Mediation of Commercial Real Estate Disputes

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Mediation has been proven effective

Mediation has been proven effective in commercial real estate disputes for a variety of reasons. Mediation may be conducted in a timely fashion, often within a few months of the dispute arising. For mediation, it is possible for just a few hours involved in one meeting will achieve mutual agreement or decide that the dispute must escalate. Also, when the agreement to mediate is part of a real estate contract, then the parties are bound to do so before they can escalate the dispute to litigation.

The Trained Mediator

Mediation evolves the parties to the dispute and a trained mediator. This mediator is someone completely unassociated with the dispute and has no vested interest in the outcome. They assist the parties in first identifying the sources of their conflict and then help them focus on the issues of real importance to them. The mediator then guides the parties through multiple possible solutions in an effort to reach an agreement, compromise or reconciliation. Another plus for mediation, when compared to arbitration, is that the parties may develop the solution themselves as opposed to having a solution determined for them by a third party. If the parties do reach a resolution and adopt a mediated agreement, the mediated agreement can be binding.

Litigation may have detrimental effects

If the parties are unable to reach a resolution or are dissatisfied with the mediation process, the parties may decide to pursue litigation. Litigation may have detrimental effects on both parties in a dispute. The value of the parties’ interest may be diminished by injunctions, restraining orders or other restrictions imposed by the courts. A variety of disputes can arise from a commercial property lease transaction depending on the terms of the lease, the type of the real estate and the uses of the property. Due to the possible long duration of litigation proceedings, land or floor space may not have the same value at the end of litigation as it did when the dispute arose.

DiJulio Law Group
https://www.dijuliolawgroup.com

Mediation of Construction Disputes

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Mediation, An Alternative to Litigation and Arbitration

Mediation is an increasingly popular process for resolution of construction disputes for a variety of reasons. Resolving construction disputes with the usual methods of litigation and arbitration can prove costly in terms of time, money and emotional stress. Mediation provides an alternative for contractors, owners, developers, design professionals, and others who are dissatisfied with arbitration or litigation process as a means to resolve their construction disputes. In addition, experience has proven to many individuals that arbitration is not always a low-cost alternative to litigation in dispute resolution.

The process of mediation is one in which the mediator opens avenues of communication between the disputing parties. The mediator, without deciding the issues or imposing a solution on the parties, facilitates an understanding which allows the parties to reach a mutually agreeable resolution to their dispute. The mediator seeks to help the parties to reach an acceptable resolution based on their own ideas of what that resolution should be. A mediator does not pass judgment and so will not render an opinion as to the proper legal result of a particular dispute.

Mediation may be used in resolution of claims or conflicts between disputing parties at any point of the claim process. It can occur prior to the filing of a more formal court or arbitration process or prior to trial. Mediation allows for minimization of legal costs, a gain in control in the decision-making process, and a reduction of emotional stress. Business relationships suffer less damage because mediation provides the most rapid process for full and final resolution of disputes.

Mediation offers the possibility of a quick resolution

Disputes quite often have a negative impact on timely project completion, in addition to negative financial impact when costs accrue on a daily basis. The extensive legal preparation necessary for successful litigation tends to lead parties down a path that may not prove to be the most advantageous approach. Mediation gives disputing parties a voice in the process and also presents the possibility of a quick resolution, unlike waiting for court dates. If you find yourself in a construction dispute, mediation offers you and the other party, with or without your lawyers present, the opportunity to find solutions for problems more quickly than would happen in the courts or arbitration. In a fraction of the time and expense of litigation, mediation allows you and the other party with the help of an impartial mediator to gain control in the outcome and obtain a fair solution to your construction dispute.

DiJulio Law Group
https://www.dijuliolawgroup.com

MEDIATION BEFORE LITIGATION IN REAL ESTATE DISPUTES

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Mediation and Real Estate.

Most houses in Los Angeles are purchased using the California Association of Realtor’s form California Residential Purchase Agreement has. The Purchase Agreement provides that the parties will mediate disputes and this article explains what that means.

The Purchase Agreement at para 17 a (Mediation and Arbitration) states:

“Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction before resorting to arbitration or court action. …If for any dispute or claim to which this paragraph applies, any party (I) commences an action without first attempting to resolve the matter through mediation, or (ii) before commencement of an action, refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action.

