On Mediation

 

May 13, 2003

 


Interests or rights? Landlords, tenants can benefit from mediation

The San Diego housing crisis is the subject of everyday news. And, recently, the rental industry has been under some pressure by local government and civic organizations because of rental increases and property laws that give owners the right to evict tenants without cause. Yet, the perceived power imbalance between tenants and landlords is widely misunderstood. In fact, the property owner's perceived power may preclude him/her from receiving maximum benefits; property owners are often reluctant to participate in mediation because they think their superior power will bring superior results in court.

In truth, perception is not reality and the tenants have more to offer than they know. Landlords make money when tenants stay put. A stable tenant population reduces advertising, legal, repair, cleaning and other costs. Tenants, too, like a stable environment. Unfortunately, the legal process -- "legal rights" system -- does not maximize the interests or benefits for the tenant/landlord in many situations.

In the classical encounter repeated thousands of times each year, each party exercises "legal rights." The property owner gives a three-, 30- or 60-day notice for the tenant to move. No reason for the notice need be given. Tenants believe that landlords issue these notices in a capricious or haphazard manner. A series of actions and reactions are thus launched. The tenant is angry at the owner and embarks on a destructive path. If the tenant fails to move after the notice period, the landlord files an unlawful detainer lawsuit. The tenant delays the action by filing for a hearing. The result: tenant is evicted, landlord has legal costs of $500-$1,000, uncollected back rent, damages to the rental property, advertising costs and an empty apartment. The tenant is out an apartment, has a black mark on his/her rental history, an adverse judgment for money and has to move. Nobody wins.

While parties exercised their legal "rights," could they have achieved a better result by working to satisfy their "interests?" And, what were the parties' real interests? Each party wanted to minimize costs in time, energy and resources. In one recent case at the San Diego Mediation Center, a tenant had been given a 60-day notice, and threatened a fair housing action against the landlord for discrimination. The case came to mediation. The result after three hours with a trained mediator was that the tenant agreed to move at the end of the 60 days and dropped the threat of a lawsuit. In return, she had no black mark on her record, no adverse judgment and was able to leave on her own terms. Was this magic? No, it was mediation!

In a recent security deposit dispute, the tenant claimed the apartment was in bad condition when he moved in. The manager wanted the tenant out, but since he moved in prior to her becoming the manager, she did not know the earlier condition of the property. The owner refused to return the deposit, and the new manager was caught in the middle. The case was set for small claims court. At mediation, the parties finally agreed upon the return of a portion of the deposit and the tenant immediately received his check. For the owner, this removed the risk of a judge pro tem's decision. The property manager was happy; she saw that the owner learned how tough it can be to deal with such situations every day. The parties left each other with a handshake.

In both these cases, the parties had talked on many occasions but were not able to resolve their differences. They thought they were "communicating." What did they say in the mediation that made the difference? Sorry -- can't tell you. Mediations are confidential, but great results happen when people can constructively talk about their respective needs and interests in the mediation's structured format, designed to facilitate discussion.

Through mediation, tenants and landlords are able to resolve disputes 70 percent to 80 percent of the time, and 90 percent of the participants are satisfied with the process. Moreover, collection rates for mediated settlements are substantially higher than small claims court. Mediation may not change the result (i.e., the tenant still moves) but often lessens the hardship and economic and emotional costs to both parties.

Mediation is fast, cost effective and confidential. A session usually takes two to three hours and can be scheduled within five to 10 working days. It need not interfere with or delay the unlawful detainer schedule. A bonus: participants learn communication techniques that can create better relationships in the future.

While mediation is not the answer to all tenant problems, it will improve tenant retention and eliminate a few unlawful detainers, small claims and fair housing lawsuits. For the tenants, it permits them to encounter their landlords with dignity and on a balanced playing field. Mediation is especially effective in dealing with tenant behavioral issues such as noise, unwanted or excessive guests, parking, repairs and deposit issues.

Creative and positive resolutions are common results of mediation. It is a vital piece in a very complicated puzzle and produces increased understanding and fairness in our rental housing industry.


Harris is president of the San Diego Mediation Center. He is an attorney and a real estate broker and owner.


 

May 13, 2003