Is there a reprieve for tenants unable to afford their rent and landlords not receiving what is due to them? How can dispute resolution assist those experiencing financial hardship as a result of the lockdown?
With an economy hit with a recession, it is very likely that job security will be compromised. This, in turn, will affect whether or not tenants can pay their rent timeously. Rising tensions between landlords and tenants are inevitable as tenants fail to meet their obligations under their rental agreements.
While this article will provide advice on the situation in cases where tenants do not pay their rent timeously, other disputes may arise:
Damage to property
Tenants owe more than a security deposit
Early cancellation of the lease agreement
Cost of finding a new tenant
Expenses incurred in storing and abandoning of property.
Tenant uses the property for illegal activities
Keeping a pet against the terms of the lease.
Noise and disruptions
What activities are allowed or permitted in a complex
In terms of a lease or rental agreement, governed by the Rental Housing Act (“RHA”), a tenant has an obligation to pay rent to their landlord timeously. The RHA further provides that that landlord may require the tenant to pay a deposit upon taking occupation of the property.
The Lockdown and Implication for Tenants and Landlords
Tenants may be negatively financially affected by the lockdown and consequently unable to fulfil their obligation to pay rent to their landlord. Notably, tenants cannot simply refuse to pay rent; they should attempt to come to an arrangement with their landlord for the duration of the lockdown.
Now is the time for parties to focus on finding a solution that will benefit them in the future, instead of merely focusing on profiting in the short-term.
Solving Landlord-Tenant Disputes
1. Flexibility and Compromise
The key to maintaining a good relationship with tenants requires landlords to be flexible at this time. Landlords are encouraged to calculate running costs and consider re-negotiating obligations under the existing rental agreement.
2. Utilising the Deposit
As per the rental agreement, tenants may have been requested to pay a deposit upon moving into the landlords’ premises. In these cases, deposits can be used in lieu of rent. Importantly, only upon agreement will the landlord be allowed to utilise the tenant’s deposit. The parties can reach an agreement that the tenant will pay back the deposit in instalments once the lockdown or the State of Disaster has ended.
3. Rental Deferment
The landlord and tenant can come to a new agreement whereby new arrangements are provided for repayments of rent for a later period. The period of notice may also be extended.
Mediation offers an avenue to resolving disputes which may arise under lockdown which is affordable, accessible, and that will preserve the existing relationship between landlord and tenant. It is advisable that tenants and landlords seek the assistance of mediators to renegotiate terms of the rental agreement for legal certainty and protection of the parties. Mediators may take a more facilitated approach or in such instances adopt a more evaluative approach to bring about an effective and speedy resolution. This process provides the benefit of efficiency, cost-effectiveness, and finality.
5. Expedited Arbitration
Where the parties cannot agree and access to the courts are limited, an expedited and legally binding arbitration process may be conducted to bring about an urgent decision on the dispute. This process provides a benefit of efficiency, cost-effectiveness, and finality.
6. How can Mediateworks Assist?
Mediateworks has a panel of experts from inquiry chairpersons, investigators, facilitators, mediators, counsellors, lawyers to assist parties in navigating themselves out of any dispute that may arise. Mediation can take place both online or in person. In matters such as these, we are able to facilitate the negotiations between the lawyer and tenant to ensure that a sustainable and benefitting agreement is reached between both parties. Where this is not possible or fails, we can provide independent arbitrators to chair a legally binding arbitration process at a low cost.