The Real Deal

Mediation often saves acrimony in disputes

The next three weekly articles will deal with Alternative Dispute Resolution (ADR) options for real estate disagreements; mediation, arbitration and grievance. Each of these alternatives to resolving conflicts allows the parties involved to work out their differences outside the court system.

When both parties in a dispute seek a quick resolution, at low cost in a confidential setting, and wish to preserve the parties' relationship, mediation is more preferable than litigation. Mediation involves a neutral third party, i.e., a "mediator," meeting with the disputing parties (typically without their lawyers) to attempt to affect a compromise and settlement. Generally, the mediator attempts to develop in each party an understanding of the other party's perspective, and ultimately, encourages the parties to conclude that each bears some responsibility for the problem.

Mediation is "hard" on the problem, but "soft" on the people. The objective of mediation is to satisfy the needs of the disputing parties while preserving or bettering the relationship. If the two parties involved intend to continue working together or have a personal relationship of some sort, mediation is the best alternative to conflict management.

For example, take the case of Joe and Melissa (not their real names). Melissa, Joe's sister-in-law, had agreed to buy Joe's condo at fair-market value but had requested a $1,000 allowance to replace a broken countertop in the kitchen. When the work was actually completed, though, the bill came closer to $2,500 than $1,000. Melissa wanted the $1,500 difference included in the allowance. Joe felt that the original allowance should stand as the final offer. Since Joe and Melissa had a relationship outside of this transaction, and did not wish the situation escalate into bad feelings on both sides, they agreed to meet with an independent mediator.

Many local real estate associations offer mediation services. Joe and Melissa, through Joe's Realtor, set up a mediation process through the Silicon Valley Association of Realtors, the real estate agent's association. During the process, both Joe and Melissa were able to state their cases independently and without interruption from the opposing side. The mediator then suggested a "brainstorming" session to discuss resolution alternatives. Depending on the emotions and issues involved, mediators can have parties retire to separate rooms to figure out recommended solutions or the solution can be a joint discussion that ends with the final resolution.

In Joe and Melissa's case they agreed to split the difference of the remaining $1,500.00 in question to be fair to both parties. Melissa received an additional $750 allowance that left her with $750 in costs for the repair. Both parties agreed that the settlement was fair and that the process of mediation allowed them to resolve the issue quickly and without straining the relationship further.

Conflict resolution is not something most people "enjoy" handling, but given the proper framework, an open mind and a willingness to compromise in order to bring about a successful settlement the mediation process can actually be quite rewarding. Real estate transactions are often emotional and stressful situations simply because buying a home is very personal and usually the largest purchase a person will make. Using an independent mediator to resolve any conflicts that can arise is one way to ensure that the final transaction is perceived successful upon completion.

For more information on Real Estate mediation, contact your local Realtor or the Silicon Valley Association of Realtors at 650.949.9115 or visit the website at www.siliconvalley-realtors.org.

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Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors. Send questions on any topic to: Ask Your Realtor, c/o SILVAR, Los Altos District, 345 San Antonio Road, Los Altos, CA, 94022; call 650.949.9115; or send email to ppompei@siliconvalley-realtors.org.

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