Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) is an umbrella term for the processes available to landlords and tenants to settle housing disputes without going to court. In England, gov.uk guidance makes clear that ADR should be the first port of call for most landlord-tenant disputes, court action is meant to be the last resort. ADR processes vary in formality, speed, and whether their outcomes are legally binding, but all are designed to be less costly and less adversarial than litigation. ADR in the private rented sector has historically centred on deposit disputes, but the Renters' Rights Act 2025 significantly expands the framework by introducing a mandatory PRS Landlord Ombudsman with broader jurisdiction over landlord-tenant complaints.

The main forms of ADR in the private rented sector

Mediation is a voluntary process where an independent, trained mediator helps both parties reach a mutually acceptable agreement. The mediator does not make a decision, they facilitate negotiation. Outcomes are only binding if both parties agree to a written settlement. Either party can walk away at any point without prejudicing their right to go to court. Mediation is most useful in disputes where both sides have a genuine interest in preserving the relationship, for example, ongoing repairs disputes during a tenancy.

Adjudication is the most widely used form of ADR in the private rented sector. It is the binding, paper-based process used by government-approved tenancy deposit schemes, DPS, TDS, and myDeposits, to resolve disputes over deposit deductions at the end of a tenancy. An independent adjudicator reviews documentary evidence from both parties and issues a binding written decision, usually within 28 days. Neither party can appeal the decision through the scheme, though court action remains open if either party believes the adjudicator made a legal error.

Arbitration is similar to adjudication in that an independent arbitrator makes a binding decision, but it is governed by the Arbitration Act 1996 and is more commonly used in commercial property disputes and contractual matters than in standard residential lettings.

Ombudsman and redress services operate where complaints are made against agents or, from 2028, against landlords. Letting agents and managing agents are required by law to belong to a government-approved redress scheme, either The Property Ombudsman or the Property Redress Scheme, which investigates complaints about agent conduct and can award binding compensation. These schemes are authorised under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.

The PRS Landlord Ombudsman: what is coming

The Renters' Rights Act 2025 introduces a mandatory PRS Landlord Ombudsman for the private rented sector. Under the government's implementation roadmap, the Ombudsman will begin rolling out from late 2026, with mandatory landlord membership expected by 2028. Once operational, all private landlords in England will be legally required to register. The Ombudsman will handle complaints from tenants about landlord conduct, investigate disputes, and issue binding decisions, bringing landlord-tenant redress in line with the established frameworks that already cover social housing and letting agents.

The scheme will also provide landlord-initiated mediation, enabling disputes to be resolved before they escalate to court. Local councils will be able to impose civil penalties of up to £7,000 on landlords who fail to join the scheme, rising to £40,000 for repeated breaches.

In our experience working with self-managing landlords, the introduction of a mandatory Ombudsman is one of the most significant compliance changes for the private rented sector since deposit protection was introduced in 2007. Landlords who already have good complaint-handling processes and thorough documentation in place will find the transition straightforward; those who do not currently keep records of maintenance requests, inspections, and tenant communications will be most exposed.

When ADR is not appropriate

ADR does not remove core legal rights. Some disputes must be taken to court or the property tribunal regardless of whether ADR has been attempted first. These include possession proceedings where a tenant refuses to leave, unlawful eviction or harassment claims, disrepair cases involving serious health risks, and any matter where one party refuses to engage with ADR. Where court or tribunal action is the appropriate route, ADR does not replace it, though courts increasingly expect parties to have attempted ADR before proceedings are issued, and failure to do so can affect costs.

Tenancy deposit adjudication is voluntary, both parties must consent to using the scheme's service. If the landlord refuses, the scheme cannot proceed, though the tenant can then take the matter to the small claims court.

How to initiate ADR

For deposit disputes, either the landlord or the tenant can raise a dispute with the relevant deposit scheme once the tenancy has ended and the parties cannot agree on the return of the deposit. The scheme will notify the other party and invite evidence. Each scheme sets its own deadlines, landlords and tenants should check the rules of their specific scheme promptly, as the window to raise a dispute is typically 90 days from the end of the tenancy.

For agent complaints, the tenant or landlord submits a formal complaint to the relevant redress scheme, either The Property Ombudsman or Property Redress Scheme, after first exhausting the agent's own internal complaints procedure.

For guidance on how deposit adjudication works in practice, what evidence is required, how long the process takes, and what the decision means, see our guide to handling tenancy deposit disputes.

Frequently asked questions

Is ADR compulsory for landlords and tenants? 

It depends on the type. Tenancy deposit adjudication is voluntary, both parties must consent. Agent redress through The Property Ombudsman or Property Redress Scheme is compulsory for agents but voluntary for complainants. From 2028, membership of the PRS Landlord Ombudsman will be compulsory for all private landlords in England, though tenants cannot be forced to use it.

Can a landlord appeal an ADR decision? 

Not through the ADR scheme itself. Tenancy deposit adjudication decisions are final and binding on the scheme. Either party can pursue the matter through the small claims court if they believe the decision involved a legal error, but court challenges are uncommon and the threshold is high. Ombudsman decisions can typically be appealed on procedural grounds only.

What is the difference between ADR and going to the property tribunal? 

The property tribunal is a formal judicial body that hears cases under specific statutory provisions, including rent challenges, leasehold disputes, and certain possession matters. ADR processes sit below the tribunal in the dispute resolution hierarchy and are generally faster, cheaper, and less formal. Where ADR fails or is unavailable, the tribunal is usually the next step before the county court.