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WHY YOU CAN’T GO WRONG WITH MEDIATION

Mediation is a process where a third party, called a mediator, helps to resolve different disputes, as well as real estate disputes.

For several years, real estate dispute has posed a danger to lives, properties, and even relationships; particularly landlord-tenant conflicts which often become a hindrance to a healthy and sustainable relationship between parties involved. It is why many countries across the world embrace the Alternative Dispute Resolution [ADR] approach to solve disputes and maintain peace amongst parties. Alternative Dispute Resolution or mediation is recognized to be an efficient, stress-free, cost-effective, and objective way of resolving several conflicts, including real estate related conflicts.

Aside from tenancy conflict, many other disagreements could arise during real estate transactions, whether commercial or residential. There could be conflict during the purchase of a real estate property when parties can’t agree on certain parts of the purchase agreements; or a breach of contract from either one of the parties. Whatever the case may be, mediation is the best method to employ to quickly resolve the conflict confidentially and objectively at a low cost.

Mediation is a better option for resolving conflicts because a mediator must be equally responsible to all parties involved in a mediation session without bias. A mediator has no power or right to impose a conclusion of any sort on any of the parties involved. What a mediator is required to do is to help move the discussion or negotiation process to a place of resolution.

Mediation also allows for each party to be equally listened to and understood without been blamed. This process is achieved through a certified mediator who has integrity, commands respect, confidence, and someone who specializes in resolving real estate-related conflicts to avoid violence, injury, and damage to properties, persons, business images, and relationships.

The process of mediation is simple compared to court proceedings. It involves the planning process where the mediator reaches out to interested parties to discuss the time and location of the mediation. The private process is where the mediator speaks privately with each party to discuss the underlying issues and the party’s interests. The joint discussion is where both parties come together to discuss the subjects of conflict, ask questions, make their cases to reach a mutual agreement.  The negotiation process, however, is the stage where parties propose ideas to meet each other’s parties.

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WHY MEDIATION? HERE’S WHY.

Mediation is not the same as a court session as many may think. It is an interactive procedure where parties involved in a conflict come together to resolve their differences with the help of an impartial third party, known as a mediator. Unlike the court session where parties involved formally present their cases through the help of a lawyer and await judgment, mediation employs the help of a mediator to open up communication through specialized conciliation technics dedicated to achieving mutual resolution. Though, either of the parties may have his/her lawyer present during the mediation process if that would make them comfortable, or if any of the participants need a lawyer to help interpret the terms and conditions of the negotiation.

Mediation is a fair process where blames are not passed, rather it focusses on the rights, needs, and interests of parties involved to help them seek mutual agreement. A mediator achieves this by managing the interaction between the parties, recognise, evaluate, and analyze core issues without giving definite advice as to how to resolve the conflict. The mediator only helps to stimulate conversation which will yield beneficial and favourable resolution for the parties involved.

Mediation can take place at any time. Parties could seek the help of a mediator before or after the close of any business transaction. It is applicable in many several areas such as; childcare plans, grievances, land conflict, partnerships, discrimination, family feud, divorce, wrongful, work termination, real estate conflict, religion community conflict, and many more.

Mediation also helps you gain recognition; It allows the other party to hear and understand your point of view which helps to speed up the resolution process to achieve an acceptable agreement by both parties.

Therefore, in this era of global community, conflict is unavoidable. It is our collective responsibility to attempt to resolve our differences through the channel of mediation. Mediation does not only focus on resolving disputes but also helps parties to efficiently move on with their lives and businesses.

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How Do I Prepare for Real Estate Mediation?

Real estate disputes can happen for any number of reasons.

It might be that the seller of a home failed to disclose issues with the neighborhood sewer system, or a boundary dispute, or a disagreement between two co-owners.

And when these disagreements can’t be easily resolved, they often transform into lawsuits. But there’s an alternative to letting real estate disputes evolve into drawn out court cases: real estate mediation. Mediation is a form or Alternate Dispute Resolution. Unlike arbitration, which is another form of Alternate Dispute Resolution, mediation is voluntary.

Most real estate contracts now include terms that require mediation before the parties can initiate an action in court. Before bringing suit or before proceeding to arbitration, the buyer and the seller will agree upon a mediator to help them reach a settlement.

If you are about to begin real estate mediation, here are some things you can do to prepare:

1. Lay the groundwork

Do your homework. Try to determine what you hope to achieve through mediation. Work out how to illustrate the ways the dispute has affected you.

Prepare a detailed summary of your damages, and get estimates, invoices, receipts, checks and any other documentation you might need.

Finally, try to put yourself into the other side’s position to see if there is validity to the other side’s position.

2. What’s your plan B?

Figure out what steps you can take if mediation doesn’t work. Think about the risks of litigation, the cost, the time you’ll need to devote preparing for trial and the chances that you might not succeed in court.

If the mediation isn’t successful, what’s your next move? Will you take the case straight to court or try to settle the matter through arbitration?

Arbitration is similar to traditional court litigation. In arbitration, the parties make their case to a neutral third party (the arbitrator) who will render a decision in favor of one of the parties. For the most part, the arbitrator’s decision is final and binding. Unlike real estate mediation, which is voluntary, once the arbitration gets underway, neither party can withdraw except by an agreement. You won’t be able to stop the arbitration process if you become uneasy about the outcome.

