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June 30

2014
by mydeposits
The adjudicator’s glossary #5: Mitigating losses

This is fifth installment in our ‘adjudicator’s glossary’ blog series. The last four installments have been to clarify some key legal terms commonly used by an adjudicator when they make a deposit dispute decision and this next blog carries on to that effect. You can read the previous blogs right here.

We advise starting at the beginning of this series but if you just want to know about mitigating losses  then beginning here won’t do you any harm.

To quickly refresh, here are the commonly used terms that we’re attempting to unravel…

1)Balance of probabilities (we’ve covered this already)

2)Burden of proof (we’ve covered this already)

3)Weighting (we’ve already covered this)

4)Fair wear and tear and betterment (we’ve already covered this)

5)Mitigating losses

6)Proportionate

7)Reasonableness

8)Unfair contract terms

…but what do they actually mean and how are they used in terms of a dispute?

After all, if this helps you to prepare dispute evidence or even avoid an adjudication in the first place, then it’s worth familiarising yourself with the jargon.

So, what does mitigating losses mean and how does it relate to a deposit dispute?

Mitigating losses

Mitigation in law is a principle that requires a party who has suffered loss (e.g. due to a breach of contract) to take reasonable action to minimise the chance of it getting worse. As a landlord even if you feel you’ve acted within the eyes of the law and to the terms of a signed tenancy agreement, if you fail to take reasonable steps to prevent further potential loss it may work against you and could mean a reduction in the amount you’re able to claim in the event of a dispute.

The adjudication process

Just like in a normal court of law the adjudication process in the event of a dispute is independent and evidence-based. An adjudicator will not ‘assume’ and can only make a decision based on the evidence provided. It goes without saying, the more evidence you provide along with being more transparent with your tenant means a higher chance of success at the dispute stage.

Note: my|deposits cannot interfere or review any decision made by the adjudicator and cannot advise you what evidence will be accepted by the adjudication process.

As a landlord it’s important to mitigate any potential losses.  Communication is vital in a landlord/tenant relationship and can help reduce any potential problems that could occur towards the end of a tenancy. my|deposits new online guide called the Landlord Lifecycle Handbook provides a step-by-step guide on how to be a successful landlord and what to do if any problems should crop up.

Here’s an example of where mitigating losses may occur during a dispute.

Tenants are ready to vacate a property as their tenancy has come to an end.

The tenants fail to attend the check-out meeting and only return one set of keys, instead of two, to the landlord.

The tenancy agreement stipulates that both sets of keys must be returned at the end of the tenancy.

The tenants agree to send the second set of keys by post but the landlord is yet to receive them two weeks after the end of the tenancy.

The landlord chooses to continue to charge the tenants for rent on a daily basis until the keys are returned.

So what happened?

The decision awarded the Landlord one weeks rent and a contribution towards changing the locks. The reason for this is that one week is a reasonable amount of time to give the tenants to return the keys. In order to mitigate any further potential loss to both parties, it was found fairer for the Landlord to pay to change the locks and make the tenant liable for this cost instead of continuing to charge rent. This would bring the matter to a close and neither party would suffer on-going costs.

Our next blog will be about proportionality, but before then you might want to check the full glossary and start familiarising yourselves with the terms.

Disclaimer – all advice and examples contained in this blog are for guidance only. Each dispute is decided on the individual circumstances and evidence provided.

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