The value of mediation in resolving property management disputes was highlighted recently in a long-running arrears case, as Carmela Inguanta, Head of Litigation at Brady Solicitors, explains.
Our client managed a mixed use development where one of the commercial tenants had several years’ of service charge arrears. They instructed Brady Solicitors to see if we could bring a fresh approach to the case where their previous solicitors had failed.
In dealing with landlord and tenant disputes it is essential that we try to preserve the landlord and tenant relationship as, once the lawyers have hopefully done their job and resolved the dispute, the parties concerned will need to continue to work together for the duration of the lease, which could be for a number of years.
And this is where mediation can be really helpful.
The tactics applied by the previous solicitors had effectively been a ‘trial by correspondence’ – lots of papers exchanging hands with subtle legal points being scored, yet no one was addressing what the real issues were and how best to resolve them.
Mediation gave both parties a forum to air their grievances and, more importantly, in this case enabled the tenants to see the potential weaknesses in their case.
What was the nature of the service charge dispute?
In essence, the tenant was disputing their liability to pay service charges for services they alleged they neither had the use nor benefit of, for example, the lift in the car park which served only the basement floor and not the ground floor.
They were also seeking to challenge their liability to pay service charges without additional supporting evidence other than the invoices being disclosed.
And it was on this second point that the mediation really came into its own: the tenant was effectively implying fraud on the part of the landlord. Being able to discuss this through the mediation process helped the tenant to understand the serious nature of the allegations being made and reconsider their position.
What was the outcome?
Whilst the tenant agreed to pay a substantial amount of the arrears the added bonus was that the parties were able to reach an amicable agreement in defining certain parts of the lease that were open to interpretation and thus hopefully avoid future disputes.
This is something that simply would not have been possible had the case proceeded to Court.
Mediation enabled us to resolve this long running case quickly and effectively and ensured that the landlord and tenant relationship was restored as each was better able to understand the other’s point of view.