Property Redress Scheme has launched a tenancy mediation service for residential and commercial landlords, or their appointed letting agent, and tenants, to aid finding a resolution over issues which have arisen during a tenancy.
The service was in planning prior to COVID-19 but has been brought forward to support landlords and tenants struggling with the impact of the pandemic.
Current court cases have been suspended and the Government is urging landlords and tenants to come to agreements over matters such a rent payments.
This is likely to continue in the future as the Ministry of Housing, Communities and Local Government is working with the Master of the Rolls to strengthen pre-action protocol requirements and to extend this to possession claims in the private rented sector.
It will put an onus on all parties to negotiate and reach an agreement, rather than go to court.
Sean Hooker, Head of Redress for the Property Redress Scheme, said:
“Mediation is a voluntary, without prejudice, and confidential process, which allows disputes to be resolved much quicker and with less cost than court.
“As a landlord, it also enables you to demonstrate to the court that you have attempted to resolve your issues before coming to them.
“As an approved redress scheme, with extensive experience in housing matters, we are well placed to provide the expert help and assistance needed for successful outcomes.”
Furthermore, when the Section 21 possession process is removed as proposed, there will be even greater need for end of tenancy mediation to allow parties to move on without the need to go to court.
Should landlords have problems with future possession claims, use of a mediation service will demonstrate landlords’ readiness to engage with tenants through Alternative Dispute Resolution (ADR). PRS is authorised to provide the service under the ADR Regulations 2015.
Paul Shamplina, founder of Landlord Action and Brand Ambassador for Hamilton Fraser, added:
“Our recent survey found that 74% of landlords have already been contacted by tenants who are struggling to pay rent due to reduced or terminated employment resulting from the pandemic.
“With the reality that life will not return to ‘normal’ for some time, the most sensible solution is mediation, particularly as landlords will be unlikely to be able to gain possession of their properties for 6-9 months or more.”
Sounds like a great idea in principle, I’m not sure that it will get much take up when you consider the costs of the whole process being £120 to initiate it, £270 to mediate & £150 to draw up the legal agreement. The landlord could pay £390 only for the tenant to refuse to agree anything, having also wasted valuable time and still need to then go down the court route.
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‘Issues that arise during a tenancy’ – those should be dealt with by the agent. Rent issues are pretty black and white – it’s either owed or not. If, by mediation they mean that the landlord agrees to write off some money – again, the agent should have investigated mitigating the court costs against money owed before the relationship breakdown.
The cost of the service are about the same as going to court anyway – as Anonymous says, likelihood you’ll end up there anyway
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We appreciate all feedback on the service. It provides a three step approach, with each cost only being incurred if the case proceeds to the next stage. Cases will only progress past instruction stage if both parties agree to mediate. In our experience where this happens the settlement rate is over 70%. If the matter does not proceed to a full mediation or settlement the landlord should have complied with the soon to be released pre action protocol without paying the full amount. If it does proceed hopefully the savings to a landlord in preventing lost rent, court fees and the associated time and stress will prove excellent value based on the cost of the service. Even if the full cost is incurred the vast majority of cases will not exceed £540 (inc vat). This includes the instruction, mediation and a drafted settlement agreement. Tim Frome. PRS MD
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Mediation sounds like a good idea and in normal commercial disputes it is. This is because both parties have something to lose. However landlords are involuntary creditors. If tenants fail to pay, landlords of residential property are required by law, under extremely severe penalties, to continue to provide the service the tenant is not paying for until the tenancy is ended. It may be ended by agreement or a court order. The problem with mediation in PRS disputes is that it delays the landlord going to court. The longer the process goes on, the longer the landlord has to wait until he can be sure of getting his property back. The tenant has no “skin in the game” as they say. He can sit back, spin the process out and thereby put pressure on the landlord. Even if agreement is reached that the tenant will leave on such and such a date it is not, absent a court order, binding on the tenant. Unless the tenant has assets or a well-paid job the landlord faces substantial arrears. Paul Shamplina may be correct that, at present, landlords will be unlikely to be able to gain possession of their properties for 6-9 months or more. Thus it might seem that mediation is a good option. Sorry, but I disagree. Mediation is a Trojan Horse. I fear that after the lockdown and when life returns to normal it will be made mandatory for landlords. Landlords have been pressing for speedier court decisions as a quid pro quo for abolishing s21 evictions. I am doubtful Government will deliver as that will require extra money. Mediation will offer a way for the Housing Minister to proclaim that he is doing something. Having to go through mediation first will add weeks to the process. Also given the way the law of residential tenancies works, tenants may be able to complain at the door of the court that the landlord did not mediate properly. The Parliamentary draftsmen have a habit of putting obstacles in landlords’ path (which is why s21 claims are so fraught). I can very well see that if the landlord slips up in the minutest degree over the mediation his case will be thrown out when he gets to court and he will have to start again. (Hell, they might even provide for landlords to be fined!) This may apply even to simple debt claims where there really is nothing to mediate. If landlords are willing to forgive some of the rent arrears (and in current circumstances many will do so to help their tenants), that is their decision. However, landlords should not be pressured to do so and mediation will apply that pressure. Landlords should think very carefully before opting for mediation.
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