A landlord wants to terminate a leasehold prematurely. Landlord and tenant have an ongoing dispute how to interpret the terms of the contract. Besides the value of the buildings in combination with the remaining leasehold will have to be valued as a base for a compensation. Expectation of the landlord is that the valuation will settle the dispute as well. The landlord asked their regular valuer to valuate the property, which will take place on short term. 

As the situation stands, it will be unlikely that this valuation will bring a solution. The assumptions set at the start of the valuation will determine the outcome of the value. If the term and tariff of the lease are disputed, a valuation will not match the expectations of at least one of both parties. A valuation based on two scenarios could be considered. However, if the gap in value between both scenarios is too substantial, the two valuations cannot be used as a starting point for negotiations. Without a solution for the dispute, there can be no neutral valuation.

A court case could provide a ruling regarding the dispute. This ruling could then be followed by a valuation. This could be used as a starting point for negotiations however this process could take years, especially if either party appeals the ruling. As everyone has their own needs and interests, all parties could benefit from a short-term solution. Furthermore, the outcome of a court case is uncertain. What is reasonable? One cannot simply predict a ruling.

Instead mediation has been advised to both parties. Individual needs, willingness of both parties and pressure of time are crucial aspects that can affect the process of mediation. In addition, the content of the case indicates that both parties should be able to settle. The prospects of the landlord as a public body losing face combined with the emotions of the tenant could make both parties hesitant to agree to mediation. What’s more, the landlord might think they are the stronger party and not agree to mediation.

As opposed to the uncertainty of a court case, cases like this often settle during mediation. A mediator can stimulate both parties to provide information during the process and in the end the parties will have to agree on a settlement by themselves. Ideally, a mediator supports the process, helps to analyse the dispute and the possible solutions and advises on the risks of a possible settlement. A mediator can only complete this task if he or she understands the matter at hand. This insight is elementary to come to a successful solution in a mediation process.