space’ available to landlords as the mortgage companies are exempt from this new law!!!

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    Yes secured debt ie Mortgage holders are not covered.

    It is now clear that a tenant or person without assets is considered to be a different class of citizen (subject to preferential laws) compared to a homeowner. This has the hallmarks of Marxism written all over it.
    The Whitehall swamp needs to be drained

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    Yes its like Stalin having his officers shot. This regime just executes its cash cows.

     
  • Philip Savva

    It gets worse, will the government pay our mortgages ?

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    So, a tenant who pays no rent, gets this little breather yet a landlord that cannot pay his mortgage, gets no help at all.

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    Well its that time again. Like a good honest Tax payer I`m about to pay my annual hit. It`s time this Government remembered the people who put in the pot and treated them with a little more respect. If I don`t pay taxes , the full force of the state is used against me. If we don`t get paid the powers of the state make it ok. This madness needs to stop and although I voted for Boris this mistake will not be repeated. And they wonder why people turn to Nigel Farage!

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    Can I claim a mental health breathing space and stop HMRC from chasing for my taxes??

     
     G romit

    We have a TINO Government ( Tory in name only)! Who are really Communists.

     
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    No, Tricia…it’s specifically excluded from the Scheme. As are Court fines, Council tax etc.

     
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    Typical uk politicians protecting those parasites and maggots. Everyone jumping on the mental health wagon now, bloody vermin.

  • Bill Wood

    'gives them legal protections from creditor action for up to 60 days'

    Very ambiquous. Just how long is this legal protection for? 60 days? 1 day?
    How are we (or the tenant) supposed to know how long this lasts?

  • James B

    Adds to the case again for guarantors being essential ! They can maybe claim crazy defence this but the debt will recover eventually from them

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    Totally agree there James, no suitable guarantor, no tenancy.

     
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    I suspect that the guarantors will be able to use this defence as well. I think LLs will need multiple guarantors, income protection insurance (for the tenant) or in my case, 1 have year's rent up front.

    It's getting ridiculous, almost like they want to encourage eviction by baseball bat.

     
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    Laura B - Guarantors can still be pursued before, during and after the breathing space. It's just the debtor that can't be (during)!!

     
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    The bigger problem is the inability to evict, rather than chasing the guarantor for what has already been accrued.

     
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    Well from now on then Government and local council have to become guarantor since making all these rules

     
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    Can’t believe - No protection for landlords!

    James B

    Only if you have no guarantor

     
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    Have I missed something here?? The article says that there’s basically no lead time on how long a mental health crisis breathing space is allowed, suggesting it could actually (albeit probably extreme circumstances) go on forever!

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    I have to say that I was thinking just the same thing, so now we need to add to our list of unsuitable tenants the vulnerable with mental health issues.

     
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    I wonder what actually constitutes a “mental health crisis”.

     
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    True Clare. The landlord can neither evict nor even mention the debt until one month after the end of the MH treatment - so if their ‘anxiety’ last for 20 years (as it could!) then 20 years of free living it is! The real kicker is that the debts run up under the period of the breathing space also cannot be pursued!!

     
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    But it would seem we can go after the guarantor if we have one, so that looks like a must have now.

     
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    Unless the guarantor has one of these orders (rather than the tenant)...although you’d still be able to evict in that case. Home owning/working guarantors aren’t immune from mental health problems.

     
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    Re the comments about guarantors; are there any insurance policies available for people to pay their rent in event of losing their job? As LLs, should we be demanding that for the duration of any tenancy, tenants have income protection insurance? In Canada it's normal for the tenant to have to prove they have contents insurance as part of a tenancy; so why not income protection insurance to cover the rent? That would make a legal case for rent recovery / eviction easier because they should maintain their income in event of accident / illness, or otherwise would have deliberately caused their loss of income by getting sacked or walking out.

    Think I'll want more than one guarantor when this comes in - they could all claim MH crises!!

     
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    Because, Laura B, Tenant Fees Act precludes any requirement to either pay anything or even enter into a third-party contract as part of the granting/maintaining a tenancy agreement.

    You can only take one week holding deposit (fraught with problems/requirements), a maximum of five weeks rent deposit (must be protected) any rent when it’s due, and ‘reasonable’ costs for specified instances/occurrences.

     
  • Fery  Lavassani

    Free advice of the day. If you owe someone some money and do not wish to pay the creditor, just act doolally. But please do not let my tenant know that!!!!!

     G romit

    New business opportunity "Doolally Kits" (comprises 1 pair underpants, and 2 pencils, plus instructions for use) only £20.00 from Blackadder Enterprises. 😂😂

     
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    Well I said before not to worry it was going to get worse. This will just accelerate a massive economic crash if you were in the process of purchasing and see this you would pull the plug, some LL buy with the tenants in place that won't be happening either too risky. We know it will be abused like the man said one visit to the Psychiatrist and they will be rent free just like a Sick note from the Doctor we know all about that. Why are some Councils going to be allowed to do it they are not fit or proper they have proved that. Why are lenders exempt does it only matter when its their money ? we have far more input than them and taken a greater risk than them yet they are preferential creditors but Gov' gives them priority at any time including a Pandemic. The Housing market was the only Business underpinning the economy not much else happening, now doing your best to collapse that as well. Thousands of high Rise going up in London clearly not required they will not be all sold despite huge Gov' subsidies at tax payers expense, white elephants again. LL's can have their space back when they stop breathing.

