Arbitration is the method through which disputes are resolved when the two parties can’t agree, but want to keep it out of a court of law. It is used settle disagreements on rent arrears, lease contract disputes and other related complications.

Arbitration is a good alternative to court when it comes to settling a dispute, especially if the landlord and tenant generally have a good relationship and want to keep doing business with each other. Court is generally viewed as an antagonistic procedure because it thrusts one party against the other in a dispute, and eventually one comes out the winner and the other the loser. While resolving disputes, the court may end up increasing tension, unease and conflict between the parties involved. Even the court itself recognizes the value of alternative methods of handling disputes and judges may in some instances advise UK citizens to undertake arbitration before considering court proceedings.

In arbitration, the disputing parties take the issue to an independent third party that can be an individual or body known to have expertise in the housing field. The Arbitration Act stipulates that the objective of arbitration is to get a fair resolution of conflicts through a neutral third party with minimum cost or delay.

The parties involved should be free to concur on how their dispute is resolved. If the landlord and tenant used an estate agent to find each other in the first place then as long as both agree to abide by the decision, the agency can act as the arbitrator. Alternatively, an estate agency may offer the service of arbitration to people not otherwise represented by it and will offer an impartial decision on any disputes. In some cases the court can provide an arbitrator but it is best if both the landlord and tenant can find one without involving the courts when possible.

Most lease contracts allow for arbitration of disputes between tenants and landlords rather than the court of law. Usually, they state the process through which an arbitrator is appointed. When one party intends to have court action when there is a provision for arbitration, the other party can appeal for a stay of litigation from the court. However, if both parties agree to go to court, the arbitration clause can be ignored. The court is empowered to order one party to fulfil the arbitration tribunal’s order. The parties involved in an arbitration dispute are responsible for the costs and fees involved in the process.

Why opt for Arbitration?

In arbitration, there is a level of privacy as outside parties are not privy to information as they would be with court action, so it serves to protect the reputation of both parties. Arbitration in most cases ensures speedy resolution of disputes. Court proceedings on the other hand are known to take much longer, and the parties end up incurring more costs through the legal fees and other related costs.

Another desirable factor of arbitration is that an experienced arbitrator imparts his or her expertise to the disputing parties. As the opinion is from someone not being paid by either party, it is seen to be impartial and as both have already agreed to abide by the decision, it tends to be a great way to handle landlord disputes.