This article is a continuation of one published by my colleagues Jake Woodhouse and Niten Chauhan on 3 February 2021.
This article examines in slightly more detail how the Government Debt Respite (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 will affect landlords once the Regulations come into effect on 4 May 2021.
There are two types of breathing space: (a) a standard breathing space and (b) a mental health crisis breathing space.
Standard breathing spaces last for 60 days, but mental health crisis breathing spaces continue throughout the debtor’s mental health crisis treatment, plus 30 days once that treatment finishes.
During a breathing space, any pre-existing rent arrears cannot be pursued in the usual way. Accordingly (by way of non-exhaustive examples), landlords cannot do any of the following
· Contact the tenant about the debt
· Serve a section 8 notice on rent arrears grounds (8, 10 or 11), but a section 21 notice can be served
· Commence proceedings after serving a section 8 notice on rent arrears grounds (if the notice was served before the breathing space started)
· Commence any other legal proceedings relating to the debt
· Enforce a judgment relating to a debt covered by the breathing space if judgment was obtained before the breathing space commenced
· Add interest, fees or other charges during the breathing space.
Any legal proceedings claiming pre-existing rent arrears must be stayed. Interest, fees and charges are frozen and enforcement action is temporarily suspended. This is to provide tenants with temporary respite from their debts and may give them an opportunity to negotiate a payment plan or other settlement with their landlord and other creditors.
A breathing space will apply to all pre-existing rent arrears regardless of when the rent arrears were incurred.
Tenants are required to continue to pay their rent as and when it falls due during the breathing space and should the tenant default here, then the landlord can inform the Debt Advice Provider administering the breathing space. This could result in the breathing space being cancelled. In addition, new rent arrears will not be subject to the breathing space, so the landlord can, for example, bring a debt claim in respect new rent arrears accruing after the commencement of the breathing space.
Any action taken or notice served by the landlord in respect of a debt covered by a breathing space will be considered null and void.