Handling contract-holder disputes: Best practices for conflict resolution

As a landlord, managing a rental dwelling can be rewarding, but it’s not without its challenges. One of the most common hurdles landlords face is dealing with contract-holder disputes. Whether it’s a disagreement over rent, dwelling damage, or breaches of contract, disputes can be stressful, time-consuming, and financially draining if not handled properly.

In this post, we’ll walk through some best practices for resolving contract-holder disputes in Wales, from clear communication and mediation to legal action and working with Rent Smart Wales.

1. Address issues early

One of the most effective ways to resolve disputes is to prevent them from escalating in the first place. Open, honest, and timely communication between landlords and contract-holders can nip problems in the bud before they become full-blown disputes.

Here are some key tips:

• Set expectations from the start: Clearly outline the contract-holder’s responsibilities in the occupation contract agreement, and make sure they understand their obligations regarding rent payments, dwelling maintenance, and respecting the terms of the lease.
• Keep communication channels open: If a contract-holder voices a concern, respond quickly and professionally. Many issues, such as maintenance problems or misunderstandings about rent due dates, can be resolved with a simple conversation.
• Document everything: Keep written records of all communications with your contract-holder. This can be helpful if the dispute escalates and you need to provide evidence of attempts to resolve the issue.
  
  

2. Understand Welsh legislation: The Renting Homes (Wales) Act

Landlords in Wales need to be well-versed in the Renting Homes (Wales) Act 2016, which modernised the rental system by creating standard occupation contracts for both private and social contract-holders. Under the act, landlords are required to provide written contracts to contract-holders and ensure the dwelling is fit for human habitation throughout the occupation contract.

Key provisions include:

• Notice periods: contract-holders are entitled to longer notice periods for contract termination (six months for a "no-fault" eviction under Section 173).
• Minimum standards: Landlords must meet certain standards of dwelling condition, ensuring it is safe and habitable.
• Maintenance responsibilities: contract-holders must take care of minor repairs, while landlords are responsible for structural issues and essential systems like heating.

Understanding your legal obligations under this Act can help you avoid disputes related to occupation contract rights and ensure that both parties are clear on their responsibilities.

3. Explore mediation 

If a dispute arises that can’t be resolved through direct communication, mediation can be an effective way to find a resolution without going to court. Mediation involves a neutral third party helping both sides come to a mutual agreement. It’s less adversarial than legal action and can save both parties time and money.

In Wales, there are several organisations that offer mediation services for landlords and contract-holders. Some local councils even provide free or low-cost mediation services to help resolve issues such as:

• Non-payment of rent
• dwelling damage
• Breaches of occupation contract terms (e.g., subletting, noise complaints)

Mediation can be especially useful if you’re dealing with a contract-holder you’d like to maintain a positive relationship with.

4. Know when to take legal action

While mediation can resolve many disputes, some situations may require legal action - especially if the contract-holder refuses to cooperate or if the dispute involves serious breaches of contract, such as ongoing non-payment of rent.

Here’s what you should consider before pursuing legal action:

• Non-payment of rent: If a contract-holder falls behind on rent, you should follow the proper legal procedures, including issuing a written notice and allowing them time to remedy the situation. If they fail to do so, you may need to apply for a possession order through the courts.
• dwelling damage: If a contract-holder causes significant damage to your dwelling, you may need to claim for the cost of repairs through the deposit scheme. Be sure to document the damage thoroughly, as photographic evidence will strengthen your case.
• Eviction: If eviction becomes necessary, make sure to follow the correct legal process. In Wales, landlords must provide adequate notice, especially in the case of a "no-fault" eviction, where six months’ notice is required under the Renting Homes (Wales) Act.

If you’re unsure about any part of the legal process, it’s a good idea to seek legal advice or consult with a letting agent who is familiar with Welsh regulations. At Moginie James, we offer a Premier Service for landlords, where we manage and pay related legal costs incurred on behalf of you (T&Cs apply).

5. Work with Rent Smart Wales

Rent Smart Wales plays an important role in regulating landlords and agents in the private rental sector across the country. Every landlord who manages dwelling in Wales must be registered and licensed under Rent Smart Wales, and it’s crucial to stay compliant.

Here’s how Rent Smart Wales can help with contract-holder disputes:

• Providing advice: They can offer guidance on resolving disputes, helping you understand your rights and responsibilities as a landlord.
• Enforcing compliance: If the dispute involves serious breaches of your licensing conditions or contract-holder mistreatment, Rent Smart Wales can take enforcement action against landlords or contract-holders who violate their obligations.

By ensuring your compliance with Rent Smart Wales, you’re not only protecting yourself from potential penalties but also building trust with contract-holders.

6. Keep your insurance up to date

While no one expects disputes to arise, it’s essential to be prepared for the worst. Having landlord insurance that covers legal expenses, dwelling damage, and rent arrears can offer peace of mind and financial protection if a dispute escalates into something more serious.

Be sure to review your insurance policy regularly to ensure it still covers the most likely risks associated with renting out dwelling. Our sister company, Bode Insurance Solutions, offers landlord specific insurance.

Disputes don’t have to derail your rental business. With the right approach, you can protect your dwelling, your income, and your peace of mind. Our Fully Managed service means we cover everythig for you, including communication with your contract-holders. To find out more, get in touch with your local branch.