When you think of disputes between landlords and tenants the natural tendency is to think of rent payments not being paid and the landlord wanting the money. After all the landlord has bills to pay too. However, there can be a host of issue and a number of perspectives. Having mediated hundreds of these disputes I want to share with you some thoughts during these more unusual times.
Landlord tenant mediation examples
No two mediations are ever the same. However, mediation can provide great insights and help the parties address the monetary, eviction, or other issues. Here are some real-world examples and concerns between landlords and tenants that you may find of interest. These examples shed some light on how our systems work. These examples also indicate how landlords and tenants can and do collaborate in difficult situations.
Mercy versus justice pre Covid-19
This commentary took place before the federal moratorium on evictions was in effect.
The landlord had not been paid rent for two months. The landlord did not know why and wanted the tenant out. If this was not a successful mediation the landlord knew that he would take action and evict this single mom. Instead of a two day notice for an adult with no children she would be given a seven day notice since her two preschoolers were clearly under the age of 18. The law gave her seven days to vacate. It was February in Minnesota and the temperatures were below zero at night and in the single digits during the day. Having no place to go with weather like this is serious business.
She shared her story.
Her car broke down. That caused her to lose her transportation to work. She worked two minimum wage jobs working 60 hours a week. She was fired from both for missing work. When she lost her jobs, she decided to forgo paying her rent to feed her children and get her car fixed. She was afraid to tell her landlord thinking he would evict them, and she had nowhere to go. She would have to live in her car. Now her car was fixed, and it had a heater. She had two new jobs that were minimum wage for 50 hours a week. She would be able to pay rent going forward. With targeted questions during the mediation, she shared that she was sorry, she wanted to pay the back rent, and she formulated a plan to be able to pay off her back rent with a payment plan. The landlord wanted his money sooner.
The landlord suggested she explore staying at a shelter. She said she was raped at a shelter and she would never stay in a shelter again or expose her children to the shelter. She and her two preschoolers would live in her car. They would find a way to survive.
Once the landlord understood the situation, he decided to consider her payment plan.
With further questioning her initial payment put her right on the edge financially. Thinking about other bills the original payment plan had to be extended from three months to six months to make sure she could make the payment every month. Once the landlord fully understood the ramifications too, he agreed, and a final payment plan was written up and signed by the parties.
In this court mediation situation if she fails to meet the terms of the agreement a writ can be issued immediately, and she can be forcibly evicted by the sheriff within 24 hours. For that reason, the payment plan had to be something that really would work for the tenant and that the landlord could accept. In the end with the parties fully informed a workable agreement was reached.
Covid-19 and a business
Many retailers leasing space from building owners have had to shut their doors and leave. However, some landlords have approached this differently. Some landlords have been motivated to keep long term tenants in place. When the landlord considers the cost of finding a replacement tenant during these uncertain times, consideration may be given to maintaining a good long-term tenant that wants to stay. Some landlords working with their tenants have voluntarily worked with their tenants to reduce rents.
Depending on their facts and circumstances a recent Wall Street Journal article found forgiveness from 30% to 100% and a willingness to develop a payment plan in the future.
Each situation has its own unique story. Payment terms reflect the flexibility of the tenant and the landlord’s situation. The key is to approach the situation in a neutral fashion, being honest and open, and exploring what may be possible. Having the two parties come up with an acceptable solution is often the best solution. If they cannot do this themselves bringing in a neutral third party in the form of a qualified mediator that understands these types of situations can be extremely helpful. The mediator can ask questions not thought of by the parties and expand the horizons of both parties.
Eviction terms pre- and post-moratorium
Sometimes the tenant simply cannot pay, wants to move out, and wants to move on. In situations like these the only apparent issue is the eviction date.
What seems to be straightforward initially could have some interesting twists.
However, the landlord may have been working with the tenant with the tenant doing repairs, or how the tenant leaves the apartment may be at issue. What about furniture and belongings? How about cleaning the bathroom, stove, refrigerator, and the rest of the apartment? Do windows need to be washed? What about the key? Could a date be reached beyond the legal requirements for certain services being provided? How much trust is there between the landlord and tenant? Is it possible the landlord could abate the legal notice (abate the unlawful detainer) so the tenant would have no record of the eviction on their court record? With an unlawful detainer on a tenant’s record is much harder for the tenant to find a landlord that will rent to that potential future tenant.
Once additional interests are presented by each party it may be possible to develop an amicable way to proceed. The key is for a neutral party asking questions to uncover areas of concern not immediately identifiable that have a significant impact on the outcome.
Some landlords are struggling
In today’s world with Covid-19 there are currently a number of safeguards for tenants. The moratorium on evictions that is intended to help renters because of the pandemic is able to help many but does not apply to all tenants. The current moratorium has been extended to April 1, 2021.
With landlords potentially having lost rent September to March it is quite likely that many landlords are going to land in foreclosure.
Most can weather one or two months without rent but cannot weather six or seven months without rent. This is another potential problem looming on the horizon. A question is whether financial institutions will be willing to listen to landlords, work with them, and develop an alternative that both parties can live with going forward. This remains to be seen. Mediation may help in these situations too.
Mediation provides the parties an opportunity to be heard and work with an expert in conflict resolution. The mediation process allows the parties to be the ultimate decision maker in a confidential setting. having the right mediator with the appropriate skills and background can make all the difference.
Michael Gregory is a Qualified Mediator with the Minnesota Supreme Court who is also a Certified Virtual Presenter (CSP) with experience in virtual mediation on a wide variety of issues. With a background in business valuation as an Accredited Senior Appraiser and a Certified Valuation Analyst he offers a unique perspective to help clients. He has experience in all eight areas to serve you and your clients. He may be reached at MikeGreg.com.
About the author
Mike Gregory is a professional speaker, an author, and a mediator. You may contact Mike directly at email@example.com and at (651) 633-5311. Mike has written 12 books (and co-authored two others) including his latest book, The Collaboration Effect: Overcoming Your Conflicts, and The Servant Manager, Business Valuations and the IRS, and Peaceful Resolutions that you may find helpful. [Michael Gregory, ASA, CVA, MBA, Qualified Mediator with the Minnesota Supreme Court]