Whether one is a real estate professional or a first time home buyer or seller, the opportunity for conflict in the property buying/selling process is always present. Conflicts can include: a seller's failure to disclose unfavorable information about property; repair issues; inspection issues; a real estate professional's breach of duty; earnest money disputes; and co-owners’ dispute over how to divide or renovate property. Where a sales contract has already been executed, walking away from the deal is not even an option.
While the Courts are available to resolve for a number of disputes, litigation is not an attractive option for most people dealing with real estate.
First, when real estate is involved, most people do not want to wait months to years for a resolution for their conflict. Time is generally of the essence where property is being bought, sold or built. Further, most people do not want to put the time and effort necessary to succeed in litigation.
Second, people in the real estate field, including contractors and inspectors, do not want to risk the damage to their reputation caused by unfavorable allegations raised in litigation or unfavorable judgments. A negative outcome may even impact the professional’s licensing. Court records are almost always public records.
Third, the cost of litigation can be prohibitive. Most homeowners' or renters' insurance policies do not cover the cost of either a defense or for the payment of damages.
The mediation process offers a solution to these problems. Mediation is a confidential process where a neutral third party trained in conflict resolution helps people resolve disputes in a mutually agreeable manner. Mediation can take place as soon as the conflict arises, and it can be completed in a matter of days or even hours. Mediation s a comparatively inexpensive option because is can be completed quickly, and the parties share the cost. The parties do not have to involve attorneys. Further, mediation repairs relationships, and professionals may even continue to get referrals from a once disgruntled client. Finally, mediation is highly successful. Most mediations result in an agreement, which is binding on the parties.
The real estate industry is beginning to recognize the benefits of mediation. A clause requiring mediation is now found in almost every purchase agreement. The National Association of Realtors® requires mediation services to be available to all members and their clients for certain conflicts. The Arizona Association of Realtors® offers mediation to every case that is appropriate for arbitration. In favor of mediation, the Arizona Association of Realtors states on its website: “Mediation can promote amicable resolutions and reduce the need for a more formal and complex arbitration procedure." Mediation is not recommended, however, where criminal allegations are alleged.
Where there is real estate conflict, there is generally a peaceful, non-litigious solution. Mediation is available to build relationships and speedy and cost-effective resolutions.
Written by Alona M Gottfried. Ms. Gottfried is a mediator and attorney in Arizona... She can be reached at:480-998-1500 or emailed: Alona (at) sglawaz.com. You can learn more about Ms. Gottfried and mediation at Alona's Blog.
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