Disputes between landlords and tenants happen often, though many are unnecessary and avoidable. By Martin Burns
Whether a tenant lives in a leased flat or house, or uses rented property as their business premises, they will want to exercise influence over the way in which they can use the property. They will want to have a say, for example, in the level of rent they will pay in the future. They will also want some control over such matters as service charges and the term of the lease. The landlord will want a measure of control over the same issues.
Landlords and tenants will no doubt continue to have conflicting interests. Landlords will want to earn as much rent from their properties as possible. Tenants will want to pay as little as possible. It is natural for landlords and tenants to have differing starting positions when it comes to their ambitions for the level of service charge or how the property is used. That they will have different opinions is normal and is to be expected. Unfortunately, and all too often, there are many occasions where the different aspirations held by landlords and tenants are allowed to escalate into tedious and expensive disputes.
And both parties will likely pay for it. Once a dispute starts, legal and other related costs spiral upwards, seemingly out of control. The price all parties pay is more than just financial. Disputes jeopardise personal and business relationships. They damage commercial reputations. Resolving disputes can be stressful, time-consuming and ultimately futile. The landlord and tenant may likely be informed of the progress of litigation or arbitration, but they will have little control over the proceedings and outcomes.
However, it is not inevitable that, while they have dissimilar goals, landlords and tenants should always end up engaged in disputes. There are pitfalls they can avoid.
• Proactively maintain communications
If a landlord and tenant cease to engage in open and candid conversation, they can easily allow a dispute to develop and thrive. When two parties, who disagree about something, stop talking, they effectively begin to build a void between themselves that can rarely be recovered. When this happens, communications between landlords and tenants become formalised and are conducted mainly through professional gobetweens, such as lawyers or chartered surveyors. Parties, often on the advice of their professionals, adopt entrenched positions. Before anyone knows it, third-party intervention via the courts or arbitration, becomes the only solution that will put an end to the dispute.
Meeting face to face, enables parties to keep in touch and informed. This is a key factor for avoiding disputes and resolving differences of opinion early, cheaply and amicably.
• Be bold, deal with emerging problems early and do not let things fester
It is surprisingly common for people to fail to appreciate that they need to act on a matter or that they should begin a discussion regarding certain issues, simply because they did not know they were pending.
An approaching rent review is a natural area for disagreement. Keeping abreast of timescales for reviews and addressing issues and potential problems at the earliest opportunity will make later discussions more constructive, less time-consuming and less likely to collapse in to formal disputes.
• Understand the terms of the agreement.
It is all too easy for landlords to use template leases and then discover something they do not like about the arrangement too late to do anything about it. Tenants will often sign leases without fully appreciating the extent of their obligations, again until it is too late. Landlords and tenants who properly understand their obligations under the terms of leases, are less likely to fall into dispute, and more likely to have informed and constructive discussions when issues do arise.
• Make records and document ongoing matters in writing
In the event of any emerging disagreement between a landlord and tenant, clear and accurate records of conversations and correspondence will inform their negotiations and give them a platform to achieve settlement without the need for escalation and referral to third party intervention. By formally documenting agreed matters, or any misgivings, landlords and tenants can focus their minds on the important matters that actually need to be settled between them. Documents and records should be specific and as accurate as possible, describing dates and any occurrences which relate to agreed matters or problem areas.
• Focus on the big picture
Once a landlord and tenant begin to disagree about something, it is all too easy for each of them to focus on the negative aspects of the situation and also on what they immediately want. For the most part, this is understandable. However, many landlord and tenant relationships are fairly long-term. By paying attention to the potential repercussions of how they deal with a difference of opinion now, both parties will your dispute may be felt further down the line.
Sometimes, even when relationships are relatively positive, and parties are in regular communication with each other, there will be some matter(s) on which they will fail to agree. Mediation is an excellent way of allowing both landlords and tenants to continue negotiating an agreed settlement of their differences whilst at the same time preserving individual interests and a sense of privacy.
The role of an independent mediator, who is an expert in the subject area on the which they are disagreed, is to facilitate a negotiated settlement on a basis that is acceptable to all parties. If the parties wish, a mediator can take a more pro-active approach and provide impartial evaluations on issues, which informs them and helps them to find a solution.
04 July 2019