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News: Large number of tenants eligible for controversial Breathing Space - claim

Fri, 11 Jun 21

A large number of private rental tenants may be eligible to take advantage of the new and controversial Breathing Space debt respite scheme.

That’s the view of a leading lawyer - Stephen Burke, senior associate with Taylor Wessing - who writes on a company blog that this may be frustrating for private landlords.

Since early May the Breathing Space concept, formally known as The Debt Respite Scheme, has given those with 'problem debt' the right to legal protections from being chased up by creditors. As this applies to the rental sector, it is likely to protect tenants from being chased up by landlords or their letting agents. 

There are two types of breathing space - a standard breathing space and a much more tightly-prescribed mental health crisis breathing space. 

Burke writes: “While the threshold required to qualify for a mental health crisis breathing space moratorium is high and therefore unlikely to be abused, there may be a large number of residential tenants who could be eligible for a standard breathing space moratorium as a result of the pandemic.”

He says that while this may be good news for tenants who believe they require more time to settle any rent arrears owed, it could simply be prolonging the inevitable for landlords.

“This is because it is likely to result in a delay to any process required to obtain possession of its property and/or recover some of the rent arrears owed” Burke states.

And he continues: “Landlords have already been affected by longer notice periods before being able to obtain possession of their property, a stay on possession proceedings and a ban on evictions. It is yet to be seen whether this additional measure will provide enough protection for tenants or simply result in a further hurdle for landlords.”

 

 

Landlord creditors will be notified if a tenant debtor has been granted a standard or mental health crisis breathing space; landlord creditors can then access the breathing space register which will confirm details about the tenant debtor, including how much is owed to the landlord creditor and when the moratorium starts and ends.


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