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

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

Rightmove logo
Breaking News

Rightmove’s Weekly Mortgage Tracker – 01/07/25

Average rates for 2-year and 5-year fixed-rate mortgages   Term Average rate Weekly change Yearly change 2-year fixed 4.57% -0.05% -0.83% 5-year fixed 4.55% -0.04% -0.45%   Lowest rates for 2-year and 5-year fixed-rate mortgages   Term Lowest rate Weekly change Yearly change 2-year fixed 3.69% -0.13% -0.98% 5-year fixed 3.87% -0.01% -0.36%   Average…
Read More
Breaking News

Housing Insight Report Covering May 2025

Sales On average, there were around 11.5 homes placed for sale per member branch in May 2025. Lettings The average void period reported by member agents increased to just over three weeks in May 2025. We are seeing an average of 37% of housing transactions taking longer than 17 weeks to complete. The timescales are…
Read More
Breaking News

Rental Market Hotspots Drive National Growth

New analysis from FCC Paragon reveals modest national growth in rental demand across England in Q2 2025, up by 1.2% to 29.4%. However, this overall increase masks significant regional variation, with several counties experiencing substantial quarterly surges that are driving the market forward. The research shows that rental demand across England strengthened in Q2, up 1.2%…
Read More
Breaking News

Nationwide House Price Index for June 2025 – Thoughts from the Industry

Nationwide House Price Index for June 2025 shows House prices fell by -0.8% between May and June of this year. On an annual basis, the average house price increased by 2.1% although this rate of growth had slowed from 3.5% the previous month. As a result, the average UK house price now sits at £271,619.…
Read More
Breaking News

Clarity still needed on key areas in Renters’ Rights Bill

Ahead of Report Stage of the Renters’ Rights Bill in the House of Lords later today, 1 July 2025, Propertymark is urging the UK Government and Peers to amendment Bill, so it is fit for purpose. There remain long-standing concerns about the capacity and capability of the Courts, with the time from claim to hearing…
Read More
Cozy Pet Cat Tree Grey
Breaking News

Pet deposits only option following UK Government U-turn on Renters’ Rights Bill

Ahead of Report Stage of the Renters’ Rights Bill in the House of Lords which kicks off later today, Tuesday 1 July 2025, Propertymark is urging Peers to support an amendment that would allow for an additional pet deposit now that the UK Government has tabled amendments to remove pet insurance requirements. Since the introduction…
Read More