Powers to set up the Moratorium were granted to MSPs under the Bankruptcy and Diligence (Scotland) Act 2024. Once implemented, these regulations will add a tool for managing rent arrears cases involving tenants with severe mental health challenges. By targeting relief to those who need it most and aligning with existing tenant protections, the Moratorium can provide timely help to vulnerable renters while maintaining fairness for landlords.
What is proposed?
The intention is to create a safety net for individuals in an acute mental health crisis that impairs their ability to manage debts. If someone meets strict eligibility criteria, focused on the most severe mental health conditions, they could be granted a protected period during which creditors are barred from chasing debts or initiating recovery proceedings.
In practice, this ’breathing space‘ would halt calls, letters, court actions, and enforcement related to the person’s debts. Rent arrears would fall under the moratorium’s umbrella, meaning a landlord could not pursue or enforce unpaid rent during the protected period. Interest and fees on debts would also be paused to prevent the situation from worsening.
Who will be able to benefit?
To be eligible, debtors must have a certification from a medical or mental health professional that they are severely unwell. Those already subject to a formal debt solution (such as bankruptcy or a debt repayment plan) are excluded to avoid overlap with existing support.
Propertymark agrees with the use of robust criteria and urges the Scottish Government to reject proposals to broaden them, cautioning that this would leave the scheme open to abuse and put pressure on medical professionals to make referrals.
The moratorium is intended to be temporary, lasting only as long as the person is in crisis. It will end when a doctor deems the individual has recovered enough to manage their affairs again.
During the moratorium, the individual is still expected to pay ongoing liabilities like their current rent to avoid accumulating new arrears.
Implications for evictions
A key question for letting agents is how the Moratorium might affect possession proceedings for rent arrears. The proposed rules would not stop landlords from serving notice or applying to repossess a property due to arrears.
Propertymark supports this approach, observing that Scotland already has strong safeguards against unfair evictions. For example, landlords must follow pre-action protocols before evicting for arrears, and the First-tier Tribunal must judge if an eviction is reasonable, given the tenant’s circumstances.
Measures in the Housing (Scotland) Bill will also require courts to consider delaying an eviction if carrying it out would harm the tenant’s health. Propertymark recommends that courts and tribunals be notified when a tenant under a Mental Health Moratorium is facing a rent-arrears eviction, ensuring the tenant’s health crisis is factored into decisions.
Clear guidance should also be developed to help landlords and agents handle cases where a tenant in arrears is protected by a Moratorium to ensure a consistent, compassionate approach, balancing the tenant’s need for respite with the landlord’s need to address arrears.
