The introduction of The Debt Respite Scheme (also known by its more catchier moniker of the Breathing Space Moratorium and Mental Health Crisis Moratorium) at the beginning of the month.
Under these new regulations a person in debt can seek a moratorium from an approved debt provider.
These new regulations change the way that property managers can manage their arrears, and therefore it is worthwhile reading up on these changes, just to make sure that your accounts team understand how their communication with tenants around late rent payments will change.
A standard breathing space will give the tenant a period that can last up to a maximum of 60 days. A mental health crisis breathing space, ends 30 days after any treatment finishes.
Crucially, once the breathing space period has started, no enforcement action can take place against a tenant or anyone who is jointly liable with them for the debt or payment due.
So, what does this mean for letting agents and property managers?
Whilst these new regulations will have an impact on the industry, handling this correctly will make sure that this is managed correctly. Communicating this to your landlords will also be important, being able to manage their expectations as things progress.
Ultimately, if a tenant has applied for Breathing Space, then either you as the managing agent or the landlord will be notified by the Insolvency Service. This means that you will have to place any action in relation to rent arrears on hold to include court action, for the entire period of the Breathing Space. In addition to this you will not be able to serve a section 8 nothing for rent arrears, but you can still do so for any other applicable grounds.
When it comes to serving a Section 8 notice, you must now include details of the Breathing Space Scheme and a new Section 8 form has been published which replaces previous versions and all previous versions will be invalid.
As ever, our systems make it easy for you to manage arrears and communicate with your tenants and as long as there is friendly and helpful dialogue with your tenants, hopefully payment plans, and arrears can be kept under control without the need to escalate matters.
