Should You Try to Negotiate a Settlement in Case of Conflict with a Tenant?

Because of the cost of time and money involved in fighting a lawsuit, you’re almost always better off trying to settle any dispute by first speaking directly with the tenant.

Your goal should be to achieve the best consequence at the lowest cost. If instead, you take actions on conviction or principle (whether right or wrong), you are likely to spend too much time and money.

The first step in reaching a compromise with a problematic tenant is to call and arrange a time to meet. In some cases, unsolicited conversations can be effective, but it's usually not a good idea because the tenant may feel threatened and react defensively. Writing a letter or offering to meet with the tenant to work something out is a good way to let the tenant know you want to settle the matter. Here are some tips for a good negotiation:

  • Ask to hear the tenant’s point of view. Once the tenant starts talking, listen closely and don’t interrupt.

  • Acknowledge key points, even if you disagree with them. Sometimes, repeating tenants' concerns is even a good idea to show that you’ve heard them.

  • Avoid personal attacks. This only raises the level of enmity and settlement can be more difficult.

  • Be courteous, but not weak. Emphasize your preference for reaching a settlement, but let the tenant know you have the resources and evidence to fight and win if you can’t agree.

  • If possible, try to consider the negotiation as a mutual effort to solve a problem. For example, if the neighbors have been disturbed by the tenant’s guests, seek solutions that satisfy the interests of both parties.

  • Put yourself in the tenant’s shoes. What would you want to get out of the solution?

  • When you propose settlement terms, make it clear that you’re compromising. Offers of settlement (clearly labeled as such) can’t work against you if you ever end up in court.

  • For strong motivation, try money. To avoid higher costs later, you may be willing to pay some money now—perhaps by reducing rent for a short period, cutting down the amount owed for damages to the premises, or giving a straight-out cash offer for the tenant to leave (only paying if they give you the keys). If the tenants can get richer from the bargaining table, they may settle at a surprisingly low number.

  • If you reach an agreement, promptly write it down and make all parties sign it. The first draft should be prepared voluntarily by you or your lawyer. If you’re paying the tenant some cash as part of your agreement, please ensure the tenant admits in writing that your payment completely covers the claim.