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Breathing space for tenants

There are two variants of breathing space that can be granted.

  1. Standard breathing space 
    Is available to anyone with problem debt. It gives them legal protections from creditor action for up to 60 days. The protections include pausing most enforcement action and contact from creditors, freezing most interest and charges on their debts.
    Standard breathing space can only be applied for once in a 12 month period.

     
  2. mental health crisis breathing space 
    Is only available to someone who is receiving mental health crisis treatment. The debtor will require an Approved Mental Health Professional to certify that they are receiving mental health crisis treatment, this can then be provided as evidence for a debt adviser to start a mental health crisis breathing space.

    This breathing space has some stronger protections. It lasts as long as the person's mental health crisis treatment, plus 30 days (no matter how long the crisis treatment lasts). Unlike the standard breathing space, there are no limits to how many times a mental health breathing space can be triggered.

 

Although this new legislation may sound daunting, it is important to note that Breathing space orders will not be granted freely, only a debt advisor authorized by the FCA or a local authority where they provide debt advice to residents, will be able to authorize a breathing space order.


To obtain the breathing space order, the tenant must reasonably satisfy the advisor of their ability to pay the debt in full. In addition to this, during the breathing space tenants are still required to make their current rental payments. Therefore, the tenant will have to demonstrate that they will be able to prevent their debt increasing during the breathing space period.


Unless the debt advisor is satisfied that both of these criteria can be met, it is unlikely that the debt adviser will grant a breathing space order especially in such circumstances where there are excessively high rent arrears.

However, In the event that a breathing space order is granted, Agents and landlords can not:  

  • Charge the tenant interest or fees on the debt owed.
  • Contact the tenant for payment of arrears or discuss the arrears.
  • Joint tenants – if one tenant is granted breathing space you can not contact the other tenants. You must provide all the tenants the same protection.
  • Serve a Section 8 notice citing one of the three grounds for possession for arrears (grounds 8, 10, and 11)
  • Seek a possession order, should a possession order have already been granted, it cannot be enforced by a Bailiff or High Court Enforcement Officer (Sheriff).

 

Agents and landlords can:

  • Continue to contact the tenant about any other matters relating to the tenancy e.g contacting the tenant to arrange property certificates, maintenance, and property inspections.
  • Respond to the tenant should they contact you to make any inquiries about the debt owed.
  • Mediate with the tenant’s debt adviser.
  • Contact the guarantor in relation to the rent arrears and request payment from the guarantor during the breathing space.
  • Accept payments from the tenant concerning the arrears.
  • Serve a Section 8 notice on any grounds other than rent arrears.
  • Serve a section 21 notice.

 

It is possible for a creditor to request that the debt advisor review their granting of debt respite, should the landlord believe that the tenants have the means to pay the debt.
The creditor has 20 days to make the application to the debt advisor (with supporting evidence) it is the debt advisor who will then make a decision to continue with the debt respite or cancel it.


Should the debt advisor decide against canceling the debt respite, the creditor can then apply to the county court to have the case reviewed.

We along with some other agents did operate a sort of breathing space with some of our tenants during the pandemic before it was even a law. Some of our landlords agreed to reduce the rents temporarily whilst the tenant's finances were negatively impacted by covid 19.

Gassan Ojjhe

Office Manager

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