Letting agencies will have a major role to play in helping landlords and tenants understand and adapt to the government’s new Debt Respite Scheme, also known as Breathing Space, according to PayProp.
The legislation, designed to provide consumers in escalating debt with increased protection from creditors such as letting agents and landlords, aims to give tenants in arrears standard ‘Breathing Space’.
This should protect consumers from creditor action for up to 60 days, or a mental health crisis Breathing Space, which is available to people for as long as they are receiving mental health treatment, plus 30 days.
Neil Cobbold, chief sales officer at PayProp, commented: “Letting agencies must make sure they don’t ask tenants to pay debts during a Breathing Space or they could be reported to the Insolvency Service or a redress scheme.
“It’s vital that agencies are aware of how the legislation works and have the systems in place to be able to comply seamlessly in the event tenants are granted a Breathing Space.”
Letting agencies will play a key role in educating landlords about the Debt Respite Scheme, helping them to manage arrears while staying compliant.
Cobbold says that if landlords are made aware of the legislation, it will be easier for agents to explain to them why tenants aren’t being chased for unpaid rent during a Breathing Space.
He continued: “Agents can help landlords to understand what they can and can’t contact tenants about during a Breathing Space, what is expected of the tenant during the period, how long it lasts and what happens after it ends.”
“As well as making sure their own record-keeping is up to scratch, agents will also need to encourage landlords to keep accurate records.”
Comments (1)
Surely this is something for a property manager to educate their managed landlord on. Outside of this, it would be for a Let Only landlord to educate themselves, as harsh as it sounds that is the reality of why a landlord pays for management.
Lets not forget that should a letting agent give the wrong advice, they could become liable for any loss. It is not in an agents interest to “advise” anyone on anything other than the basics. An unpopular opinion I’m sure, but a necessary one to protect an agents own interests.