Disrepair claims: 5 golden rules
Thursday, 14th January 2016
Disrepair claims can give RPs a real headache. Even though the changes in funding rules now make pursuing disrepair claims slightly less attractive to tenant lawyers claims continue to be made particularly as counterclaims to rent possession actions. Preventing claims from happening at all is impossible and tenants can, and do, seek to pursue counterclaims to buy time in proceedings even if such counterclaims are unlikely to succeed.
There are however, a number of steps a landlord can take to make the handling of disrepair claims less painful.
1. Records, records, records
Landlords succeed or fail by their record keeping in these cases. Although it is for a tenant to prove his case, courts, rightly or wrongly, tend to accept that the majority of tenants will not keep records of each and every time they report a problem. Landlords, on the other hand, are expected to have good records - with call logs and completed and sufficiently detailed works orders being crucial. Although it is perfectly possible for tenants to have reported repair issues that may not have been recorded by the landlord, the more complete a landlord's records are, the more likely a judge will be convinced that a tenant's assertion of unanswered repair reports are false.
It is therefore worth investing time and money in ensuring that you have good reporting systems in place. If you work on every file on the basis that it may one day appear before the court, it will be far easier to defend cases which are brought.
2. Ensure that contractors have knowledge about disrepair litigation
Your own repairs staff should understand how disrepair claims unfold, how evidence is given in court and what matters the court will take into account. As such, your own staff should be aware of the importance of accurate record keeping. However, problems can arise with contractors and subcontractors. Often contractors are working under tight financial constraints, meaning they do not have the time to spend on preparing detailed notes. Further, contractors are unlikely to have any understanding of how important their role is. They need to understand how important their one comment on a works form can be and how crucial these works forms can be. Although they may not routinely be involved in giving direct evidence in court in disrepair cases (although in some instances, contractors could well be called to assist), their involvement in such cases can be crucial.
Some landlords may like to offer basic training to their contractors about disrepair claims. At the very least, landlords should be monitoring the documentation they receive from contractors as a matter of course to ensure that any errors or areas of uncertainty are resolved at that time. Landlords may want to consider factoring in these requirements when the tendering process is taking place for contractors.
3. Act quickly - at all stages
The easiest way for a landlord to avoid or easily defend disrepair cases is to act quickly. A disrepair claim can be defended if the landlord can show that it responded promptly to any suggestion of disrepair and that any necessary works were carried out within a 'reasonable' period of time. What is 'reasonable' will depend on the nature of the repair to some extent - but the best advice is always to avoid arguments about timescales and reasonableness, and simply arrange for works to be carried out as quickly as possible. It should be noted that if a tenant is failing to co-operate so access cannot be gained to complete the works, this may count in your favour in some cases and good records of attempts to access should be kept. However, in cases of more serious disrepair, a landlord may need to proactively pursue access with the assistance of a court injunction if necessary.
Speed is also crucial once a disrepair claim or counterclaim has been formally raised - either by way of correspondence or in the course of proceedings. Depending on the nature of the matter, there may be several years' worth of papers that have to be considered and assembled in a relatively short space of time once a claim is made. Do therefore act quickly as soon as a claim is raised. Front-loading this evidence gathering exercise can also have the added benefit of enabling you to take a robust stance from the outset, which could have positive costs implications in the event the matter does proceed to trial.
4. Don't be afraid to be robust
Do not be afraid of robustly defending disrepair claims if your evidence supports such a stance. In some cases, it is possible to apply for a strike out or summary judgment if a tenant's claim appears poor. Although such applications do necessitate an application fee and a hearing if the application is successful it can save money in the long term.
5. But do be prepared to be commecrial
Reaching settlements in disrepair cases can be a difficult balancing exercise. On the one hand, you want to avoid simply paying out to shut matters down; word can quickly spread and before you know it, you can be inundated with claims from tenants who like the idea of having some free cash. On the other hand however, financial commerciality does need to be considered. Defending a disrepair cases to trial can be (a) costly (with little prospect of recovering costs from tenants even if you are successful) and (b) a gamble, where even the most robust cases can fall at the final hurdle. If you have faith in your repairs processes and if you are content that your records are in order, then you may be prepared to pursue a defence to trial. However, if there is any uncertainty, then adopting a commercial approach and seeking an early settlement may be the better option. At the very least, making offers to settle may give you some costs protection in the event that tenants refuse to engage, or have unrealistic expectations regarding the value of their claim. There is no 'one size fits all' approach and each case will need to be considered on its own facts. Adopting a commercial approach can however bring benefits in the long term.
We have dealt with large numbers of disrepair claims for clients and there are tactics which can be applied in addition to the 5 points above. The above factors do, however, apply to all disrepair cases and if landlords bear these points in mind when dealing with any repairs issue, disrepair claims may become less time consuming and costly for landlords in the long term.
This article was jointly written by Joanne Young and Sian Gibbon.