No Respite for Landlords

No Respite for Landlords

13:56 PM, 25th January 2021, About 6 months ago 43

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The Debt Respite Scheme (Breathing Space) guidance was a shock to landlords when we heard about it this week. It is a truly atrocious bit of legislation, heaping even more worry and misery on landlords and also likely to have a very damaging effect on the prospects of any potential tenants looking for private accommodation who have any experience of mental health problems.

I have laid this out in an article this week, which I hope to get to the attention of the powers that be.  Hard cases make bad law: landlords, debt and mental health | TheArticle

The most egregious parts of the rules are the lack of any clear definition as to what constitutes a ‘serious’ mental illness and secondly the idea that someone facing a mental health crisis would be able to live rent-free until the crisis was over – however long this takes.

I have also laid out what this would mean for a landlord surviving on the state pension and the rent from one property. They could go from living on an income of £850pm to having to manage on £50. Of course, as we learned with the effects of Section 24, there will also be cases where they have to live on less than zero.

The worry for landlords unlucky enough to suddenly find their tenant is officially granted the ‘breathing space’ is going to be immense. It is of course already a common experience for landlords to suffer ill health because of their tenants.

Landlord, Bansi Soni, who was on dialysis and couldn’t sleep with worrying about her non-paying tenant said: ‘she’s still occupying my flat and currently owes me 11 months’ rent at £13,750.  The stress aggravated my physical condition which worsened the life-threatening infection I had and meant I had to be hospitalised.’

This was before this latest outrage.

Where is the consideration for or even acknowledgement of the financial and psychological strain that the Government is heaping on landlords?

What about landlords’ mental health? What kind of breathing space are we going to get? I think we all know the answer to that.



Comments

by Chris @ Possession Friend

17:41 PM, 1st February 2021, About 6 months ago

Reply to the comment left by Gary BTLowner at 01/02/2021 - 16:48
Yes. it does

by Ian Narbeth

10:04 AM, 5th February 2021, About 6 months ago

You may be interested in the webinar that Tessa Shepperson and David Smith gave yesterday.
Matters may not be as bad as they at first appear. In particular for the mental health breathing space to apply the tenant pretty well has to be sectioned. It won't just be a case of going to the doctor for a sick note.

by Chris @ Possession Friend

10:50 AM, 5th February 2021, About 6 months ago

Reply to the comment left by Ian Narbeth at 05/02/2021 - 10:04The Mental Health ( Unlimited ) Breathing space will apply to fewer tenants than the general free-for-all debtors, that is true.
Its also true that many ( but not All ) people suffering from mental health are only subject of treatment in a hospital setting for a limited period. 'Care in the Community' [sic] ensured that.
However the Mental Health moratorium continues for so long as the person is receiving ... 'mental health crisis treatment '
Like much of the low-grade legislation produced, 'treatment is not defined.
I don't think I read that Dr Beck was suggesting that any Tenant in arrears or other contract difficulties could go to their Doctor, say their 'heads in the shed' and get a valium prescription, thereby securing an indefinite moratorium.
But at the same time, with the lack of definition in these regulations, I am a little more concerned about the potential impact for landlords than some commentators.
Whilst this focus is on the potentially most harming, unlimited moratorium, many tenants in arrears will learn of this general 2 month free-from debt and frustrate the possession process and use it to secure one of the 'wipe your debt' vehicles i.e DRO, IVA or Bankruptcy. ( Just Google Debt, you will be flooded by how many and how easy it is ( already ! ) to write off debt.
I am also not at all reassured by the FCA registered status of the Debt Advisor ( I mean, has anyone dealt with the FCA, about as useless as the SRA )
A creditor can appeal a moratorium ! yes, but a Debt advisor has 35 days to answer that, leaving a creditor 25 days to get a court hearing !
Come on, lets be pragmatic, you can't get an answer from the court to your communication within 25 days, let alone a hearing.
The suggestion from the webinar subtly infers that Dr Beck's article here on 25/1/21 has over-stated the Mental Health moratorium implications for landlords.
The answer to that question, given the nebulous drafting of 'Mental health crisis treatment' clause isn't going to be known until the 'puddings been eaten' but I think it does a service to landlords as a 'heads-up'
What has been underplayed ( and to be fair, Dr Becks article was focused on the Mental Health moratorium ) is the extent to which Tenants will use the 2 months and various debt writing-off means to the disadvantage of landlords. There are already examples of tenants not 'missing a trick' when it comes to playing the system, ( when its designed so badly ) such as ADHT benefit supplements etc.
What is clear, not just from this legislation, but many others, including 'Renters Reform Act' abolishing Sec 21, is that Landlords need to insist on suitable #Guarantors. whether that be individuals or the Local Authority.
Interesting on terminology, I picked up, that the Renters reform Act is already with biased intent before its even been written.
Note, its not a Rent'ing' Reform Act, but a Renters' ( Tenants ) expect much of the conjoining of the word Landlords, with Tenants, such as the Coronavirus regulations but the benefits will be all one-way. Should help the Govt do some free ( for them, but at landlords cost ) 'levelling-up.'

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