Disputes between landlords and tenants can be sparked by all kinds of problems that become the catalyst for much wider issues that affect not just their financial position but also the mental health and wellbeing of all parties involved.
No landlord wants the headache of late payments, managing property damage or dealing with anti-social behaviour and tenants equally, do not enter an agreement with the sole purpose of seeking conflict.
Any such conflict will inevitably mar the renting experience but these things can and do arise during a tenancy for a variety of reasons ranging from poor management, tenants inability to manage their own finances or issues with neighbours that are not always what they seem.
But it doesn’t have to be this way.
Resolving disputes the old-fashioned way using Alternative Dispute Resolution (ADR) to talk, to mediate, can make the difference between an increasingly hostile situation or de-escalating the dispute and finding an amicable solution.
A bit of background
Over 15 years ago, the Law Commission was given the task of examining existing housing law and practice with a view to developing recommendations in the key areas affecting the relationship between landlords and tenants.
It submitted its report in 2008 to the then Lord Chancellor and Secretary of State for Justice, the Right Hon. Jack Straw. The Commission discovered significant dissatisfaction with current procedures and enthusiastic support for the process of alternative dispute resolution (ADR).
Alternative Dispute Resolution (ADR) is a way to settle disputes without litigation
Using ADR procedures can avoid the acrimony that often accompanies extended disputes and allows parties to understand each other’s position and craft their own solutions.
Some disputes can be conclusively settled if the parties agree to a regular routine of property inspections as well as the inventory carried out at the start, and check out report completed at the end of a tenancy.
Disputes are not always so easily settled by reference to verifiable material facts, however, and often involve sharply opposing opinions and perceptions of reality. One of the key reasons why property reports should be carried out by third party, independent inventory professionals is that they are able to remain impartial and reduce the negative emotions often associated with parties in dispute.
Whether during the lifetime of the tenancy or – as is commonly the case – at the end, when the argument tends to focus on the return, withholding of or partial retention of the tenant’s deposit, an efficient form of resolution is frequently needed.
The result of any process may depend on compromise, which usually means that neither party gets everything they want but often just enough to satisfy them that a reasonable and potentially fair conclusion has been reached.
Adversarial legal system
The law has often been seen as a long term barrier to reasoned negotiation, but it appears that the climate is changing as we all seek to find compromise rather than conflict. The private rental market is a perfect environment to apply these more enlightened techniques to the management of deposits disputes.
As a result of the Law Commission report, it has become part of government policy to support and promote the machinery of ADR. This is very much in line with current attitudes, which are leaning away from litigation and towards mediation.
The ideal position is for a tenancy to contain a mechanism that will trigger ADR within its terms. This means that if a dispute should arise – usually, but not exclusively, regarding the return of the deposit – any impasse will automatically lead to the ADR service. By getting all parties talking early on, a dispute can be quickly averted.
Even if this route is not prescribed in the contract, it remains an option to either party to pursue as an alternative to literally butting heads over the disagreement however the difficulty arises when one party will not submit to its jurisdiction so all options to resolve a dispute must be on the table.
ADR is voluntary
It’s powers can be imposed in only limited circumstances, such as when one party is effectively ‘missing’ from the process or overly uncooperative; otherwise, a lack of consent means the dispute will end up in the courts.
This is rarely the best solution. For one thing, although one of the parties may ‘win’, there is still the significant matter of costs. A court may find liability to lie with one party but simultaneously express disapproval of the two parties’ conduct by apportioning costs to both.
Court proceedings are expensive and a win may not look like one once the cost is counted. Furthermore, no landlord relishes gaining a reputation for litigiousness, as it is simply bad for business.
Avoiding disputes is the best solution
This means having a clear idea, early on, of who is responsible for what and managing expectations of condition and cleanliness throughout. This relies heavily on an detailed inventory, effective property management and maintaining open channels of communication for the duration of the tenancy.
When a tenancy ends, or if a problem occurs during its course, the best way to solve disagreements is by:
Keeping discussions friendly is paramount, as any sense that one party is taking advantage of the other will sink all efforts to resolve the dispute. Entering into the process in good faith and seeking only a fair outcome is the way to receive the angst.
If ADR becomes unavoidable, a tenant usually has three months to raise an objection to the landlord’s actions. An adjudicator will listen to submissions from both parties, review all the evidence, and reach a binding decision without solicitors, barristers, ushers, recorders, magistrates, court time or court costs.
The available monies (deposit) at the heart of the dispute will then be distributed according to the decision, which can take up to 28 days.
Quality of evidence is crucial
Although oral and personal testimonies are welcomed, the procedure is ultimately one based on factual evidence.
Documentary evidence is most commonly uploaded online, which further simplifies the procedure. A signed tenancy agreement, check-in and check-out reports, interim inspections countersigned by the tenant, photos, videos, invoices, receipts, estimates and correspondence – this will all be taken into consideration, if provided.
Of these three levels of action – the courts, ADR and just conversing with all parties – we would always recommend the last of the three.
Whilst court proceedings can settle monetary matters, they may leave a lingering and somewhat bitter sense of grievance whereas an informal discussion between the landlord and tenant may achieve a better and, often more palatable result rather than one that has been drawn out through the courts leaving at least one party feeling aggrieved.
Using ADR also has the advantage of being a low cost option but the most abiding quality of ADR is its ability to deliver fairness through a thorough, thoughtful and, more importantly, inclusive and transparent process.
At Inventory Base, we know and have witnessed the effectiveness of ADR.
Ultimately, it is the responsibility of all parties to come to a mutually agreeable solution when it comes to disputes but with the burden of proof levied at the landlord to prove their case.
We have designed our property management and reporting software to promote and support the certainty and ultimately, the mutual agreement it can offer by providing customisable templates and responsive software to help you capture all the required evidence efficiently without losing any of the detail.