Jan

‘Breathing space’ debt scheme is NOT a free ride for defaulting tenants, says leading lawyer

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The new ‘breathing space’ scheme aimed at helping out those with rent arrears isn’t a free ride for defaulting tenants, warns a leading law expert.

Debt Respite Scheme regulations – which launch on 4^th May to cover most debt including rent arrears – aim to give people in debt a better chance to stabilise their finances during a 60-day moratorium on interest, charges and enforcement action while they seek help.

David Smith (picture, above), partner in the commercial litigation team at JMW Solicitors, says a moratorium isn’t there to simply delay the inevitable.

Free ride

He adds: “This is not a free ride for defaulting tenants. A section 21 notice can still be served and enforced against a tenant subject to a moratorium and so can a section 8 notice citing grounds other than arrears of rent.”

However, although he has heard of some tenants calling agents to say that the regulations mean they can’t serve a notice for rent arrears, he doesn’t believe most will use it to simply delay debt proceedings.

Smith adds that the scheme implies a need to have some degree of reasonable belief that a tenant will be able to enter into such an agreement.

He says: “Many tenants will not be aware of this option, will never become aware of it, and even if they were, will have no reasonable means of paying their debts anyway and so would not be likely to get a breathing space.”

Smith says under the scheme, tenants must still continue to pay their rent for their main home – and if they don’t, the landlord can apply to the relevant debt advice organisation to cancel the moratorium. If this is declined, they can then apply to the courts to ask for the moratorium to be ended or to allow legal action for eviction on the grounds of arrears to progress.

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