Mediation - YOUR LAST, BEST FINAL OPPORTUNITY

Disputes happen. They are part of the process of every real estate transaction. Most often, the parties are able to work out the details and avoid a more serious conflict. But sometimes the parties can’t reach a timely agreement, and the deal stalls or falls through. Where substantial money is involved, the parties need to resolve the dispute so they can move on. Almost every real estate purchase contract, whether created by CAR or PRDS, includes a “dispute resolution” provision that requires the dispute must be resolved by arbitration, not by going to court. These same contracts also provide that the arbitrator may only award attorneys’ fees to the prevailing party if the parties first attempted to resolve their dispute by mediation.

What’s the difference between mediation and arbitration? One practical way to understand the difference is that in arbitration, the neutral Arbitrator weighs the evidence presented by both sides and issues a ruling, very much like a Judge would issue a ruling. However, unlike a decision by a Judge, there is little or no chance to appeal the Arbitrator’s decision - it is binding and final. In mediation, on the other hand, the neutral Mediator helps the parties reach their own decision, which becomes binding and final. The big differences here, in most instances, are (1) the parties themselves, sometimes with the help of their attorneys, negotiate a settlement agreement; and (2), the process takes a couple of hours, not weeks or even months - or years! Mediation is the last, best chance for the parties to come up with their own resolution of the dispute. All other forms of dispute resolution — through arbitration or court trial — involve decisions made by third parties.

How does Mediation save you money? First, it’s relatively fast, and time is money when it comes to legal disputes. A mediator can usually schedule a mediation within a short period of time after the parties agree on the mediator and a date. Some mediators, like Mr. Hare, use an online platform (Zoom), that avoids the scheduling complications of plane flights, hotel bookings, etc. Second, working with a mediator who has experience in the types of legal issues involved in the dispute, the parties can focus on the specific elements of the dispute. As a licensed real estate broker and an extensive background in land use, planning and construction litigation in both the public and private sector, Mr. Hare is familiar with many of the practical, real-world aspects of many of the common types of issues that arise in a transaction. Third, typically in a mediation, the parties split the hourly rate of the Mediator. As a consequence, the parties can quickly schedule a mediation, work out the problem without incurring the extraordinary costs associated with litigation, and with the assistance and guidance of an experienced Mediator, find a mutually-agreeable, binding settlement on their own terms within a relatively short period of time and at a substantially reduced cost.