Tag Archives: Respite Scheme

Peterborough Landlords – Prepare For Debt Respite Scheme

At Just Lets Peterborough, we know landlords have a lot of regulations to comply with. We also know many factors impact landlords and tenants. We aim to provide you with as much valuable guidance as we can, and there is a scheme starting soon which might impact your business.

The Debt Respite Scheme, which is also known as Breathing Space, is set to come into effect as of May 2021.

The scheme will provide people who have “problem debt” the right to receive legal protection from being chased by creditors. This will apply to the rental sector, which means landlords and letting agents should be aware of how this affects them when chasing tenants for unpaid rent.

Be aware of two forms of breathing space on offer

According to information found on the Gov.uk website, there are two types of breathing space:

  • The standard breathing space
  • A mental health crisis breathing space

Any individual with problem debt can access the standard breathing space. This will provide them with legal protections from creditor action, and will remain valid for up to 60 days.

Government guidance states; “The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.”

The Government stresses the standard breathing space is NOT a payment holiday.

People looking to access the standard breathing space can do so in the following ways:

  1. Through an approved debt adviser registered with the Financial Conduct Authority (FCA)
  2. Through their local authority, if the authority has been approved to provide this level of advice to residents

Anyone who applies for “space” is not allowed to obtain this assistance more than once per year.

The mental health crisis breathing space is only available for people receiving recognised mental health crisis treatment.

Take time to familiarise yourself with these schemes

If you are a creditor, with the obvious example being a landlord who is owed arrears, and you are informed that a debt to you is a breathing space debt, you must immediately stop actions relating to the debt. The creditor is also expected to apply the protections and ensure that these protections remain in place until the breathing space concludes.

This is also the case if you are informed of a breathing space debt where you have sold the debt to another creditor. You must inform the creditor about that breathing space.

The Government advice states; “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.”

The Government has provided considerable guidelines on their website which can be accessed here.

The National Residential Landlords Association has analysed the guidelines and they believe there will be an impact on landlords where the tenant is in arrears.

The NRLA have released a statement, saying; “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.”

The NRLA have also said; “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 a breathing space. However, it is likely you would be able to come to an arrangement should you explain the situation.”

The NRLA concluded by saying; “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.”

If you are a landlord in or around Peterborough, and you need assistance in managing your rental property, we can help. We know these are challenging times for landlords, but there is a demand for rental property. When you need guidance in the local market, contact Just Lets Peterborough today, and we will be happy to help you.

You can find Just Lets Peterborough at 142 Oundle Road, Peterborough, Cambridgeshire, PE2 9PJ. Feel free to email us at peterborough@justlets.com or call us today on 01733 346255.