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The current pandemic has been an unprecedented period in our country’s history. Everyone has faced hardship and sacrifice in their daily lives and many face an uncertain future, without security and in fear.
Whilst every sector is experiencing challenges, the private rented sector is one that is particularly vulnerable at the moment.
The number of people that rely on privately renting is around 23 per cent of the population, and this is not just single people and students, but hardworking families up and down the country.
The privately rented housing stock is provided by around two million private landlords, many of whom only own one or two properties, often relying on their investment and rent income to fund their pension provision, and balancing being a landlord with a full-time job and their own family commitments. These ordinary people have faced the same challenges as everyone else during the pandemic, with some being on furlough and themselves losing their jobs or facing redundancy. The mortgage deferral scheme has helped but inevitably this debt will have to be repaid.
For tenants, the threat of homelessness during this time hangs over them constantly and whilst the Government has pulled out all stops to protect jobs and provide benefits to help them weather the storm, some half a million are now in some form of rent arrears. Their landlords have been, for the vast majority, patient and understanding, with as many as 85 per cent of them deferring rent payments, writing off debt and reducing rents, according to research by the National Residential Landlord Association.
This said, everyone has a limit and ultimately an ongoing debt situation will result in a landlord asking a tenant to leave their property. With local authorities stretched in meeting their housing obligations, the tenant has no choice but to sit tight and wait for a formal eviction to occur.
In anticipation of this, the Government took measures to prevent an eviction crisis, first suspending the courts and then, during lockdown, prohibiting the actual removal of tenants by bailiffs except in the most extreme cases.
This situation at some near stage will need to end and the process is set to start in June, with the reduction of notice periods, as well as the eviction moratorium ending on 31 May. But when it does there will be close to a quarter of a million cases awaiting court action, or the carrying out of actual possessions. Even with the lifting of the eviction ban, the shortage of County Court Bailiffs could mean long waits for enforcement, prolonging the process for weeks or months to come, and of course this does not factor in any future lockdown, national or local, that could emerge if a third wave of the virus takes hold.
This backlog will put tremendous pressure on the court system and this has been recognised by every organization and professional body in the sector. Recently, the House of Lords Select Committee on the Constitution produced a report that sets out the challenge on this front and calls for immediate action.
This does not mean that action has not been taken and I recognize that measures have been put in place to try and alleviate the situation, with the Government funding ‘Nightingale courts’, drafting in former judges and modifying the processes to try and help get possession cases through the system as effectively as possible. I also acknowledge the introduction of a pilot mediation service to try and resolve cases before a final hearing.
It is easy to ask a government to do more, and no doubt this will continue to be the case with those on all sides of the sector wanting further measures and more expenditure to resolve the challenges.
I completely understand the frustration, if not desperation, of landlords and their agents with the current situation. However, rather than doing nothing or expecting those in government to come to the rescue, there are things that can be done, and new services that are now out there to help.
I am talking about the need for mediation and conciliation to try and resolve end of tenancy disputes, tackle arrears and find solutions for both tenants and landlords that avoid the trauma, cost and time involved in using the courts to deal with these issues.
Now, the case for alternative dispute resolution has been eloquently made by many including the current Master of the Rolls, Geoffrey Vos and this has led to the mediation pilot which is offered free of charge in the last 28 days before a case is due to go to court. The trial has been running since February, so it will be interesting to see what difference it has made and how successful it is been.
My view, however, is that the number of cases being dealt with, is but the tip of the iceberg - the process probably comes too late in the day for many situations, where the relationship has broken down to such an extent or the costs of arrears are so great, that a deal is beyond both parties.
This is why a number of other alternative dispute resolution services have emerged and can make a real difference.
Honorable mentions must go to Goodlord, who have added a facility to their Legal Expenses, Rent Guarantee Policy to help formulate payment plans, and for landlords and tenants to try to negotiate a settlement before going down the court route. I have also seen the efforts that Flatfair, the deposit alternative company, have gone to, to put a portal in place to help draw up payment plans between the parties. These are however self-help tools and sometimes you need an intermediatory to help bring things together. Deposit protection specialists, TDS have launched a conciliation service where a neutral person facilitates the negotiation between the parties in a virtual meeting and sometimes this is the nudge that is needed to get a deal over the line.
However, what is far more effective in dealing with deep seated disputes is mediation, where a trained mediator deals with each party separately, without all the finger pointing and blame that can occur if the parties have to engage with each other.
There are many local mediators and many law firms offer the service, but in terms of easy, affordable access to a service specialist there was a gap. Cue the Property Redress Scheme Mediation Service.
Our service offers early intervention, with a high success rate in terms of outcomes. We are confident that not only can we help reduce the pressures on the court system during the forthcoming months following the return to post lockdown recovery, but that we can also help forge a long-term solution for the Government’s plans for court reform and the ending of no fault evictions.
You can find more information on the scheme here. You might also be interested to read what Julie Ford, a Property Redress Scheme Tenancy Mediator, has to say about property mediation and its importance in her recent blog post and video for LandlordZONE.
Ultimately, the challenges we face post pandemic with the court system and the arrears and possession backlog, will not be solved with two jabs and a squirt of sanitizer - it will need multiple solutions and remedies to come out the other side. It will need government, it will need reform of the courts and it will mean the sector pulling together.
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Property Redress Scheme is approved by Government under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015