What is mediation in a landlord-tenant context?

Mediation is a structured process where a neutral third party, known as a trained mediator, helps landlords and tenants resolve disputes without resorting to formal court action. It is a voluntary process designed to encourage constructive dialogue between the parties, aiming to reach an agreement that works for both sides.

Common issues addressed in mediation include rent arrears, disputes over property repairs, disagreements about tenancy deposits, and other concerns linked to the rental agreement. The mediator does not impose a decision but facilitates discussions, creating an environment where both parties can voice their concerns and explore solutions.

What is the mediation process?

The mediation process often begins with an assessment meeting, where the mediator determines whether the dispute is suitable for mediation and sets expectations for how the sessions will proceed. This initial step helps establish the framework for the first mediation session, where the discussion begins in earnest.

If the dispute is not fully resolved during the first session, subsequent mediation sessions may be scheduled to address unresolved issues. The whole mediation process is flexible, allowing the mediator to adapt to the specific needs of the case while maintaining a focus on reaching a mutual agreement.

How are mediation costs determined?

The cost of mediation varies based on several factors, including:

• The complexity of the dispute: more intricate cases may require additional time, which increases costs.
• Session duration: mediation is typically charged by the hour or session, so longer disputes may incur higher fees.
• Mediator's qualifications: costs can vary depending on the mediator’s experience and expertise.
• Regional variations: mediation costs often differ depending on where the service is provided in the UK.

For private mediators, landlords can expect to pay between £500 and £1,500 for a day’s session, though shorter sessions may be less expensive. Government-supported schemes, such as the Housing Possession Mediation Service, may offer free or lower-cost options for eligible cases.

Who pays for mediation?

There are no strict rules regarding who covers the cost of mediation in landlord-tenant disputes. The responsibility is typically agreed upon by the parties involved, often reflecting the nature of the dispute and their willingness to work towards a resolution.

Common arrangements

• Shared costs: landlords and tenants frequently agree to split the mediation costs equally. This approach recognises that both parties benefit from resolving the dispute through the mediation process, avoiding the higher expense and stress of court proceedings.
• Landlord covers costs: in some situations, landlords may choose to pay the full cost of mediation sessions, particularly if they initiated the process or are keen to expedite a resolution. Covering the costs can also demonstrate goodwill, which may encourage cooperation from the tenant.
• Tenant covers costs: while less common, tenants may agree to bear the cost if the dispute directly relates to their actions, such as unpaid rent or breach of tenancy terms. In these cases, it is advisable for landlords to confirm any agreements in writing to avoid future misunderstandings.

Factors that influence cost-sharing agreements

The willingness to share or take on mediation costs often depends on the relationship between the parties, the complexity of the dispute, and the perceived benefits of mediation. For landlords, discussing cost-sharing arrangements when proposing mediation can help establish clear expectations.

Access to legal aid

Tenants with low income may be eligible for legal aid funding to help cover the cost of mediation sessions, depending on their financial circumstances and the nature of the dispute. Legal aid can reduce the financial burden for tenants by covering the initial session and other costs for subsequent mediation sessions, making the process more accessible. This support can be particularly beneficial in cases where tenants may otherwise struggle to participate due to financial constraints.

Mediators who offer legal aid and hold a legal aid contract can assist in such situations. These mediators are experienced in working with cases where legal fees may be partially or fully funded, providing clarity on costs and helping both parties access the services they need to resolve their dispute. Landlords working with such mediators may find it helpful to liaise with them early in the process to clarify any questions related to funding or eligibility.

Legal and practical considerations

Landlords should be aware of any legal implications of mediation costs:

• Pre-court mediation requirements: in some situations, mediation may be a recommended or required step before pursuing court action. For example, the Housing Possession Mediation Service is designed to address disputes related to rent arrears.
• Tenancy agreements: some tenancy agreements may include clauses about dispute resolution, including mediation costs. Reviewing these clauses can help clarify financial responsibilities.

Benefits of mediation for landlords

Mediation can provide landlords with several practical advantages when resolving disputes with tenants, offering a more constructive and efficient approach compared to formal legal proceedings. Below are some of the benefits mediation can bring:

Reduced costs

Mediation is generally more cost-effective than pursuing court proceedings. Even when a landlord covers the entire expense of the mediation process, the overall costs are usually lower than legal fees associated with court action. This makes it a practical option for resolving disputes, particularly for those looking to avoid the financial burden of extended legal processes.

Faster resolution

Mediation typically resolves disputes much more quickly than the court process, with many cases concluding in a matter of days or weeks. By avoiding the lengthy timelines often associated with court hearings, landlords can address disputes promptly, reducing the disruption to their rental income or property management plans.

Preserving relationships

For landlords with tenants who are expected to remain in the property, mediation provides an opportunity to resolve disputes without damaging the landlord-tenant relationship. The collaborative nature of the mediation process encourages open communication and mutual understanding, creating a foundation for continued cooperation.

Mediation offers landlords a practical and efficient method for resolving disputes, helping to minimise costs, save time, and maintain positive interactions with tenants where possible.

What happens if mediation fails?

If mediation does not lead to an agreement, landlords may need to escalate the dispute through formal legal channels, such as a court hearing. Although mediation is often a cost-effective and cooperative way to resolve issues, some disputes cannot be settled amicably. In these cases, the court process becomes the next step for landlords seeking resolution.

Costs and implications

It’s important to note that mediation costs are not usually recoverable through the courts. However, the fact that a landlord made an effort to resolve the matter through mediation can reflect favourably in legal proceedings. Courts often view a willingness to mediate as a constructive approach, which may positively influence the outcome of the case.

Preparing for court

Before initiating court action, landlords should review the steps they have already taken, including any mediation attempts. Keeping detailed records of the mediation process—such as agreements on cost-sharing, attendance at an assessment meeting (if applicable), and documentation of the issues discussed—can be valuable during a court hearing. These records can demonstrate a landlord’s commitment to resolving the matter fairly and professionally.

Legally binding outcomes

Unlike the voluntary nature of mediation, decisions made during the court process are legally binding. This means landlords and tenants are required to comply with the court's judgement, providing a definitive resolution to the dispute. While this can bring clarity, it also highlights the importance of ensuring all documentation and evidence are prepared thoroughly.

Expert advice from AST Assistance

AST Assistance assists landlords across the UK in navigating the mediation process for resolving disputes with tenants. Our team provides tailored advice to help landlords approach mediation confidently, whether addressing rent arrears, tenancy deposit issues, or other disagreements.

For further support, contact AST Assistance on 01706 619954 or complete our contact form. Let us help you explore practical solutions and maintain positive tenant relationships through effective mediation strategies.