Breathing space debt moratorium and possession proceedings
Breathing space and mental health crisis moratoriums under the debt respite scheme prevent landlords and lenders from taking possession due to rent or mortgage arrears.
Rent arrears
Landlords must not:[1]
demand payment of rent arrears included in the moratorium
charge interest on rent arrears during the breathing space
Permitted contact
Landlords can contact tenants regarding other matters, including access for repairs, current rent, permitted legal proceedings, complaints or queries raised by the tenant. [2]
Landlord notices
Landlords cannot serve notice on an assured tenant on rent arrears grounds.[3]
Landlords can serve notice:
for reasons not related to rent arrears
under section 21
Landlords also cannot serve other notices for rent arrears, for example on introductory, secure or regulated tenants. This is a prohibited step to collect a moratorium debt.[4]
Where there is no requirement for the notice to give grounds for possession, landlords can serve notices during the moratorium but must not contact debtors about rent arrears included in the moratorium.
Mortgage arrears
Lenders must not:[5]
demand the payment of mortgage arrears included in the moratorium
charge interest on the arrears
Mortgage lenders can still charge interest on the mortgage principal. The mortgage principal is the outstanding amount minus the arrears.
Permitted contact
Lenders can give notices and statements regarding the arrears if required to do so under the Consumer Credit Act 1974 or Financial Conduct Authority Handbook rules.[6]
Possession proceedings during a moratorium
Tenants and mortgage borrowers are protected from possession claims based on arrears included in the moratorium. Debtors are also protected from enforcement of an order for sale based on a charging order.[7]
Landlords and lenders must not:[8]
serve a notice in respect of tenancy
start a possession claim against a debtor relating to a moratorium debt
take steps to enforce a possession order regarding a moratorium debt
If the deadline to bring an action including possession proceedings falls either during the moratorium or within the period of 8 weeks from the end of the moratorium, the time limit is extended by 8 weeks from the end of the moratorium.[9]
On-going court proceedings
Landlords and lenders must notify the court if court proceedings are underway when a breathing space starts.[10] Any action they take against debtors contrary to the breathing space rules is void.[11]
The court must ensure that any proceedings to enforce an order concerning a moratorium debt do not progress during the moratorium period.[12] This includes carrying out an eviction.
The court can enter a judgment or order in conclusion of a possession claim during the moratorium.[13]
Proceedings include:[14]
holding a hearing
making or serving a warrant or writ
instructing an enforcement agent to serve an order, warrant, or judgment summons
Breathing space moratorium
If the proceedings are against a debtor in a standard breathing space, the court must adjourn until the next available date after the breathing space ends.[15]
Mental health crisis moratorium
If proceedings are against a debtor in a mental health breathing space the court must adjourn the matter generally with a review for directions six months after the moratorium start date.[16]
Permitted proceedings
An action or proceeding that is pending in a court or tribunal can continue until an order or judgment is made in conclusion of the action.[17] That includes making a possession order on a claim that was issued before the start of the moratorium.
The court can send notices or correspondence to a debtor in relation to an action or proceeding.[18]
The court could grant permission to continue legal proceedings if they consider it reasonable and not detrimental to the debtor.[19]
Eviction during the moratorium
The tenant or borrower must not be evicted on the basis of a moratorium debt during a breathing space or mental health crisis moratorium.[20]
The landlord or lender must notify the court if an eviction is due to take place.[21] The defendant or their representative could also contact the court, to make sure it is aware of the moratorium.
A tenant or borrower who is evicted for a moratorium debt while they are under the moratorium protections can apply to court for a warrant of restitution to be granted access to their home.[22] They could also be entitled to claim damages.
Last updated: 24 January 2023