Reading time: 3 minutes

Alternative Dispute Resolution (ADR) is gaining traction as a popular alternative to litigation to resolve disputes. It is now a core subject taught to many law students across Australian Universities.

Leasing disputes are no exception and ADR, especially mediation, is increasingly used to resolve leasing disputes and preserve Landlord/Tenant relationships.

Leasing Disputes 

Leasing disputes can arise at any time during the lease relationship, such as:

  • pre-lease negotiations,
  • during the term of the lease, and
  • make good requirements at the end of a lease.

Many leases are 5 or 10 years in length, including option periods.

This is a long period and understandably, or perhaps inevitably, a Landlord and Tenant might have a difference of opinion during a leasing relationship.

Mediation v Litigation

Landlords and Tenants can choose to resolve disputes through litigation or ADR.

This article concentrates on mediation as an alternate way to resolve disputes. Notably, however, processes such as early neutral evaluation or arbitration can be employed to resolve a dispute.

Litigation can be:

  • Expensive – the solicitor/client costs and for the unsuccessful party, party/party costs;
  • Long – it can take a number of years to resolve the matter, particularly if the party appeals a decision; and
  • Uncertain – until the Court has made its decision the outcome is never known.

On the other hand, mediation:

  • is a more informal process than litigation;
  • is cheaper – parties can share the costs and the dispute can be resolved relatively quickly;
  • is confidential, with mediations conducted on a “without prejudice” basis; and
  • provides certainty for parties. While the parties may have to compromise their respective positions, at least both parties walk away knowing that position and can move forward with certainty.

Mediation can also be beneficial in that it brings the parties together face to face and helps them see and appreciate the other parties position, hopefully meeting somewhere in the middle.

Does Mediation Preserve Relationships?

If the parties have an ongoing business relationship, this change in perception can be invaluable.

Leasing disputes fall squarely into this category with most Landlords and Tenants having an ongoing relationship with one another. If mediation successfully resolves the Landlord and Tenant issues early on, the balance of the lease term may continue. This resolution may also allow any make good discussions to proceed smoothly.

When parties choose litigation, they commonly tend to become entrenched in their positions. You can easily maintain a combatant position when ensconced in your lawyer’s office and not sitting across the table from your opponent and considering his or her point of view.

A successful mediation relies upon the willingness of all of the parties to participate fully and voluntarily in the process. It requires the parties shifting their perception. They need to focus on resolving the problem, rather than rehashing past behaviour and slinging personal attacks.

Is Mediation right for your dispute?

Although Mediation is not necessarily successful in all disputes, it is certainly worth pursuing and committing to the process wholeheartedly. It might prove a cheaper and less stressful way to resolve your dispute.

Conclusion

Should you have any questions, please do not hesitate to be in touch. We have experienced leasing lawyers who advise on commercial leases and leasing disputes. We would be delighted to assist so please call our legally trained client care team on 1300 544 755.

Webinars

Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Online
Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Online
Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer