Breathing Space Legislation Central Housing Group

Breathing Space Legislation Effective From May

ARLA Propertymark is reminding agents about the controversial Breathing Space legislation coming into effect on May 4.

The new rules are known as the Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 – approved by MPs in the middle of the Coronavirus crisis, in October 2020.

They pause enforcement action on specific individuals from creditors – including of course letting agents – and have the effect of completely freezing charges, fees and certain interest on qualifying debts for up to 60 days.
There is a longer-lasting moratorium for people receiving mental health treatment. A mental health moratorium lasts as long as a person’s mental health crisis treatment, plus 30 days.

A breathing space cannot be started unilaterally by a tenant – It can only be started by a debt advice provider authorised by the Financial Conduct Authority to offer debt counselling, or by a local authority which already provides debt advice to residents.

An individual can have a Breathing Space moratorium only once every 12 months, but there is no limit to the number of times that an individual can enter a mental health crisis moratorium.

ARLA’s latest statement on the Breathing Space legislation issue, made on the association website, says that from May 4 letting agents – as well as landlords and other creditors – must pause enforcement actions when they are notified about a moratorium.

ARLA says: “Agents must also conduct a reasonable search of their records for any additional debt(s) owed to them by the debtor, as they may be eligible to be added to the moratorium. Creditors must decide what constitutes a reasonable search, based on their circumstances.”

Ahead of the scheme’s commencement, the government has announced that landlords should consider whether they need to make any changes to their systems and processes to comply with the regulations.

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