  • Matthew Payne

    Its not breathing space for tenants, its breathing space for the government who needs more time to get the Renters Reform Bill rammed through parliament without having 50,000 tenants evicted whilst they do it.

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    If the tenants don't pay their rent, how can the landlord afford to pay for repairs? How about a breathing space for doing their repairs i.e. leaving the tenants without heating or hot water in an electrically unsafe property? Seems fair to me!

    Fery  Lavassani

    I had a protected tenant that was supposed to pay £40.00 a week for a three bedroom semi. She was behind in total £2000.00. I had to maintain the property. I one case, I paid £4500.00 to put a new roof on the house. Cut the long story short, I could only sue her for my rent. Get a judgment and send a bailiff to take their television. I have had them all. Protected Tenant, Assured Tenant and the AST. If we lose Section 21, we will go back to the dark days on pre 1985. For this my friends, I am out.

     
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    When my tenats owe rent I will only do essential repairs, for instance a broken electrical socket will be replaced with a blanking plate hence nowhere to provide power for their playstation.

     
  •  G romit

    Rogue tenants will be jumping for joy as the Govrrnment has just added a nuclear weapon to their armoury of legislation they can use against Landlords to avoid eviction.
    All they have to do is feign mental illness (underpants on their heads an a pencil up each nostril ala Blackadder), and they can stay rent free for as long as they want, and not be hassled by their Landlord

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    Landlords- like me - should go on strike! I will only do a few holiday lets now. That’s it! Soon we will be like the jews in 1930s Germany - no rights, nothing: everyone can crap on us!! Immoral!!

  • George Dawes

    All the lunatics aren’t in the asylums , they’re in politics

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    Does anyone know if S.8 Notices will be completely excluded during a Scheme order or just for Ground 8?

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    S8 grounds 8/10/11 excluded, so you may be able to evict on another, probably discretionary ground, but what’s the betting no judge will allow a discretionary ground through?

     
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    My tenant was bipolar and a pain in the posterior. Am I glad she has gone. It would have been used in a snap.

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    No rent no home so simple to understand so simple to implement. Make all tenants sign for that so there is no misunderstanding.

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    I like the idea but I fear it is not legal.

     
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    How many discrimination law suits will there be from this?

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    That's a difficult one, insurance companies ask many questions, if someone answers yes to having mental health issues they likely will refuse to insure them, or at the very least load the premiums, is that discrimination ? no reason why we cannot do the same is there ?

     
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    But I'm sure you could ask are you the subject of a 'breathing space' order? as we are doing finance checks. A lot will jump onto this initially but it has to be made clear that yet again this will work against them going forward & you will end up with a slumlord (then you will have something to be depressed about) or in a tent.

     
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    I doubt you’ll be allowed to ask as it’s deemed ‘medical’ and privileged information. Insurance (as far as Govt. are concerned) are exempt from this, unsurprisingly…

     
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    Isn't it illegal to Not pay rent when yiu can?

  • Tara Meeks

    This is another nail in the coffin for landlords, surely many of the MP's are landlords themselves?
    What happens when the mortgages cannot be paid, can the mortgage companies take possession then, probably not, as legally they have then become the landlord? Many tenants will take advantage of this madness.
    We have a tenant who was 12 months in arrears pre Covid, not actually living in the property but at his girlfriends house. The tenants is still legally in situ, and even thought the arrears were well established pre-Covid the court will not consider this fact (or even look at the case), as all evictions are postponed........ the landlord receives no funds, but has to continue with all maintenance and safety checks ...... the tenant will surely be registering this development.
    All common sense and justice thrown out of the window.....

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    But how long before we return to the good old days when the heavies turn up and physically throw the non payers out ? cannot happen in the 21st century ? watch this space, and when it does happen, government, shelter, GR, etc only have themselves to blame

     
     G romit

    This TINO* Government has just ushered a new era of Rachmanism, as good Landlords exit the narket, leaving the rogues.
    New eviction process involves baseball bats and large ugly men.
    * TINO Tory in name only

     
    Fery  Lavassani

    If you all think, when this Covid business is over you sell and get out. You have something else coming. Its called Capital Gains of 45%. I am pretty certain that these MPs before going t sleep think how they can screw the landlord in the morning.

     
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    Agree and it has returned.
    The worm has turned, and so has the removeral men.

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    So can someone explain to me how this work?

    You cannot serve a section 8 for the first 2 months with thus breathing space bs.

