Real Estate Mediation Center

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By on Jun 3, 2013 in New | 0 comments

Mediation Clause Built into the CAR Purchase Agreements Are you aware there is a mediation clause built into the CAR Purchase Agreements that agreed to upon execution of the contract by all parties? This clause is a commitment to resolve matters before they escalate to arbitration or litigation. In Leamon v. Krajkiewcz, home sellers filed a lawsuit to unwind a contract for the sale of their property, which, they claimed, they had signed under duress from the buyers.The parties used C.A.R.’s Residential Purchase Agreement and agreed to mediate any dispute before resorting to arbitration or court action. This clause has what some refer to as a “hammer clause” wherein the party refusing to mediate will be denied recovery of attorney’s fees. In this case, the buyers’ requests for mediation had not been answered. Even though the sellers claimed they did not have a valid contract with the buyers, both the trial court and the Court of Appeal denied their request for attorney’s fees of over $27,000, citing their failure to honor the mediation clause in the C.A.R. purchase agreement. The Leamon case demonstrates that disregard of mediation clauses can carry very real financial consequences for a contracting party. What About Mediation? It is expensive to be wrong when a client does not understand the mediation clause. However, REALTOR®s, cannot advise the clients on mediation when disputes arise. (Only an attorney can give legal advice.) It is a difficult position when a REALTOR® is held out to be the expert in a transaction, and they are. But as we know, the REALTOR®s coordinate the transaction, advise accordingly and give the tools clients need to make educated decisions. Fortunately, when it comes to disputes and finding the right tool to hand the client, the REAL ESTATE MEDIATION CENTER® has become that resolution instrument for buyers and sellers. The REAL ESTATE MEDIATION CENTER® is made up of mediators who are practicing brokers and/or broker/real estate attorneys with over 20 years of real estate experience (ranging from commercial to residential), commission disputes, standards and trends. They are capable of facilitating real estate matters in mediation and have an 80% settlement rate. Mediation can be invoked during and after close of escrow. The center...

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By on Jun 3, 2013 in New | 0 comments

Mediation — A Quick Resolution of Disputes Clarity on a Little Noticed or Understood Provision A little noticed and understood provision in the standard form used in San Diego for residential real estate purchases is the mediation clause. In it the buyer and seller agree to mediate any dispute they have. If a party refuses to mediate, s/he can be denied attorneys fees that s/he might otherwise be entitled to in subsequent litigation or arbitration. Unfortunately, due to the complexity of the real estate transaction and the nature of California’s laws which favor the buyer, disputes do arise both during escrow and after. The purpose of the mediation clause is to get the parties to the table where, under the expert guidance of the mediator, they can resolve the dispute on their own terms, expeditiously and inexpensively. In arbitration, another clause in the standard form which the parties often sign, a third party, often a lawyer or retired judge, decides the dispute, and that decision is binding, just as if a judge made it. But there is no appeal from an arbitration award like there is from a judgement. So, besides being quick and inexpensive, another advantage of mediation is that no third party imposes a decision — the parties find their own terms for resolution. Another advantage to mediation is that the parties don’t have to go through lengthily pretrial proceedings, such as depositions, and then sit through a trial. The proceedings and especially the trial can be so distracting and upsetting that a party loses grip on the rest of his or her life. And after all that, your life is in the hands of a judge or jury. In either case, the decision often seems to be wrong. In mediation a neutral, trained mediator guides the parties to their own resolution. At the San Diego Association of REALTOR®s, our mediation success rate 80%, and that is the norm for any good mediation program. Some of us at the Association have achieved 90% and even 100% success rates. And when agreement is reached, payment soon follows. Seldom is there any need to pursue collection procedures as is often the case after a acourt trial. There are other...

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By on Jun 3, 2013 in New | 0 comments

Mediation – Your Last Chance to Control the Outcome Mediation is often the last opportunity for parties to resolve their differences and avoid a lengthy and expensive battle in court or arbitration. It is the last opportunity to exercise control over the outcome by working with a Mediator towards a mutually acceptable agreement. Lawyers can be of tremendous benefit in helping their clients exercise control over the outcome and in resolving the conflict amicably. Attorneys know from experience the benefits of Mediation and the dangers/risks of Trial and Arbitration. However, an attorney is retained by clients not as a Mediator, but rather as an advocate expected to persuasively argue the strengths of the case and minimize the weaknesses in the hopes of getting the best possible outcome for the client. An attorney as an advocate would be derelict in his/her responsibilities if he/she didn’t make the best case possible for the client. Although the client expects their attorney to act as an advocate, they also require legal counseling and advice on how best to proceed with their case. Here lies the most difficult part of being an attorney. Attorneys must be both an ADVOCATE and a COUNSELOR for their client at the SAME TIME. And perhaps most difficult, attorneys must know the appropriate time to wear each respective hat. Mediation is one of those moments where the attorney must be both advocate and counselor. If he/she fails to be both, ultimately the client loses, and will be dissatisfied with the representation received. The client demands advocacy at Mediation to help achieve the best result and counseling so as to know when to compromise. It is a balance that must be achieved for Mediation to be successful and satisfactory for all the parties. Attorneys thus play an important and crucial role in Mediation. Failing to act as a counselor dooms the Mediation to failure. Bottom line – the attorney has the influence and the power to make mediation successful. The client trusts THEIR attorney more than anyone else in the room, including the NEUTRAL mediator. They will look to their attorney and counselor for guidance and direction. A good mediator recognizes the powerful influence of an attorney, knowing that the...

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