This week the Debt Respite Scheme, approved by Parliament in October 2020, has come into force.
The aim is to help people who are in debt, which includes rent arrears, to help better manage finances, seek professional debt service advice and reach sustainable solutions.
The Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 pauses enforcement action from creditors, such as letting agents and landlords, and freeze charges, fees and certain interest on qualifying debts for up to 60 days.
There is also an alternative way into the scheme for people receiving mental health crisis treatment. A mental health crisis moratorium lasts as long as a person’s mental health crisis treatment, plus 30 days.
Property Manager, Joe Rocks, said: “This new piece of legislation is important and a good step for tenants or anybody suffering genuine hardship and struggling to keep up with their rent and bills. It is an opportunity to ring fence the debt and come up with a sensible plan to pay it back.
“Landlords need to be careful of contacting any tenants who have set up a Breathing Space otherwise they will face penalties. It is important to have good procedures in place to not fall foul of the new law.
“They also need to be mindful of a small number of the tenants who may try to take advantage of this situation to avoid paying the rent. This new piece of legislation is another example of why it is important to employ the services of a good managing agent to ensure compliance and to keep abreast of ever changing legislation that affects the private rental sector.”
A Breathing Space moratorium can only be accessed once every 12 months, but there is no limit to the number of times that an individual can enter a mental health crisis moratorium.