    Then after 2 month you are able to serve section 8?

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    Tara - Absolutely right. This situation for us landlords is completely off the scale! Is there a fellow landlord on here, particularly good at composing a letter, outlining all the points of injustice? We could then all send a copy to our MPs asap?

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    Waste of time Frances, they are not interested, we just get fobbed off.

     
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    Tara, good day, as far as lenders are concerned there's is no problem for them its not allowed and backed up by Law. The day they go to Court and get guaranteed possession they won't become the LL but the new owner as they always get vacant possession.

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    A lot of tenants don't know this until the bailiffs turn up unexpectedly and they are out same day.

     
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    • T L
    • 19 January 2021 19:08 PM

    Just visited the Gov.uk website and according to Section 3.13 of the Debt Respite Scheme it states the following:

    3.13 Ongoing liabilities during a standard breathing space
    Certain debts are considered ‘ongoing liabilities’ during a standard breathing space. The debtor needs to keep paying these if they can. If they don’t, the debt adviser might cancel the standard breathing space.

    An ongoing liability is any payment the debtor has to pay during a standard breathing space for:

    a mortgage secured against the debtor’s primary residence (this does not include arrears accrued up to the start of the breathing space)
    a lease or rental agreement for the debtor’s primary residence (this does not include arrears of rent for the property accrued up to the start of the breathing space)
    an insurance agreement
    any taxes, duties and national insurance contributions
    any local taxes or rates for local authorities
    water, sewerage, electricity, gas, heating oil or solid fuel bills
    Any other debts or bills (secured or unsecured) that fall due during a standard breathing space are not ongoing liabilities.

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    Now that is interesting so a tenant would need to pay any rent that became due but not the past arrears, bet a good few tenants that try it on will fall foul of that one, maybe we will need to issue a money claim online as soon as the rent is 2 wks late to force the issue early.

     
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    There’s also the part, “If they are in a position to pay off the money they owe through proper budgeting or selling things, then a Breathing Space *may* not be deemed the right solution for them.”

    Although I suppose this will be abused either way…if they can’t *fully* pay off the debt then they won’t make them try to sell things, but even if they could pay it off, it’ll be deemed ‘not the right solution for them’ (because losing your unnecessarily large flatscreen telly they can ill-afford would also make them sad)…

     
    Fredy Jones

    So what will happen if they still don’t pay but have mental crisis?.

     
  • Fredy Jones

    seems the eviction ban plus backlog plus this new breathing space scheme means tenants are able to live rent free with no chance of being evicted for 18-36 months at the earliest

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    How many landlords do you think are going to stand for that ? there were other ways yrs ago, I can see those ways coming back, needs must.

     
  • Fredy Jones

    I can see illegal evictions coming back to bite LLs

  • Fredy Jones

    Even having a guarantor is no guarantee as they can get breathing space

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    Yes but a good guarantor would be worried about their credit rating so most likely would not be in that position as to need a breathing space

     
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    And if the guarantor had one, it would be highly unlikely the tenant would have one, in which case, one could get rid of the tenant and pursue the guarantor after (eviction and the guarantor’s BS).

     
  • Fredy Jones



    It is totally true that by selling a previously rented property it does not suddenly disappear, but it is equally true that it may not be rented again, the person buying it may simply live in it as their own home for life....... and they may never have rented before or, more importantly, never needed to rent as they have the funds to buy. This reduction in the rental stock will only affect those who (as always) are the most vulnerable and the low paid, those who cannot buy, and probably never will be able too. .


    This entire argument that goes something like.....”the government are treating LLs so badly that many want to sell up and get out of the market, then there will be a shortage of properties to rent”

    my point is the properties are still there. There are less and less people able to raise a deposit and get a mortgage. Unemployment is soon to be at great Depression levels when furlough ends.

    who is going to buy all these BTL properties when more and more LLs want out?

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    I will dig out the Govt. report of I can find it and post it, but there are two significant groups that purchase properties (taking them out of the private rental sector), but also don’t appear in the current tenant figures…divorcees (that were previously in the one marital home, now becoming two household) and adult children still living with parents. Net decrease in BTL stock, net increase in persons/tenants (still) needing (re-)housing.

     
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    Fredy, yes I agree with you that the properties don't simply disappear and in the main your assessment of what is likely to happen is true although one important factor is missing here. That is what will also disappear is my £40k income tax per £100k income pa, (no personal allowance allowed either). Maybe the Chancellor is so flippant he don't want money, how many billions does LL's pay ? if the property is occupied lived-in by un-rented Residents they will not have be to paying money to the Treasury just because the live in a property unlike the Tenants Residential penalty, perhaps he don't intend addressing the £280 billions debt + that is owed rising rapidly.

  • Fredy Jones

    May the 4th be with you

    My guess is the eviction ban will be extended until may 4th when new breathing space starts and will be eviction ban by another name

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    • 17 February 2021 16:51 PM

    Of course. You are 100% correct.

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