The role of a real estate mediation attorney can be critically helpful in a real estate transaction. It can help the concerned parties decide an out-of-court settlement with a win-win situation rather than pursuing legal battles where one party is almost certain to lose.
Many real estate agreements today have this exclusive clause in it which states that in the event of a dispute between the buyer and the seller, they would both resort to a mediation process before seeking help from a court of law. This is where the need to hire a real estate mediation attorney arises. And why, we will discuss this later.
In this article, we discuss the role of a mediation attorney in detail and how he could offer practical solutions to disputes for quick out-of-court settlements that mutually benefit each party to a real estate agreement.
What is real estate mediation?
Mediation is a form of alternative dispute resolution which means settling disputes outside the courtroom.
A real estate mediation is a voluntary agreement between the parties to a real estate agreement whereby they are willing to put forward their reservations and concerns before each other to come up with a solution that benefits each party in the best possible manner.
To make things smoother, a third-party mediator is involved in these meetings so that he can help resolve the dispute in a neutral manner.
In the end, each party to the mediation process agrees to voluntarily exercise their duties in fulfilling the other party’s rights as decided between them in the presence of a mediator.
Why prefer the mediation process instead of litigation?
Real estate transactions are not always as smooth as they may seem. There are many things, both minor and major, which could at any time create a dispute between the buyer and the seller.
Depending on the magnitude of a real estate transaction, even a small dispute between a buyer and the seller could end up in litigation. Once inside the court of law, it isn’t any more a matter of giving and taking or agreeing to common terms for mutual benefits. Instead, it is always the law that should prevail which might dictate an outcome which neither party would like.
This is because real estate transactions aren’t any ordinary transactions. They involve a lot of paperwork, the need to carefully review every detail and aspect of the property to ascertain the price, make a sound decision as to whether to buy it or not and of course a lot of money. All this increases its significance for parties at each side of the agreement to make sure that they get exactly what they are being promised.
For buyers, this means knowing everything good and bad with regards to the property and no concealment of any material facts and figures which could lead to a change of their decision to buy a property.
For sellers, it means that the buyer will honour their promise to make full payment of the property and would not back out or cancel any payments in escrow.
Key Steps of Real Estate Mediation
Here are some main steps of real estate mediation that you should keep in mind while mediating disputes.
1- Agreement to Mediate
Real estate mediation can proceed if and only if both parties agree to settle the dispute. When disputants show interest to use mediation, an agreement takes place in the form of a real estate contract. For instance, agreements like residential purchases take place in written form for mediation.
2- Initiation of Mediation
Any one of both parties can start the mediation by fulfilling, and submitting its clause to the Mediation Center. The request you submit for mediation must contain the following information:
- Copy of Contract to sell your real estate property under mediation clause.
- Complete information (including names, addresses, and contact numbers) of the parties to whom you want to have on mediation.
- A brief statement about facts and claim amount.
- Dates when your party will be available to mediate in a conference within 4 weeks.
- The amount for filing mediation requests.
3- Response Solicitation
After that, the real estate mediation centre solicits a response from parties to the mediation request. In such a response, mediators’ availability and the filing fee are also present.
4- Real Estate Mediator Selection
One of the important steps of mediation is a selection of a mediation attorney. Usually, this selection takes place within 10 days of response receipt. You don’t need to worry about which is the best mediator because the mediation centre selects a qualified one itself.
Moreover, any person having any personal or financial interest in mediation results cannot work as a mediator. Before finalizing a mediator, make sure that both parties are confident about his impartial, and fair dealings. Make sure that your selected attorney is in accordance with REMC policy.
According to REMC, a mediator can work if and only if he or she can take decisions impartially. Ask your chosen mediator to disclose his potential grounds to get an idea about his fair conductance and impartiality for the matter. This disclosure is basically an acknowledgement to both parties that he or she is not having any relationship affecting your dealing.
5- Venue And Time of Mediation Conference
As the Real estate mediation centre announces a date immediately after ten days of getting a response. However, you can change the date set by the mediation centre. Make sure that the conference takes place within six weeks of receipt of the mediation request. When you do not disagree with the center’s decision time and place, you should inform them to go ahead, so that they can inform other parties as well.
6- Prepare Yourself for Mediation Conference
To prepare your party for a successful mediation, you should do the following:
- Analyze, define, and recognize all the issues and parameters responsible for disputes.
- Evaluate tradeoffs, positions, and course of action.
- Explore different solutions such as the initial proposal to present your all desires in the first, fallback proposal having flexibility and alternatives, and bottom-line solution.
