The Breathing Space Moratorium

According to May 2021 statistics between 6% to 7% of private renters are estimated to be in arrears,

which is around twice the proportion of an average year before the pandemic. The Government have had to step in to protect private renters.

Launched on the 4th May 2021, the Government have introduced a Debt Respite, or ‘Breathing Space’ policy which prevents Landlords from serving notice, or evicting a tenant, due to rent arrears for a period of 60 days, whilst the tenant sources a long-term debt solution. The regulations which introduced the measure are the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.

Tenants can apply for the Debt Respite Scheme for issues related to debt or mental health. This article will exclusively look at the debt related (or standard) breathing space policy.

What are the requirements?

Tenants can only access the standard breathing space policy from a debt adviser once in a period of 12 months.

The tenant must live in England or Wales and have a qualifying debt which includes rent arrears, credit card debts, personal loans and council tax arrears.

They must also not have had a debt relief order, individual voluntary arrangement, an interim order, or be an undischarged bankrupt at the time they apply.

When will the breathing space start/end?

The breathing space starts the day on which the tenant’s details are put on the electronic register and will generally end 60 days after this. However, it can end earlier if the debt adviser or Court cancels it or if a tenant dies during the during the breathing space period.

Importantly, after the policy ends, all debts are still owed - including those covered by the policy and any new debts which became due during the respite.

Can it be refused or cancelled?

All applications have to be considered by a debt adviser, but the debt adviser will only approve the policy if they assess that the tenant is unlikely to be able to repay their debts, and that in their circumstances there is not a more appropriate solution to their financial situation.

If the tenant does not pay their ongoing liabilities, if they are found to have a debt solution in place, or if they have not been communicating with their debt adviser - their standard breathing space can be cancelled.

What can Landlords do/not do during the Breathing Space?

Landlords must actively stop any enforcement or recovery action they may have appointed related to the rent arrears.

They are further prevented from contacting the tenant to request repayment of that debt (unless there is specific permission from the court). Landlords can only contact the tenant for matters not related to the breathing space debt or if the tenant specifically asks to discuss a breathing space debt or debt solution.

Landlords are however permitted to seek possession on other grounds not related to mental health or debt, for example: anti-social behaviour. The breathing space policy does not stop the section 21 eviction process for assured shorthold tenants.

Full guidance for Landlords from the government can be found here

Written by Elaine Bathers and Semiha Ozbay