A trade body is warning that landlords may face a new challenge if, as expected, the government agrees a controversial expansion of the so-called Breathing Spaces experiment.
The initiative - formally called the Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 - was introduced shortly after the start of the pandemic. It pauses enforcement action on individuals from creditors including letting agents.
It freezes charges, fees and certain interest on qualifying debts for up to 60 days.
In these circumstances it means landlords must put on hold any action being taken in relation to rent arrears (including court action) for as long as the Breathing Space lasts; and a Section 8 notice cannot be issued for rent arrears (grounds 8,10 & 11) but can on any other available grounds.
Now, following a consultation, Propertymark says it expects the government to bring in Statutory Debt Repayment Plans from next year.
These would involve a certified debt advisor creating a repayment plan which on the one hand would provide reassurances that debts would be paid, but on the other trigger legal protections for the debtor.
Propertymark says the key factor - as yet uncertain from government statements - is whether the advanced breathing space agreements and Statutory Debt Repayment Plans would include rent arrears.
Timothy Douglas, head of policy and campaigns at Propertymark, says: “During these difficult times, it is essential that we find ways to support tenants who temporarily cannot afford to pay off debts including rent, while ensuring the solutions cannot be abused by those who have no intention of paying.
“When tenants, landlords and agents communicate effectively to resolve issues, we can prevent unnecessary evictions.
“The UK government needs to consider the risks associated with delaying housing debt payments, as this could impact the private rented sector and prevent people on plans to rent property.”
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