Hello Property Investors,
This piece of news came across my desk last week and it is something that I thought would be extremely valuable as the courts struggle to cope with a tremendous backlog of evictions due to the challenges brought about by the pandemic.
I read one article which said that the backlog is as much as 20,000 evictions across England & Wales, so it’s probably no surprise that the Government is looking for alternative ways to resolve the issues.
I’m actually a big fan of mediation (Alternate Dispute Mediation (ADR)) and regularly work with Resolution People should the need arise. So, what has changed and what does it mean for landlords?
Well, the first thing to say is that ADR is not (yet) mandatory. However, an official report published earlier this month by the Civil Justice Council has concluded that parties can lawfully be compelled to participate in ADR and this includes landlords.
The report was commissioned by the Master of the Rolls Sir Geoffrey Voss and it is expected to now pave the way for new regulations to make it mandatory for landlords and tenants involved in contested evictions to enter into mediation prior to presenting a case at court.
It would not surprise me if this would be at the expense of the landlord, however, mediation can prove to be cheaper and more time effective than the full evictions process. In the event where a compromise just cannot be reached, however, it could end up taking longer and being more expensive!
So, what is mediation? Well, mediation is simply the introduction of a neutral third party to a dispute to reach a balanced compromise that works for both parties. Much like marriage counselling, ADR makes a big difference where both parties may need to continue communicating in the future (such as in the case of rental arrears that subsequently get cleared).
Resolution People has a handy diagram that illustrates how ADR works and I have included it below.
Essentially, this means that landlords will have additional regulations to follow when needing to evict tenants and whilst ADR may prove helpful in many cases (with the PRS giving an average of 10 working days to reach a resolution), where no resolution can be sought it could cause the evictions process to be extended.
Being Medway’s leading HMO agent, I find that ADR is particularly helpful as several different, unrelated people living in the same property can present some unique challenges.
For example, there may be one tenant who has stopped paying their rent because they have lost their job and following an evictions process could cause a ripple effect amongst other housemates. ADR could, for example, resolve the matter by working with the tenant to help them apply for housing benefits whilst looking for alternate employment.
In another event, there may be one tenant who leaves early for work and takes a shower at 3am each day, then pinches food from other tenants’ sections of the fridge. Seemingly minor things such as this can really cause big issues such as multiple tenants moving out and ADR can often help where direct involvement is unable to resolve the issue.
As Medway’s leading HMO agent, there are three main reasons that I am a big fan of ADR, and these are how it:
- Helps preserve the relationship between landlord and tenant or tenants themselves in the case of an HMO
- Demonstrates that landlords have been reasonable in trying to resolve matters
- Is often cheaper and quicker than following a litigation process
- It could prevent tenants from leaving unnecessarily and therefore preventing lost revenue due to voids
As I said earlier, mandatory ADR is not yet the law, however, something I certainly feel is coming. It could be one to watch out for in the next Queen’s speech!
If you have an HMO where you have a non-paying tenant or simply a challenging situation amongst tenants, then I will be more than happy to help and advise. Just reach out to me through LinkedIn and I will be more than happy to book a call.