Mediation Services for Landlords
When you’re faced with a dispute with a tenant, it can be frustrating and your only thought is of court proceedings. There may be a way forward that doesn’t involve expensive proceedings, which could get to the root of the problem and save money in the long term.
What Are the Alternatives?There are several methods of alternative dispute resolution (ADR) available to landlords and tenants, and these have become more popular with the general public and the legal profession in recent years. Some courts now make it a requirement that parties try ADR - usually mediation, before a legal case can be tried in court. It makes sense when you think of the amount of work a court handles, the lower cost of ADR, the confidentiality and the ability to have more control over who decides the outcome of the dispute.
There are three general types of ADR, and these are negotiation, mediation, and arbitration.
Negotiation: When the parties are involved in negotiation, it’s voluntary and there is no third party involved who helps the parties to resolve the issues or decides on the outcome of the negotiations. In negotiation, it’s very much up to the parties involved to resolve the problems.
Mediation: Mediation involves a third party, called a mediator. This person will be impartial and has no decision making power – they are purely there to help the parties in coming to a mutually acceptable settlement. In the UK most ADR is generally referred to as mediation.
Arbitration: Arbitration is not used as often as Mediation but is still a good option for landlords and tenant, especially if they have reached a stalemate and think their differences are irreconcilable.
Disputes Over Security DepositsThe Tenancy Deposit Scheme (TDS) was introduced by the Housing Act 2004, and has given landlords access to ADR services for situations where a landlord and tenant disagree over the amount of deposit that should be returned at the end of the tenancy. If you can’t agree with your tenant about how much of their deposit they are entitled to have returned to them, you can use the free ADR services set up for this very purpose. This service is free of charge to landlords and tenants.
When there is a disagreement over security deposits, if the landlord and tenant both agree that they will use the ADR service to resolve the dispute they also have to agree to be bound by the decision. If the deposit is held in a custodial scheme, ADR is the best way forward to resolve any dispute over the deposit. The money will stay in the scheme until a decision has been made.
If the security deposit is paid into an insurance-based scheme, the landlord must agree to pay the disputed amount into the scheme until the dispute is resolved. The scheme administrator then divides the disputed amount according to any decision made by the ADR service - or if it can’t be solved by ADR, it will wait for a court's decision.
If you don’t transfer the disputed amount into the scheme when you’re asked to, then the scheme will pay the amount due to the tenant, following a court or ADR decision. The scheme will then recover the money from you.