3. Exchange information

Before the real estate mediation process begins, exchange information with your opponent and their lawyer. Give them a list of your claims and any supporting information, along with a summary of the damages and evidence of your expenses. You should also provide a summary of the witness/expert testimony you plan to present.

4. What do they want to get out of this?

You should try to determine what the other side hopes to achieve through mediation. Try to acknowledge what – if any – valid positions they might have. Do you owe them anything? Is there anything that’s low cost to you but of high value to them?

5. Final thoughts

Finally, identify everyone who needs to be there: family members, brokers, insurance adjusters, etc. There might also be industry specialists you want to recruit, such as home inspectors or contractors.

And remember that you and the other party are the decision makers here. The mediator’s job is to facilitate negotiation, to remove the emotions. The mediator should be a neutral objective party whose job it is to encourage the parties to negotiate a fair and reasonable resolution of the dispute. Mediation generally succeeds when the mediator is skilled and when both parties participate in good faith. Litigation is advocacy. Each side advocates his or her position to the judge and advocates why the other side’s position lacks merit. By its nature, litigation is adversarial. Mediation is about trying to negotiate a mutually satisfying outcome of a dispute with the assistance of a skilled mediator.

Contact us today and we can get to work on reaching an agreement that satisfies both you and your opponent’s wishes.

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Mediation Process

Mediation is an informal and flexible dispute resolution process. The mediator’s role is to guide the parties toward their own resolution. Through joint sessions and separate caucuses with parties, the mediator helps both sides define the issues clearly, understand each other’s position and move closer to resolution.

Most often, mediations start with a joint session used to set the ground rules and an agenda.  The joint session also helps define the issues and determines the parties’ positions.

Generally, during the process, parties move to separate caucuses. The mediator will carry messages—offers, counter offers, questions, demands, and proposals—between both sides to help the parties move closer to resolution.

FINRA mediators have subject-matter expertise, so that parties may select a mediator who is knowledgeable in the areas of controversy that are the subject of the dispute. Thus, mediators can often give each side an expert, yet unbiased, view of the strengths and weaknesses of the case overall. They may also discuss with the parties what might happen if the dispute does not settle.

The mediator has no authority to decide the settlement or even compel the parties to settle. Mediation is non-binding, until parties agree on a resolution. If the matter does not settle, the claimant has preserved the right to pursue arbitration.

A typical mediation progresses through the following stages:

  • Initiate a Mediation
    The parties may file a Request for Mediation to begin the process, or, if the matter is already in arbitration with FINRA, they may contact their arbitration administrator for a referral to mediation.
  • Mediator Selection
    Once the parties begin the mediation process, they learn how to select a mediator.
  • Mediation Sessions
    The parties will learn what takes place at a mediation session.
  • Settlement
    A settlement occurs if the parties resolve their dispute.
  • Impasse
    Impasse occurs if the parties do not settle their dispute.
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Real Estate Mediation and Arbitration for Disputes

When are alternative dispute resolution methods appropriate?

Just about any type of disagreement or dispute can be resolved using mediation or arbitration. Usually the dispute will be resolved more quickly and at a lower cost than through litigation of any type.

Repair and inspection issues, costs for repairs, earnest money disputes, and claims of misrepresentation about the condition of the property, appliances or fixtures are all examples of situations where mediation and arbitration are effective and less expensive.

When are these types of resolution not appropriate?

If one party is alleging some type of criminal conduct on the part of the other, then these alternative dispute resolution options shouldn’t be used. In disputes between realtors or ethical complaints against them by consumers, there are procedures for arbitration in place through NAR that should be used. If the dispute involves very complex issues of legality or property rights, it would probably be better to utilize attorneys and the legal process of litigation.

How long does it take and what’s the cost?

Generally, mediation and arbitration are conducted within a few months of the dispute arising. For mediation, there are usually just a few hours involved in one meeting to achieve mutual agreement or decide that the dispute must escalate. Arbitration can be a bit more lengthy, as the arbitrator or panel will want to be sure that all pertinent facts are discovered and understood before making a decision.

The parties usually split the cost and mediation will be charged at the mediator’s hourly rate. Arbitration can be charged hourly or on a daily fee basis, almost always resulting in much less cost than litigation.

Can an attorney accompany the principals?

Any party to a mediation or arbitration proceeding can bring their attorney along.

It is frequently not done in the simpler disputes, as it raises the costs, and the parties believe that they can reach agreement on simple issues without representation.

Is arbitration always binding on the parties?

Arbitration can be either binding or non-binding, as agreed to before proceedings begin. If it is agreed that the decision will be binding, then the decision rendered must be adhered to by the parties.

Also, when the agreement to mediate or arbitrate is part of a real estate contract, then the parties are bound to do so before they can escalate the dispute to litigation.

Mediation and Arbitration Clauses are Good for All Parties

With all the pressures involved in a real estate transaction, the dollar amounts involved, as well as the possible emotional attachments of sellers to their homes, disputes can happen at any time. This isn’t in the thoughts of the principals when they’re negotiating a transaction, so it’s a good thing to have an agreement in the purchase contract to mediate or arbitrate disputes before other action.

When a consumer believes that a realtor has acted unethically or made errors that caused them damage, the processes in place for arbitration can usually fairly resolve the issues and avoid undue expense on the part of either the consumer or their agent in getting to the resolution.

In any case, there are great burdens on our judicial system from lawsuits for all manner of presumed damages. Whenever the parties can resolve their issues without utilization of the court system, it’s better for all.