The Importance of being Reasonable

When Oscar Wilde penned his famous farce the “Importance of being Earnest”, he laconically subtitled it a “Trivial Comedy for Serious People”.

Having dealt with complaints for the best part of two decades now, I certainly have seen how, from diametrically opposing positions, the same issue can be perceived by different sides. Things that on the surface appear to be quite small disputes, are far more than that for the parties involved and can quickly become contentious and antagonistic. What maybe petty to one party is deadly serious to another.

I was therefore very interested in the thoughts of Suzy Hershman, Head of Dispute Resolution for our sister organisation mydeposits who shared her views on how you should deal with complaints.

Suzy says:

To be or not to be….Reasonable.
“There are key arbiters that always should be part of a successful resolution and one area always touched on is that of reasonableness and what this actually meant. Along with fairness, this term is contentious and difficult for people to get their heads around. It is however one of the key principles used in determining a tenancy deposit dispute. Landlords and some agents struggle with this.

This is an age old dilemma neatly posed by Hamlet who asks the question whether following the path of reason, merely makes “cowards of us all” and whether to “suffer the slings and arrows of outrageous fortune or take up arms against a sea of troubles”. The answer is there is an alternative.

Being Reasonable is not Capitulation
Can I first reiterate that there are many good landlords in the marketplace who understand the “reasonable” concept and will never have a dispute or end up in court, simply because they are reasonable. Examples of good practice I’ve recently heard of from both landlords and agents are ‘happy to provide a mattress protector at the start of every tenancy’; ‘landlords expect to have to clean their property at the end of the tenancy’; ‘maintaining good relationships throughout the tenancy help deal with things at the end’ and ‘sorting out repairs quickly keeps the tenants happy’.

It is encouraging to know that many landlords who’ve received all the rent payments from a good tenant who has looked after the landlords’ property well and caused no big issue, are not in the habit of making an unreasonable claim and waiting another two months for it to be resolved by adjudication before everyone can move on.

Many of the agents I speak to find negotiating with their landlords and tenants challenging for many reasons but most commonly it’s due to the lack of willingness to compromise from either party and/or the ability to calculate a reasonable deduction.

Landlords, albeit those with good intentions, still struggle with many concepts ranging from who the deposit actually belongs to, why the tenant is not responsible for the replacement cost after causing damage to the meaning of ‘reasonableness’ and wanting simply to keep as much of the deposit as possible.

It is also evident that there are situations where landlords and tenants fall out and just want to frustrate the other party, dragging things out as long as possible.  The most difficult group of landlords, for both agents and adjudicators, are often those who are emotionally attached to the property having once lived in it and view its condition when let out, through rose tinted glasses.

My concern is that these various scenarios lead landlords and tenants to become so litigious with everyone wanting to fight their corner, to the bitter end, for a piece of the pie. There is so much consultation going on in the lettings market that before needing to comply in other areas, it would be highly advantageous to get a good grasp on how to avoid a dispute at the end of your tenancies.

Fair Wear and Tear
The key principle is understanding that the deposit, no matter who safeguards it for the duration of the tenancy, belongs to the tenant; that when a tenant causes some damage or deterioration to the property which is more than reasonable (that word again!) wear and tear, a landlord has to prove with evidence that the tenant caused the extent of damage being claimed but is NOT entitled to claim the full cost of replacement at the tenant’s expense.

Quite simply, if an item is new at the start of the tenancy, it will not be new one week later or after 6 months, 2 years etc. If the item was one year old at the start of the tenancy, it will depreciate in terms of value over the tenancy and this element of normal use of the item or area is not the tenant’s responsibility.

Check your contracts; the one you and your tenants signed at the start of the tenancy. There will be a clause under the tenant’s obligations making it clear that they are responsible for damage or deterioration to the property except for the fair wear and tear element. Even if your tenancy agreement does not contain this caveat it is implied in residential tenancy law. Use the guidance readily available on what is good evidence, reasonable wear and tear and ‘proportionate’ calculations to use at the negotiation stage can help alleviate timely and costly delays in moving on.
 

Mitigate the Losses.
Finally be aware of your obligation to mitigate the tenant’s losses and not exploit or capitalise on the situation. This means that they should seek to minimise the costs of repairs, replacements and restorations. This means that if something can reasonably be repaired rather than replaced then even if choose to replace a whole carpet or redecorate the whole room when the damage is confined to one corner, then they are not justified in charging the whole amount to the tenant. Yes I have heard all the protests that the patch or paint does not match or that the item to be replaced is now obsolete, however unless there is clear evidence that the claim is proportionate to the detriment caused, the tenant can dispute this and stand a good chance of have the claim reduced.

Landlords, accept what your agents are suggesting at the end of tenancy. Understand and ask the question, what is the likely outcome if you delay the distribution of the deposit another two months while the case is adjudicated and ask yourself if it is really worth it?”

Suzy

Bring the Curtain Down.

I very much endorse what Suzy says above and these principles apply to all complaints and disputes.  As Wilde’s famous play ends, its main protagonist Jack Worthing quips "I’ve now realised for the first time in my life the vital Importance of Being Earnest". In this case for landlords and agents, delete earnest and insert reasonable! Apply the principles outlined above and you can close the complaint to applause!