Landlords will now find it harder than ever to claw back rent arrears and unpaid bills thanks to an update to the Breathing Space legislation – officially known as the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium).
Tenants now protected from further debt
The new announcement relates to people who are already in debt and for whom further interest and associated financial penalties would cause further hardship. It has been confirmed to LandlordBuyer that rent arrears is included in the list of qualifying debt.
Rent arrears recovery suspended
Why is this so important for landlords? If you are pursuing unpaid rent or are trying to recover money owed by tenants in any form, renters now have the right to legal protection for up to 60 days. Effectively, tenants in rent arrears can apply to have debt recovery action against them suspended for almost two months.
You may receive notification
The first landlords will know about this is notification from The Insolvency Service, issued after a successful Breathing Space application from a tenant. At this point, all enforcement, court action and charges pertaining to any rental debt must be frozen for the duration of the Breathing Space agreement. In addition, a Section 8 eviction notice cannot be issued for rent arrears (grounds 8, 10 & 11), adding to the already incumbent struggle to evict tenants.
Sadly, more tenants than ever will find finances difficult to manage and even the Government has admitted the scale of the issue. In fact, the Treasury estimates that up to 700,000 people in England and Wales could apply for the Breathing Space scheme in the first year of its operation.
Take action now
Self managing landlord need to ensure any Section 8 eviction notices issued include details of the Breathing Space debt scheme within the paperwork to be legally compliant. If you are in the midst of eviction, debt recovery or court action and receive notification from The Insolvency Service, you must suspend your proceedings.
Sell up, even with a Breathing Space order
When you are owed money, even 60 days is too long to wait to start or progress rent arrears recovery. LandlordBuyer can step in and purchase your buy-to-let, even if there is a Breathing Space agreement in place, a build up of rent arrears and tenants in situ.
If our cash offer is accepted, you will complete on the sale and receive money in your bank account within seven working days, if required. You’ll also be able to exit the buy-to-let market knowing the increasing amount of lettings legislation is no longer your concern.
If you hear from The Insolvency Service or have tenants in rent arrears, contact LandlordBuyer today and free yourself from the problem by selling to us.