When is Rent Arrears not Arrears? When it is a Moratorium Debt!

January 27, 2021

From 4 May 2021 landlords, in common with others owed money by individuals living in England and Wales will need to consider the effect of debt moratoriums. The new Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 come into force as from 4 May 2021 and will apply to most debts accrued before or after that date include arrears of rent. Any person who is in debt can seek a debt moratorium from an approved debt advice provider.

David Smith, partner in the commercial litigation team at JMW Solicitors says, “During a moratorium a debtor or tenant in arrears cannot be contacted to seek payment of the debt subject to the moratorium and cannot be asked to pay any part of that debt, any interest on it or any fee or cost created by it. They also cannot be served with a section 8 notice citing one of the three grounds for possession for arrears (grounds 8, 10 and 11) or the equivalent notices in Wales under the Renting Homes (Wales) Act 2016 (when it comes into force).”

David continues, “However, 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. In addition, it is an absolute requirement of a debt moratorium that a tenant benefitting from it continues to pay their rent for their main home. Failure to comply with the obligations of a debt moratorium, such as ongoing rent payment, permits a landlord to apply to the relevant debt advice organisation for cancellation of the moratorium and if they decline, to the courts to ask for the moratorium to be ended or to permit legal action for eviction on the grounds of arrears to progress. However, the main factor that will also lead to this not being offered in all that many cases is that there must be an overall ability to actually clear the debts. A moratorium is not there to simply delay the inevitable.”

EAN Breaking News

Breaking News from the team at Estate Agent Networking. Have a new story to share with us? Then please get in contact today! When and where we can we will refer to third party websites with a 'live link back' where news was released first.

You May Also Enjoy

Letting Agent Talk

The pros and cons of renting to students: is it the right choice for you?

Student properties are no different in term of quality and facilities than any other type of private rental. And although landlords may have to spend a fair amount on setting up and properly maintaining student lets, they can also charge a good market rent. To help you decide whether letting to students might be worthwhile…
Read More →
Finance

Autumn Budget Misses Mark on Housing Reform: UK Rental Market Squeezed by Shortages and Rising Rents

The UK rental market faces mounting pressures, with a recent Rics survey revealing a critical shortage of properties and surging rent prices. Landlord instructions, a key indicator of properties available to rent, fell to a net balance of -29%, marking this the lowest level since 2021. Strong tenant demand is driving rents higher, with 33%…
Read More →
Estate Agent Talk

Save a house deposit faster than ever in THESE areas!

Save a house deposit faster than ever in THESE areas! Aberdeen City in Scotland is named the best place to live if you want to save for a house deposit fast, saving in as little as a year and a half Inverclyde is second, whilst Burnley is third Average salaries and house prices in each…
Read More →
Estate Agent Talk

Finding Your Dream Home: Expert Advice from Camberley’s Top Estate Agents

Finding the right estate agent is crucial when navigating the competitive housing market in Camberley. With local expertise and in-depth market knowledge, these professionals can guide you toward your ideal property, saving you time and effort. Their understanding of the area’s nuances, from property trends to community relationships, positions them as indispensable allies in your…
Read More →
Breaking News

Zoopla reveals most affordable towns in Britain

With the average home valued at nearly four times average household incomes, Zoopla reveals the most affordable towns in Britain   An average property in Britain is valued at 3.8 times the average annual household income (assuming 2 full-time workers) Cumnock in Scotland, is Britain’s most affordable town to buy in 2024 with average property…
Read More →
Software & Tech

The Evolving Nature of Real Estate and Strategies for Agency Success

Real estate agents are used to working with fluid market dynamics. Adapting their sales strategies and responding to new industry demands is almost second nature to most agencies today. However, while making the necessary adjustments when following housing market trends is important, it’s also important for agencies to consider new business innovations that become available…
Read More →