- Keep an eye on the interests of all parties while making a plan.
- Make your proposal legitimate and reasonable to convince others.
- Develop interactive strategies to present and discuss solutions to all the issues.
- Jot down all the facts and figures to support your claim.
- Boost the credibility of your idea with proper documentation.
7- Mediation Conference Conduction
During the conference, you need to be patient not only while briefing your stance but also in understanding others’ points of view. Evaluate every written description to testify its relevance. In complex situations, mediators demand written information. If you want to submit your information to a mediator before the conference, do it at least 48 hours ago. At the end of the conference, your mediator will settle the case by making impartial decisions.
8- Keep the Mediation Confidential
According to the Code of Civil Procedure, no party is allowed to share any aspect of mediation in any other dealing. You might be thinking that you cannot even share suggestions and documentation presented there. But that’s not the case. You can discuss and disclose those points that do not affect the final settlement.
9- Record Your Mediated Settlement
After the settlement of a dispute, the mediator will note down all the terms and conditions of the agreement. In that settlement agreement, all parties will sign. If anyone of the parties requests a preview agreement. Then, there will be a need to redraft it. Make sure to sign the mediation settlement within 10 days of the conference. Also, maintain its record in terms of statistics of your real estate mediation center.
Why hire a real estate mediation attorney?
As a matter of fact, any neutral person can act as a mediator between the parties to a real estate dispute. Just search on the internet for a real estate mediator near me and you will be surprised to see a list of professionals having vast experiences in dealing with out-of-court settlements.
However, these mediators still lack the professional competence which can only be offered by a real estate mediation attorney.
Remember that most real estate disputes generally arise because of non-disclosure of material facts and figures which could have possibly altered the price or the decision of the buyer.
In simple words, disputes arise when there is an infringement of rights, or when one party has been manipulated to enter into the real estate agreement.
Not knowing about their legal rights and the correct mode of action as per the law, any party could file a case against the other in a courtroom. However, this may not only turn out to be unfavorable, but it will also cost a lot in legal fees and require time that neither party would want to spend.
To save from all these avoidable hassles, hiring a real estate mediation attorney is the best choice.
A real estate mediation attorney is aware of all the legal technicalities and could therefore prescribe a quicker and more favorable outcome which not only safeguards the rights of the buyer and the seller but is also as per the laws and regulations.
Benefits of mediation in a real estate dispute
Going for mediation is always the best choice due to the following benefits that it offers –
1- Settlement behind closed doors
In most cases, all the terms decided, and settlements agreed upon during a real estate mediation process remain confidential and aren’t disclosed to the public or outsiders. This isn’t the case in a court dealing.
2- Greater acceptability
The outcome and settlements of a real estate mediation process are more acceptable to each party as they have played an active role in it and have been provided with a greater opportunity to discuss their concerns. This however is never the case in a court settlement where the court needs to decide as per the law and not what the parties want.
3- Right to withdraw without incurring any liability
Any party to a real estate mediation process can withdraw at any time during the ongoing mediation. They don’t need to incur any liabilities since this is a voluntary setup.
However, once litigation begins, none of the parties can back out of it without facing penalties and damages. In the worst case, it could also cause the judge to rule out a decision in the favor of the standing party.
4- Guided procedure
While each party should appoint a real estate mediation attorney to support their stance and have personalized opinions that serve their interest best, a common mediator also works as a guide to both parties.
Unlike this, a judge in a court is there to listen to each party’s plea and not to guide them. Further, attorneys and their clients come well prepared into a courtroom knowing what to say and when. There isn’t much of a chance for an attorney to guide their client during an ongoing courtroom session.
5- Enhanced relationships between the parties
In a dispute involving family members or close relatives, a mediation process could be directed towards making things better. Also, it works to enhance and strengthen the parties bond.
A courtroom’s decision can be so harsh that it could easily damage the relationship between close family members.
6- Cost savings
The mediation process is a cost saver. It is because your real estate mediation attorney will usually charge a fixed fee for the entire session. Contrary to this, the fees involved in legal proceedings are highly unpredictable.
The outcome of a mediation process is always faster than the time it takes a court to settle disputes. It is due to the limited time per hearing and the demand for evidence. Besides that, it also includes other requirements to be submitted in the next hearing.
Besides all the reasons mentioned above, hiring a real estate mediation attorney could help you beyond the obvious. A real estate mediation attorney will suggest if it is appropriate to enter into a mediation process. They will also tell you whether you should initiate a litigation process if there are winning chances.