Arrears mediation scheme can help lettings industry to avoid eviction backlog

The pilot of the government’s Housing Possession Mediation Scheme can help letting agencies and landlords recover arrears without lengthy waits for court evictions, according to PayProp.

Launched recently by the Ministry of Housing, Communities and Local Government, the free arrears mediation service aims to help parties resolve disputes more quickly without the need for court action.

Mediation can be requested by landlords or tenants at the review stage of their possession case. Once a case has been referred, the Society of Mediators aims to conduct the confidential mediation process remotely within 10 days.

During a mediation appointment, the mediator will speak to each party separately to help them explore their options and reach an agreement. If unsuccessful, the case will continue to a substantive face-to-face court hearing.

If the mediation succeeds, an agreement which explains what actions each party must take next will be signed and brought before a judge for approval. If the agreement is broken by either party, the other party can apply for the court to enforce it.

“Mediation will not solve every issue between landlords and their tenants. However, if approached by both parties to the rental agreement with an open mind and flexibility, the government’s mediation scheme can help to remove the need to go to court, which is usually in everyone’s best interests,” says Neil Cobbold, Chief Sales Officer at PayProp.

“The scheme is new this year, so it’s important that letting agents make landlords aware of how it works so they can assess all the options available to them when attempting to repossess a property.”

Backlog of court evictions expected over the summer

The mediation scheme could be a vital resource for letting agents and landlords over the coming months as the industry prepares for the end of the ban on bailiff-enforced evictions, currently scheduled to be lifted on May 31.

“Even before the pandemic, pursuing possession of a property through the courts could be time-consuming and expensive. Due to the unprecedented circumstances of the pandemic, a huge number of cases from last year are yet to be heard by the courts,” explains Cobbold.

According to data from Landlord Action, just 7,451 evictions of an expected 28,000 took place in the county courts in 2020. As a result, a significant backlog of court cases is expected when evictions are allowed to take place once more.

“This means that any landlord starting the eviction process now could have to wait months before their case is heard in court. Alternatives such as the Housing Possession Mediation Scheme could be a lifeline to those who have already been dealing with issues for a prolonged period – while also freeing up court time for those cases where a mediated agreement can’t be reached.”

Avoid court evictions with holistic approach to arrears

Cobbold adds that it will take some time for the courts system to return to something close to a normal service. Even then, an eviction through the courts will still be a long and potentially expensive process.

“When independent mediation works, it can help property professionals to come to an agreement with tenants, sustain tenancies and recover arrears more quickly than pursuing an eviction and a County Court Judgement.”

He adds that it’s vital for agents to put processes in place to reduce the chances of arrears becoming serious in the first place.

“This includes keeping digital records of all payments, while also chasing rent automatically using the most effective methods of communication.”

“Educating tenants about the financial support options available to them and organising affordable repayment plans can help landlords and agents to collect more of the rent they are owed,” he adds.

“By having these measures in place, agencies can add value for landlords from the start of a tenancy and reduce the chances of court eviction action being required at a later date,” Cobbold concludes.