Landlords are to be banned from contacting tenants over unpaid rent for 60 days as part of a new law primarily aimed at large lenders, My Property Box has revealed.
The Darlington-based lettings agency is raising awareness of the Debt Respite or ‘Breathing Space’ scheme, which comes into force on May 4, and is designed to offer those who have built up a ‘problem debt’ due to the pandemic legal protections from creditor action.
The government’s view is that it will provide those in debt the time to gain professional advice to help address their situation. Debtors can only apply for a breathing space by seeking advice from an FCA-approved debt advisor.
Ben Quaintrell, the founder and managing director of My Property Box, fears many landlords may be unaware and unprepared for the rule change.
He said: “While landlords are generally sympathetic towards tenants who may be struggling in these challenging times, landlords are also facing financial pressure as they still have outlays, including mortgage payments and costs involved with maintenance and compliance regulations.
“I want to highlight the Breathing Space scheme to landlords and urge them to take steps to guard against any potential loss in their income that could have a serious financial impact.
The new rules, which also covers people receiving treatment for serious mental health issues for an indefinite period, follows the introduction of the bailiff-enforced eviction ban, extended for a further six weeks until March 31. Under the extension landlords are required to give six months’ notice if they want to take repossession of their property.
Ben added: “I would urge any tenant who may be facing difficulties with rent to immediately contact their landlord or lettings agent to look at possible alternative arrangements that can alleviate the situation.
“Debt Respite is primarily aimed at major lenders, such as banks, but will have a wide-ranging effect on landlords. It may provide a brief interlude, but any rent arrears will remain and potentially grow even larger.
The National Residential Landlords Association has been pressing the government to introduce a hardship loan scheme to help tenants pay off any coronavirus-related rent arrears.
To support its landlords, My Property Box has added a 15-month rent guarantee scheme, that includes £100,000 worth of legal cover, to its Premium Tenancy Management Plan.
Ben added: “In the situation where tenants are unable, or refuse, to pay their rent, this provides reassurance to those landlords selecting that plan that they can continue to meet their own financial responsibilities.”