The Benefits of Mediation

Filed under: Real Estate Law

When it comes to real estate and business dealings, most of us hope to avoid conflicts and expect that everything will proceed smoothly. Unfortunately though, sometimes disagreements do happen, and they can activate a sort of legal “fight or flight” response. You may feel determined to hire a real estate attorney and take the conflict to court (at great expense), or you could be tempted to give up (and regret it later).

Luckily, there’s a third option which can bring about a resolution to the problem. Mediation is a process in which a mutually selected neutral third party, experienced in your issues, helps the parties involved in a dispute to find an agreeable compromise.

Real estate attorneys in Southern California report that mediation can be preferable to litigation for several reasons:

    • Mediation is almost always much cheaper than litigation or arbitration
    • Mediation saves time; conflicts are often resolved in days rather than weeks or months
    • Participants maintain control of the outcome, whereas in litigation or arbitration the outcome is left up to the courts or arbitrator to decide
    • More creative solutions can be discussed and agreed upon
    • The mediation environment is more friendly and less threatening than the courtroom
    • The mediation process is confidential and anything discussed during the mediation cannot be used later if the parties don’t resolve the dispute.
    • Relationships between the two parties may be preserved, whereas a lengthy court proceeding or arbitration can feel like a battle
    • Mediation can often times be scheduled within months of the dispute arising

Litigation or arbitration have risks as the final decision is up to the court or arbitrator. However, mediation provides both parties with a chance to craft their own resolution to the conflict. Real estate lawyers often recommend trying this type of resolution over the nerve-wracking “winners and losers” atmosphere usually felt in court or arbitration. In the vast majority of mediation cases, both sides walk away feeling that they have been heard, and leave with an outcome that resolves the dispute for both sides. Mediation is believed to be so fundamental to resolving real estate issues in particular that it is a mandatory part of the California Association of Realtors® Residential Purchase Agreement, the home resale purchase agreement that is used in almost every home sale in California. It even carries a significant punishment if a party fails to mediate – that party loses its right to recover attorney’s fees in any subsequent litigation or arbitration.

While mediation is designed to reach a mutually acceptable resolution of the dispute, each party does have the right to walk away from mediation if they feel it is becoming unproductive. Even in cases where settlement of the dispute was not successful, the prior mediation often proves to have been useful in narrowing the issues and helping to bring about a more focused examination in court or arbitration. Not only is it mandatory in almost every home sale dispute, but it is also simply a smart idea.

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