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Beyond Section 21: Step 1 Mediation

As part of their report, Beyond Section 21, The Lettings Industry Council (TLIC) proposes a four pronged approach that they believe must happen before Section 21 is abolished. Sean Hooker from the Property Redress Scheme explains all about step 1 below, a fully resourced mediation service.

Jaw Jaw is better than War War

To say that we are living in strange times is the understatement of the decade if not the century and will probably be unprecedented in our life time. Never has knowledge and information been so vital and powerful.

We already faced massive change to the private rented sector with a raft of other changes on the horizon, much of which will still take place and some a lot sooner than even the informed suspected.

Then there is of course Covid-19. This dreadful disease and the consequences that flow from it will have long and lasting effects and radically change the way we do business forever.

In the light of these events, the way people resolve their difference will need to dramatically change, increasing expensive litigation, the influence of social media and other virtual platforms and the rise of and thriving of identity politics, constantly forcing people to take sides and entrenched positions on almost everything, makes conflict and complaining easier than ever.

The value of mediation

To many people the term mediation is a bit of a woolly term and often misunderstood. This is partly due to the interchangeability of the word with other forms of dispute resolution but also that people do not realise how powerful it can be in reaching long lasting settlements and resolving disputes. The reason for this is that it’s you and the other party that are making the decision, no-one else and therefore it is a fast and very effective form of settling disputes and this in turn means less stress and ultimately cost to the parties

In 2015 Hamilton Fraser set up The Property Redress Scheme (PRS), incorporating the use of mediation and facilitated negotiation. The benefits of the measures have dramatically reduced the time it takes to resolve complaints and increased the satisfaction rates enormously. In 2019 over 50% of all cases they accepted were resolved by early resolutions and they have ambitions for this to increase.

Reform was on the cards

If the Government want to abolish the so-called ‘no-fault’ (there is always a reason) Section 21 notices, they need a fully resourced and fully functioning mediation service for landlords and tenants to resolve housing disputes.

So how does it work?

Using the Property Redress Scheme (PRS) as an example, their mediation service uses traditional mediation delivered by telephone, with a full mediation agreement and where appropriate a payment plan provided at the end of a successful outcome. They also provide a detailed report if the mediation fails or is only partially achieved and where the tenant fails to engage after a reasonable number of attempts. They also provide a full witness statement in a format acceptable to a court that evidences the landlord, or their agent, have tried to resolve the situation through a third party.

The method of resolution used is a formal style of mediation, a bit like ping pong, where the parties engage with the mediator separately and they act as the intermediary between the parties. Each side can share their concerns and needs, in confidence and trust the mediator with information they may be reluctant to share with the other side, without the stress and intimidation that having the person they are in dispute with present. This method has been proven to be the most effective way of getting a lasting result.

The results speak for themselves

Since mediation first started at the PRS, they have reached settlements with around 54% of the cases they have mediated over. This is clear evidence that the process works and for those that it has been successful in, the landlord and tenant are provided with a clear and comprehensive record of their attempt, which can be used if the situation ends up in court or the parties want to engage in the future.

Tales from the front line

So the proof of the pudding is in the eating and the following are real life situations resolved.

Case 1 The tenant had incurred four months’ rent arrears during lockdown. She was back at work, able to pay her normal monthly rent again, but needed time to pay the arrears. The landlord agreed that the tenant had previously been a model tenant but was adamant that rent arrears must be paid before the end of the fixed term. This meant a monthly contribution towards rent arrears that was beyond the tenant’s reach. The tenant was fearful that this meant having to move, which could cause a problem for her son who attended a special needs school and needed to remain there until the summer of 2021. They encouraged the tenant to think about whether there was an alternative source of funding, and this led to her finding a loan at an acceptable rate of interest. With the funds available to pay rent arrears immediately and in full, the landlord was encouraged to agree to a new fixed term tenancy until the summer of 2021. The tenant was then happy to pay the loan at a rate that was manageable for her and continue living in a place that her family really regarded as ‘home’.

Case 2

The tenant had to stop working during lockdown and fell into one month’s arrears. Although difficult, he was managing to pay their ongoing rent with savings and benefit payments. He was also ready to re-open their business (as a barber) when lockdown ended. He could not however stretch to catching up on the month’s arrears until then. The landlord had a 6-week deposit and knew the tenant well, who had never been in arrears previously. The tenant wanted to remain at the property when the current fixed term ended in early 2021. The landlord was encouraged to take a pragmatic view that gave the tenant a deadline to clear his one (and only) month’s arrears three months before the end of the fixed term; if he did the landlord would be willing to let them remain at the property. This worked well for both parties, helped preserve the goodwill in what had been a long term landlord-tenant relationship, and gave the tenant time and flexibility to get back on their feet.

This supports one of the four pillars in the TLIC Section 21 report. A fully resourced mediation service will reduce the number of disputes resulting in court proceedings before they commence and save both parties substantial legal costs.

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