THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 7, 1995 TAG: 9501060367
SECTION: REAL ESTATE WEEKLY PAGE: 02 EDITION: FINAL
SOURCE: BY DAVID J. McDONALD, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Medium: 82 lines
I read with great interest your cover story Do We Need Lawyers? in the Dec. 17 Real Estate Weekly. Let me begin by stating that in many circumstances I would be one of the first to recommend that an attorney be available to represent a client's best interest at a closing.
However, there is a better way to resolve disputes in real estate transactions. Real estate agents, along with buyers and sellers, are turning to mediation to resolve their differences, whether they be between buyer and seller or two agents battling over split fees.
There has been a good deal of interest by the Tidewater Association of Realtors to incorporate mediation clauses into sales contracts and leases between landlords and tenants to resolve disputes. One major local company is interested in offering mediation training to all their managers.
Placing mediation clauses in contracts binds the parties to try mediation to resolve conflicts rather than going to court and taking the costly litigation route. The mediation session is held at the mutual convenience of the parties. A trained professional mediator can help the parties reach a jointly satisfactory solution.
Real estate agents across the nation have already adopted the mediation process as a superior method for resolving disputes. For example, the Michigan Association of Realtors has adopted the Home Buyer/Home Seller Dispute Resolution System to resolve disputes. In most cases, the disputes involve earnest money deposits or physical defects of the property, including plumbing, roof and leakage, damaged carpets, fire damage and septic tank problems.
Unfortunately, many disputes in Hampton Roads result in litigation, with 90 percent of the cases being settled prior to court, but not before the accumulation of tremendous legal costs. The clients' best interests are not necessarily served because of the time and expense involved. Mediation will:
Help the parties evaluate their claims.
Narrow the issues and deflate extreme demands.
Gauge receptiveness for a compromise.
Communicate proposals or structure a more palatable formula.
Have each party better understand the other party's evaluation of the dispute without violating confidences.
Explore alternatives and search for solutions.
Suggest a settlement of a claim.
Disputing parties elect to go the mediation route for various reasons.
First, it works. According to the American Bar Association, the national success rate for mediation in resolving conflicts is 80 to 90 percent.
Second, you maintain control. Disputants directly participate in a skillfully guided negotiation process in which they make their own decisions.
Third, you maintain privacy. Sensitive personal matters can remain private and confidential.
Fourth, you save money. Mediation typically costs far less than other forms of dispute resolution.
Fifth, you save time. No crowded court calendars delay mediation. No need to get frustrated over court delaying tactics like continuances. Parties can agree to enter mediation immediately and work at a pace comfortable to all.
Sixth, your agreement lasts. Research shows that compliance with mediated agreements is better than court-imposed judgments because each party takes ownership and responsibility for resolution of the dispute.
Finally, you improve communication. The use of mediation is likely to reduce anger, encourage cooperation in the future and improve negotiation, problem solving and communication skills. This is particularly critical when you must maintain an ongoing relationship such as between two real estate agents, landlord and tenant, or buyer and seller.
Real estate lawyer Jerry Douglas said in the Dec. 17 article that if a conflict arises at closing, both the buyer and seller may then hire attorneys, paying them much more at that point than they could have initially hired them for and been protected. Mediation clauses in real estate contracts give the mediation process an opportunity to resolve the dispute before it becomes massive, eating into time, pocketbooks and relationships. MEMO: David J. McDonald is a certified mediator and arbitrator with the
Mediation Center of Hampton Roads. Real Estate Weekly welcomes comments
about published articles or opinions. The address is The
Virginian-Pilot, 150 W. Brambleton Ave., Norfolk, Va. 23510; the fax
number is 446-2531.
by CNB