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Don’t let arrears or tenant disputes spiral out of control – try alternative dispute resolution

Landlord and tenant disputes can be tricky to navigate – and without expert legal advice, you risk leaving issues unresolved or taking action that could lead you to fall foul of the law.

The law is designed to protect both parties – and as a landlord, you must be aware of your obligations within the tenancy.

Failing to comply with these can lead to serious financial and sometimes even criminal penalties.

But what happens if your tenants fail to pay their rent or to adhere to their side of the agreement?

Facing off in court is often time-consuming and costly, so it is important to explore alternative ways of resolving a dispute before taking legal action.

Our Director of Commercial Property and Charities, Elizabeth Jennings, makes the case for alternative dispute resolution.

Alternative dispute resolution

Alternative dispute resolution (ADR) is a simpler way to resolve problems and disputes where parties cannot reach agreement but wish to avoid Court proceedings.

ADR is increasing in popularity such that there are now regulations relating to some ADR processes.

There are two main categories of ADR:

  • Imposed: The imposed ADR procedures occur when parties have to resolve issues by ADR under a contract or because of membership of an organisation where there is a binding requirement for ADR resolution procedures.
  • Voluntary: Voluntary procedures are where parties agree after a dispute that ADR is a suitable method of attempting resolution.

The simplest form of ADR is direct negotiations between the parties which can result in a solution to the problem.

However, if direct negotiation does not work, there are the following types of ADR procedures:

  • Conciliation or mediation: Conciliation identifies what each party wants to achieve from a solution and helps them to achieve that aim by agreement. If successful, this process results in a solution acceptable to all parties. Mediation focuses on the problem and proposes alternatives for resolving the problem. With both mediation and conciliation, the outcome does not prevent Court proceedings if an agreement is not reached.
  • Adjudication: An independent person examines the evidence of each party and makes a decision. This process does not usually prevent any party going to Court subsequently if not satisfied.
  • Arbitration: Arbitration is a more formal procedure. Most arbitration awards bind all parties. Overturning or altering an arbitration award by going to Court is only usually possible if the award is based on an error of law or the findings in the award are such that no reasonable arbitrator could have come to that decision.

Deciding which ADR procedure to pursue can be difficult. An experienced solicitor can advise you on which options are best for your specific circumstances.

Advantages of ADR

ADR presents several benefits to resolving the problem, for both you and your tenant.

Most importantly, ADR can be a lot less confrontational than Court proceedings. This helps to preserve a non-volatile, professional relationship between landlord and tenant once the dispute is resolved.

The process may be sufficient to resolve the entire dispute or certain aspects of it, reducing any later Court proceedings and making them less costly.

Additionally, most ADR is investigatory – the problem is researched and not simply determined on the basis of conflicting evidence produced by opposing parties.

Other benefits include:

  • Privacy: ADR is private, thus avoiding adverse publicity that could damage reputations.
  • Affordability: The cost may be cheaper than Court proceedings.
  • Determined process: The procedure for resolving the dispute, and the timescale for the procedure, can be fixed by reference to what the parties find convenient.

Finally, the range of achievable solutions from ADR is wider than Court proceedings.

Through ADR, you can reach a specific type of solution that both you and your tenant find acceptable, but which may not be possible from Court proceedings.

Disadvantages of ADR

While there are several benefits to pursuing ADR, there are risks that must be considered.

Crucially, ADR depends on co-operation. If you or your tenant refuse to participate, ADR will not solve the problem.

Furthermore, if you require immediate action – such as an injunction to protect ongoing physical or economic damage – then ADR is not appropriate.

If the time limit for making a Court claim is about to expire, ADR may not be appropriate as ADR does not prevent Court time limits running unless both parties agree to extend the limitation period to enable ADR to take place.

Additionally, a decision or award may still have to be enforced through the Courts once the ADR process is complete.

ADR also does not provide enforcement procedures if a party is determined not to abide by the ADR outcome.

Can ADR prejudice Court proceedings?

In general, ADR does not prejudice subsequent Court proceedings unless the terms of the ADR settlement prevent subsequent Court proceedings.

A benefit of ADR is that the process discloses facts and evidence from each party, meaning all concerned have a greater understanding of the issues involved. This means any subsequent Court proceedings may be simpler, shorter and less costly.

The ADR procedure can include a term which prevents any party from referring to anything disclosed in the ADR.

Seeking expert legal advice

Good, informed legal advice is appropriate before deciding how to resolve your dispute. This is especially so if your dispute is subject to time limits, or the merit of your claim is uncertain. Advice is appropriate during the ADR process itself on procedures, documents, evidence and strategy to ensure you achieve the best possible outcome

Whether your issue can be handled through ADR or requires legal action, instructing a solicitor is vital for ensuring that you achieve the best possible outcome.

At Mander Hadley, our expert landlord dispute solicitors can help you understand your rights and resolve tenant disputes.

If you are facing a dispute with your tenant, it is important to act quickly. Contact us today for expert advice and guidance.

Lorraine Walker

Solicitor – litigation and dispute resolution

Prior to qualifying as a solicitor, I worked within the education sector as a senior leader in a secondary school.