The pandemic has affected numerous tenants financially, leaving their landlords out of pocket, in most cases to the tune of thousands of pounds. Research has shown that it takes 51 weeks and £3,000 on average for a landlord to reclaim rent arrears or regain possession of their property through the courts. But there is a much quicker and cheaper way that also helps tenants in trouble – mediation.
The Property Redress Scheme tenancy mediation service launched right at the beginning of the pandemic and is designed to help landlords, agents and tenants resolve tenancy issues without the need to go to court. Since then, the service has helped hundreds of landlords and tenants resolve rent arrears, possession and tenancy issues.
Mike Morgan, Head of the Property Redress Scheme tenancy mediation service, takes us through some case studies, which demonstrate just how effective the service is:
Dave – a landlord with six months’ rent arrears gets his case resolved in two calls and two days
Dave, a landlord with over six months’ rent arrears, contacted us for help. He had been trying to find a solution with his tenant, who had stopped paying his rent six months ago when he lost his job, and was now over £4,500 in arrears. Dave had always had a long-standing and happy relationship with the tenant and could not understand why he was no longer responding.
We were able to get hold of the tenant, who agreed to take part in mediation. The tenant explained that he had been worried about losing his home and had been ignoring Dave’s calls. He had since found a new job but was still afraid that with this amount of rent arrears, and no savings to pay them, his days were numbered.
We were able to agree to a payment plan that Dave and the tenant were both happy with. The tenant committed to paying his normal monthly rent, plus extra each month which would clear the arrears in a little over a year. Dave and his tenant also agreed to review this every six months with a view to increasing the monthly arrears payment to clear the total more quickly, as the tenant got back on his feet.
Jane – a landlord who had been told by her solicitor she could not use mediation once she had served notice
Jane, a landlord with several months’ rent arrears, contacted us for help. She had spoken to solicitors who had advised her that notice periods were returning to pre-COVID levels from 1 October 2021. They also advised her that, despite this good news, it was still likely to take many months to get through the court process.
Jane had heard of our mediation service and mentioned this to the solicitors. They advised her that mediation could not be used once she had served notice on the tenant.
There is no truth to this. Mediation can be used at any time during a tenancy, regardless of whether notice has been served. Many landlords will serve notice and then offer the tenant the option of mediation. Serving notice first gets the tenant’s attention and shows that the landlord is serious. Equally, we also see landlords who use mediation before serving notice, as a softer initial approach – which is what Jane decided to do.
We were able to agree with the tenant that they would leave the property voluntarily on an agreed date. As an incentive to encourage this, Jane was happy to reduce the rent arrears owed by one month from £6,895 to £5,910. We produced a mediation agreement making it clear that if the tenant failed to stick to the agreed terms, the reduction no longer applied and Jane would be able to take legal proceedings, claiming the full amount owed. The tenant left the property and paid the balance of the reduced rent arrears as agreed.
Ian – a landlord with a ‘breathing space’ preventing him from chasing rent arrears
Ian, a landlord with two months’ rent arrears and a tenant with a ‘breathing space’, contacted us for help. We were not allowed to talk to the tenant about their rent arrears because they had a ‘breathing space’ – a new initiative that prevents creditors contacting their debtors – but we were able to talk to them about their future plans; when they thought they would be able to start paying rent again, and what that meant for them if they could not.
To cut a long story short, the tenant realised that staying in the property was only going to get them deeper in debt. Ian agreed to waive the rent arrears, and the tenant agreed to leave by the end of the month. Ian took the view that it was a small price to pay to get his property back, compared to what could end up in a lengthy court battle and mounting rent arrears.
You can use mediation too
If you have a tenant who is not paying the rent on time or is not paying full rent and the communication has broken down, contact us. By opening dialogue again and getting the ball rolling, we are sure we will be able to get you the outcome that you would like. Contact the Property Redress Scheme tenancy mediation service today and speak to one of our trained mediators, who will be able to guide you through the process. Alternatively, you can find out how mediation works with tenancy issues in our previous article.