The Landlord-Tenant Relationship Breakdown

written by Liad Hadar – Director

Advice from a Hardened Property Litigator

I’ve dealt with hundreds, if not thousands, of landlord-tenant disputes. My firm has been entrusted to represent landlords in some of our country’s most technical legal property disputes. We’ve even helped litigate varying interpretations of the correct shade of white paint.

I could easily have written on the topic of maintaining good landlord-tenant relationships. On a quest to add value, however, I approached this topic from an uncommon angle – identifying, from experience, the exact moment when the relationship between landlord and tenant irretrievably breaks down. With a view to highlighting solutions for both players to prevent the resulting angst, cost and time wastage of this failed union. 

Note: any reference to landlord refers to any individual with an express interest in upholding the value of designated property assets.

Gone are the days of the handshake bond

So often we’ve heard the stories about the “golden days” when clients would approach their banker and obtain a line of credit on the back of a frank discussion and a handshake. With the introduction of committees, sub-committees and seemingly infinite bureaucracy, the banking world and the relationship between its stakeholders has changed so dramatically that the very notion of the above scenario has become implausible.

Despite the corporatisation of landlords in the form of “super-landlords” such as the REITs, there is still scope for landlords and tenants to maintain a mutually-beneficial relationship underpinned by trust and respect. Stripped to its core, the relationship between landlord and tenant remains simple: landlords provide a space to tenants, who pay to lease such space. Unlike banking – there are no direct complications of high-level credit facilities, interest rates and the like. It is a beautifully intertwined, symbiotic relationship.

If it’s so simple – why does it go wrong?

It’s much more commonplace for landlords to complain about tenants and vice versa than the parties praising each other. Is it due to the human nature of negative bias? Possibly. Perhaps it’s the tendency for tenants to believe that landlords are purely profitable entities with endless supplies of cash? Surely they can survive without this month’s rent? Perhaps it’s the landlords who believe that tenants are dispensable and overly demanding? Another complaint about Covid-19 cleaning protocols!?

In my experience, the main cause for the souring of the relationship is the lack of ability to clearly see and consider the other side’s point of view.

A paradigm shift

The best way to understand this is by reference to the below common scenario:

An excellent, long-standing tenant suffers an issue with a leak, a lift, a slight maintenance issue, a rude contractor on site, etcetera. Said tenant sends communication to the landlord with a polite request to resolve the issue. The landlord fails to respond timeously or at all. The issue remains unresolved for a day, which turns to a week, a month. The tenant sends a further communication, this time not so polite. Eventually the landlord responds but fails to commit to attending to the issue or denies responsibility. 

This is “the moment”.

The likely triviality of the issue is then completely lost on the parties. Egos and principles begin to emerge (read: explode). Payments of rental are held back on principle, albeit unlawfully.  The situation escalates, barbs are exchanged. Arrears climb. The relationship falters.

Game over. There is no going back. Litigation ensues.

How do we fix it?

Prevent “the moment” from happening. Anticipate and consider the other’s point of view. For landlords intent on saving time, money and energy, consider the following:

Tenants want to feel that their business is valued. That their concerns are taken seriously and that they can trust the landlord to deliver a standard of service that is deemed reasonable and fair. The tenant wants to feel respected. I would dare to suggest that if the landlord applied an intentional mindset in this regard, there would be a substantial decrease in legal fees for rental collections and evictions. In fact, there would likely be a corresponding increase in rental collections for any landlord who adopts a mindful, tenant-centric approach to asset management. 

That’s not to say that there isn’t a time and place for unadulterated litigation. Let that be an adhoc scenario rather than the default position. As a tenant, understand that the landlord likely has several tenants and a fair window of time should pass before expecting non-urgent issues to be resolved. Both parties, consider the other’s concerns and work together as partners, not adversaries, to resolve issues which are resolvable. They almost all are.

Litigators advising not to litigate

It may be strange for a litigator, a champion of landlords’ rights and interests to hold this view. I encourage landlords to apply the above mindset to rid themselves of unnecessary time, negative energy and costs on avoidable issues. Being true to our firm’s philosophy of assisting landlords to maximize their property asset value, there is no fairer advice to offer.

There are certain relationships which cannot be salvaged regardless of the landlord’s fair actions. Some tenants need to be sued, evicted, pursued. Let us reserve our energy for those cases which truly require it. And be mindful in our efforts to save those that really don’t. But for the majority of relationships that don’t fall into this category: avoid “the moment” by intentionally considering and attending to the needs of the other to maximise the value of your property asset, investment and ongoing relationship.

This article first appeared in Asset Magazine’s April 2021 edition