The Covid-19 pandemic impacted the rental market in many ways, with the rise in rent arrears quickly becoming a pressing issue for landlords and letting agents over the last year.
To offset the economic pressures and growing disputes between landlords and tenants, the government proposed a Housing Possession Mediation Scheme to allow parties to resolve disputes more quickly without the need for court action.
With the recently launched scheme expecting to help letting agencies and landlords recover arrears without lengthy waits for court evictions, we provide an overview of how it works and what all parties can expect going forward.
What is the Housing Possession Mediation Service?
Launched by the Ministry of Housing, Communities and Local Government (MHCLG) in February 2021, the Housing Possession Mediation Service is designed to help landlords and tenants involved in a housing possession court case.
The free service aims to resolve disputes without the need for face-to-face court action. Both sides of the tenancy agreement work with a trained, neutral mediator, who will help to identify issues and propose steps that can be taken to solve them.
If all parties agree on an outcome, the case will be closed. However, if it is unsuccessful, the case will continue to a court hearing, although the court will not be made aware of anything that was said at mediation stage.
Mediation can be requested by landlords or tenants at the review stage of their possession case if no initial agreement can be made.
MHCLG says mediation can be less stressful and expensive than going through to a full court hearing, where additional fees and expenses will apply.
How does the mediation scheme work?
Once a case has been referred, the Society of Mediators will conduct the confidential mediation process by telephone within 10 days.
During an appointment, the mediator will speak to each party separately, meaning landlords don’t speak directly to the tenant.
They will then try and help each party to explore the options available to them and reach a resolution. However, the government says it will not force either side to try and reach a settlement.
To get the most from the process, landlords and tenants are advised to be open and flexible, willing to find a resolution, clear with what they want to say and able to answer questions. In addition, all parties are welcome to access legal advice during the mediation, although this is not always possible.
While mediation may help stakeholders avoid a full court hearing, it will not delay the ongoing court process and all court directions must be complied with.
If the mediation succeeds, an agreement which explains what actions each party must take next will be signed and then put in front of a judge for approval. If the agreement is broken by either party, the other party can apply for the court to enforce it. If unsuccessful, the case will proceed to the face-to-face court hearing.
How can letting agents help to reduce court evictions?
Despite the easing of lockdown, the issue of widespread rent arrears is expected to continue for a while longer, making it vitally important that all parties try to work together and keep disputes to a minimum.
Commenting on the scheme, Neil Cobbold, chief sales officer at PropTech firm PayProp, said: “Mediation will not solve every issue between landlords and their tenants. However, if approached by both parties to the rental agreement with an open mind and flexibility, the mediation scheme can help to remove the need to go to court, which is usually in everyone’s best interests.”
He added: “The scheme is new this year, so it’s important that letting agents make landlords aware of how it works so they can assess all the options available to them when attempting to repossess a property.”
PayProp believes that the mediation scheme could be an important resource for letting agents and landlords as the industry prepares for the end of the ban on bailiff-enforced evictions, currently scheduled to be lifted on May 31.
Cobbold continued: “Even before the pandemic, pursuing possession of a property through the courts could be time-consuming and expensive. Due to the unprecedented circumstances of the pandemic, a huge number of cases from last year are yet to be heard by the courts.”
While any landlords starting the eviction process now could have to wait months before their case is heard in court, Cobbold says alternatives such as the scheme could be a lifeline to those who have already been dealing with issues for a prolonged period – while also freeing up court time for those cases where a mediated agreement can’t be reached.
“When independent mediation works, it can help property professionals to come to an agreement with tenants, sustain tenancies and recover arrears more quickly than pursuing an eviction and a County Court Judgement,” he added.
For this reason, letting agents must put processes in place to reduce the chances of arrears becoming serious in the first place.
This includes keeping digital records of all payments and using effective methods of communication to chase rent.
Agents should also educate tenants about the financial support options available to them, while organising affordable repayment plans can help landlords to collect more of the rent they are owed.
By putting these measures in place, you can add value for landlords from the start of the tenancy and reduce the chances of court eviction action being required at a later date.
Fortunately, our dedicated team at Canopy can assist you with this and more, using smart technology to simplify the rental process so you can say goodbye to upfront cash deposits and hello to things like a free digital rental profile in the form of our RentPassport.
For more information about our services, contact us on 020 3966 3850 or email us at email@example.com.