Landlord and Tenant Disputes – The Eternal Battle

This month I have been asked to discuss ‘disputes’ in the realm of landlord and tenant law.

Simply put: where would you like to start?

Disputes in this field are legion. 

• Tenants against landlords for a failing to properly comply with their leasehold obligations, or (seeming) to overcharge on service or administration charges. 

• Landlords against tenants for failures to pay rent, service or admin charges, or using their property in a way which their lease forbids. 

• Neighbours against neighbours: “your lease says you cannot do that” (a particular problem when the actions of one neighbour then impinges on a neighbour’s privacy or peace) and they have to go through a landlord to enforce.

Then you add a manager into the mix (whether tenant led or professional) who may or may not understand that not all leases are drafted on the same terms, and / or tenant owned freeholds where a tenant director may be choosing to exercise powers against a neighbour with whom they have a personal animosity or for their own benefit in their interests as a tenant, and it is a recipe for disaster.

This is of course discounting that many people who own leases forget that it is a landlord and tenant relationship and may not appreciate that they might require permission to use their property in a certain way (particularly regarding structural alterations or sub-letting) or that they may have to pay a premium for a lease extension (on a property they consider they have already paid for), all of which create resentment which manifests in future interactions.

You then wrap this up in a muddle of statute law and common law, and it is little surprise that disputes arise with such frequency – even over the most base matters such as what is or is not included in a demise.

Where these disputes often impact an individual in their home and can regularly be against freeholders who hold the freehold for commercial reasons, there can be a disjoint between the emotional connection which the litigants may have to the dispute leading to impulsive decisions which may not be in the interests of either the underlying dispute or the future relationship.

Unfortunately, landlord and tenant disputes can be complicated as so much can turn on the specific wording of a lease (meaning there is no immediate answer as there may be in other areas of law) – and the more complicated a dispute is will likely have the knock-on effect of increasing legal costs in assessing the merits (the strengths and weaknesses) of a dispute.  In addition to this, the First tier Tribunal (Property Chamber) (which is often the natural home of these disputes) is generally a ‘cost neutral’ jurisdiction; this means that even if a party ‘wins’ they may have to absorb any legal fees expended in the dispute as non-recoverable.  Both of these factors will cause a litigant to take stock of whether a dispute is ‘proportionate’ (is the cost of the fight worth any ultimate benefit) before deciding to engage in it over seeking to reach a compromise.

Again, landlords and tenants will have different views on this – a tenant may be willing to reach a compromise, but a landlord may not particularly if it could impact the future governance of the lease or the rights of other tenants.  Further to this, the landlord may not be able to compromise if it is a corporate vehicle incorporated solely for holding the freehold, as any compromise could lead to its insolvency.

In the current economic climate, I expect that tenants will be seriously scrutinising any charges levied on them, especially if they should increase.  But whether this will lead to an increase in litigation is yet to be seen – litigation itself may require an outlay of money and time which many will simply think is not worth the fight to expend.  But even without litigation it does pose the risk of creating greater animosity and the parties being a step closer to that proverbial ‘last straw’.

From my perspective what is always lacking in these relationships is a sense of empathy.  Parties to a dispute are expected to try to consider settlement but if neither party is willing to understand the other party’s view, discussion itself is going to resolve nothing nor rectify a damaged on-going relationship.  From my time as a community mediator, it always surprised me how much ground could be made when the people finally listened to and understood one another’s concerns.

So perhaps next time you are minded to pick that dispute with your tenant or landlord, consider whether there is the opportunity to sit down with them and discuss if there is a route forward before investing your time, money and emotion in formal litigation.  And with that in mind, I think it is time for another cup of tea; it’s amazing what can be achieved over a cup of tea.

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