Earlier this month, the government announced the Debt Respite Scheme, also known as Breathing Space. It is due to come into effect in May with the aim of giving “people who have ‘problem debt’ the right to legal protections from being chased up by creditors”.
Two types of protection are outlined on the government website:
First, standard Breathing Space is available to anybody with problem debt, providing “legal protections from creditor action for up to 60 days”. Second, mental health crisis Breathing Space which is only available to someone who is “receiving recognised mental health crisis treatment”.
It was assumed, or perhaps hoped, that, in the rental sector, this would mean that tenants with debt issues might be protected against being chased up by landlords, letting agents, or any parties working under the orders of those agents and landlords.
But today, it’s been revealed that the protection for tenants might not be as all-encompassing as first thought. David Smith, a partner in the litigation team at JMW Solicitors, explains how tenants will be protected, but also highlights the ways in which it might not be protection enough:
“During a [Breathing Space] a debtor or tenant in arrears cannot be contacted to seek payment of the debt subject to the moratorium and cannot be asked to pay any part of that debt, any interest on it or any fee or cost created by it.
“They also cannot be served with a section 8 notice citing one of the three grounds for possession for arrears (grounds 8, 10 and 11) or the equivalent notices in Wales under the Renting Homes (Wales) Act 2016 (when it comes into force).”
These are all good measures for protecting struggling tenants, but Smith is sure to point out that landlords are still far from powerless against tenants who are invoking Breathing Space.
He explains that “a section 21 notice and section 8 notice can still be served and enforced against a tenant” for issues other than rent arrears.
Smith adds that it is still “an absolute requirement of a debt moratorium that a tenant benefitting from it continues to pay their rent for their main home”.
If a tenant invokes Breathing Space, it can protect them from having to pay rent arrears, but in no way does it mean they can stop making their ongoing, month-by-month, rent payments. If they do, legal action can, and most likely will, be taken.
Who can use Breathing Space?
People can access the standard Breathing Space “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”.
The protection lasts for 60 days and a person who applies for this Breathing Space can do so only once a year.
A mental health crisis Breathing Space is only available to a client who is receiving recognised mental health crisis treatment.