Property investment is a business and property investors are effectively business managers. They may not have direct staff but they will have tenants and those tenants need to be managed. Part of tenant management is dealing with landlord/tenant disputes. How exactly should landlords deal with tenant disputes?
The causes of disputes
At the end of the day, all landlord/tenant disputes occur for one of three reasons.
- The tenant hasn’t understood the tenancy agreement
- The tenant and the landlord disagree on what the tenancy agreement means
- The tenant is deliberately ignoring the lease.
The vast majority of disputes fall into one of the first two categories. This means that the best way to avoid landlord/tenant disputes is to draw up a clear tenancy agreement and make sure that your tenant understands it.
Then give them a way to contact you if they have any questions and make sure you answer them promptly, clearly and politely. Ideally, get in touch with your tenants periodically and explicitly check if they have any issues or questions. Always keep a log of any contact and, where appropriate, follow up in writing.
The way to avoid problem tenants is to vet your tenants thoroughly before you decide whether or not to let them sign a tenancy agreement in the first place. You can also mitigate your risk by making a deposit. Be aware, however, that the onus will be very much on you to justify any deductions from that deposit.
The issue of maintenance and repairs
Even with all of the above in place, it is still possible for landlords and tenants to find themselves in dispute. This is typically when they disagree on what the tenancy agreement means. If the basic lease is clear and has been clearly explained, then this is most likely to happen when there is an unexpected issue.
Some events are genuinely unforeseeable, but a lot of potential issues can be avoided by remembering to take care of routine maintenance. If there is an issue, then deal with it promptly and ensure that you communicate effectively with your tenant.
Keep in mind that if you end up in a formal dispute, the issue will be looked at in context. For example, a judge might not be too concerned about a delay in fixing heating in the middle of a summer heatwave. They may, however, not be at all happy about a delay in fixing it in the middle of winter.
What to do in the event of a dispute
If, despite your best efforts, you do find yourself in a dispute, then it’s important to handle it the right way. Ideally, you should start by talking the matter through with your tenant. If, however, you’re not confident about doing this yourself, then you might want to suggest mediation.
It’s highly advisable to try the soft-touch first. It often works and it’s vastly quicker, easier and more affordable than formal actions. If, however, it doesn’t get you anywhere, then your next option would be some form of legal action.
There are (relatively) low-cost ways to make a formal claim against your tenant. In the real world, however, the issue may not be getting the judgement but enforcing the judgement.