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1.12 Settlement Negotiations

General Rules

Problems between tenants and landlords can often be settled without the need for a dispute resolution hearing. Even after an application has been submitted, you may want to keep the lines of communication open with your landlord, to see if the matter can be resolved without having to involve an arbitrator. 

Here are some general rules to follow when trying to negotiate a settlement with your landlord:

  • When the opposing party provides a settlement offer, you have three options:
    1. accept the offer outright;
    2. reject the offer outright; or
    3. make a counter-offer – thus rejecting the original offer.
  • If you reject an offer – whether explicitly or implicitly – you cannot decide to later change your mind and accept that offer, unless the opposing party once again extends the offer to you.
  • An offer can be withdrawn at any point before it is accepted. Conversely, an offer can be accepted at any point before it is withdrawn, rejected, or expired, 
  • Consider whether you want your negotiations to be on a “without prejudice” basis. This will prevent your landlord from taking your genuine negotiation attempts and using them against you at dispute resolution or court. If this is a concern for you, it may be prudent to write “WITHOUT PREJUDICE” at the top of any written communication in which you are negotiating.
  • Be aware that a verbal agreement can be considered legally binding. However, if you and your landlord reach an agreement, do your best to put it in writing with signatures and a date.
  • Some settlement agreements specify that the parties cannot rely on anything that was promised in the process of negotiation but not written into the agreement. Before signing an agreement, make sure it accurately reflects what you negotiated.


Arbitrator Assistance

The Residential Tenancy Act says that arbitrators can, “assist the parties, or offer the parties an opportunity, to settle their dispute.” While this can sometimes be useful, you are under no obligation to negotiate a settlement during your hearing. If you feel that an arbitrator is trying to unreasonably pressure you into settling, respectfully decline and request that they instead adjudicate the matter based on the law and evidence presented.

An arbitrator can record a settlement in the form of a decision. If you negotiate a settlement during a hearing, it may be prudent to ask the arbitrator to read back the terms of the settlement as they understand them, to ensure that the recorded decision matches what you agreed to.


Pros and Cons

Pros Cons
Certainty: Dispute resolution can be unpredictable. By negotiating a settlement, you will know and have control over the terms of that settlement, and therefore the outcome, rather than leaving the matter up to the discretion of an arbitrator. Validation: By reaching a settlement, you give up your “day in court”. For some, dispute resolution can be more about having their story heard, and having an impartial decision-maker rule one way or the other, rather than the actual result.
Flexibility: Arbitrators can only produce certain types of orders and decisions, whereas negotiated settlements can include remedies that are unavailable or rarely awarded through dispute resolution. Compromise: Negotiation is about finding middle ground. To reach a settlement, you will almost certainly have to give up something that you could have potentially won at dispute resolution. Before beginning settlement negotiations, consider the range of outcomes you would realistically accept.
Security: Dispute resolution is often an all-or-nothing endeavour that results in a clear winner and clear loser. If you are unsure about your chances, it might be safer to negotiate a settlement. Non-disclosure: There might be a term in the settlement agreement that will prevent you from disclosing the details of the settlement.
Time: Negotiating a settlement can be a quicker process than participating in a dispute resolution hearing. For example, you might have to wait several months for a monetary order application. Are you willing to wait half a year for a chance to convince an arbitrator to award you $1,000, or would you rather negotiate an $800 settlement immediately?  
Landlord Relations: Dispute resolution can be an adversarial process. If the plan is to continue living in the same rental unit, think about how dispute resolution could affect your relationship with your landlord. Depending on the nature and severity of your dispute, it might be worth trying to negotiate a settlement before applying for dispute resolution.