If there is between Buyer and Seller arising out of the Purchase Agreement the parties are obligated to go to Mediation before suing – in court or Arbitration. Arising out of means that it something that directly comes from the Purchase Agreement and is less broad than arising from.

First of all, you don’t have to GO to mediation you must OFFER to go to mediation. If the other side accepts that offer or makes the offer, you must go the mediation or suffer the consequences.

　

If you don’t go to mediation, you lose your right to collect attorneys fees, even if you win ths case. This means that you could win the case and lose money. In most cases, the loss of the right to attorneys fees, is a significant factor in the outcome of the case.

The California Courts have reiterated existing California law: “The new provision barring recovery of legal fees by a prevailing party who refuses a request for mediation means what it says and will be enforced.” The attorneys fees provision of the mediation clause “is designed to encourage mediation at the earliest possible time.” Moreover, “opponents accordingly are not entitled to postpone it until they feel that they have marshaled the strongest possible support for their positions in litigation and mediation.” The court also noted that there is a strong public policy in favor of mediation as a preferable alternative to judicial proceedings because it is less expensive and more expeditious.

Real estate parties and their attorneys should in most cases offer mediation first and accept an offer of mediation. Not only, does it gives both sides a chance to settle the case before spending thousands of dollars on their attorneys. In addition in the vast majority of cases, having the right to collect your attorneys fees is a key consideration. Even in a real Estate case for a two million dollar house, waving attorneys fees of $50 or $100,000 hurts.

Waving attorneys fees by an over anxious attorney may well result in a valid claim for malpractice. Before filing, offer to mediate.

For more information contact David DiJuliomailto:rdj@dijuliolaw.com Or contact the DiJulio Law Group: Los Angeles real estate attorneys with more than 35 years of experience. Call 888-519-1613 or email rdd@dijuliolaw.com.

Beware.

What are the Consequences of Not Going to Mediation?

What happens If I don’t Go to Mediation?

When Does the Mediation Clause Apply?

The Mediation Clause.

How to Pick a Mediator Without Darts

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PICKING A MEDIATOR WITHOUT DARTS

Ninety-five percent of all cases settle, and only five percent go to trial but attorneys put 95% of their efforts into the litigation and throw a dart to pick a mediator. Why not make the mediation the best it can be by picking the best mediator for the job?

There are a lot of people who are mediators: retired judges, litigators, transactional attorneys, “recovering litigators,” professional mediators, and feel-good facilitators. Choosing a mediator is more than going to a computer and throwing a dart at one of the top five. There are ways to select the right mediator and increase your chances for a successful mediation.

What is the case all about? Is it two businessmen fighting over money or ego? Is it two neighbors fighting over the fence or honor? Different disputes call for different types of mediations.

Mediation has a greater chance of settling the case if all parties believe in the mediator’s reputation, personality and qualifications. Therefore, a process that comes from the adversarial process, is out. Even more so than arbitrators, mediators must be selected on a consensus basis, rather than being another part of the litigation game.

Just because the “other side” proposed a mediator that they have worked with before, that is no reason to reject that mediator. In fact, that may be a good reason to choose him or her. Remember the mediator has no ability to make you agree to anything you don’t want to, nor can they coerce or pressure you or your client. If the other attorney is proposing a mediator they are probably doing so because they feel that mediator has the ability to settle the case which is better than throwing a dart. If you are concerned that your opposing counsel may have too close a relationship with the mediator, ask the mediator! He will be very unlikely to outright lie to you.

While mediation is definitely an art form more than a science, there are many levels of tangible skills that mediators can study in order to become expert negotiators, facilitators and closers. Some mediators are ex-judges that are used to telling people how it is and forcing them to settle. This does not always work. “If the only tool you have is a hammer, you tend to treat most problems as nails.” The key issue is level of actual mediation training your mediator has (or how many tools they have to pull out of their tool box and use). Remember, if settling the case was easy to do, you wouldn’t need a mediator at all!

If they are highly emotional about the case, they will benefit (as will you) from a mediator who can handle emotional parties and help move them to a place where they can make a decision, gently guiding the case to a smooth settlement. If they are stubborn and intransigent, they may need logic and tenacious persuading. If they are weak decision-makers or are unsure about the fair value of their case, they may need the authority of a retired judge or seasoned litigator.

This may be the hardest part, but it’s critical to know yourself with clarity. For example, if you have a strong, authoritative presence, you may benefit from a mediator who has a softer touch to complement you. If you tend to be more left-brained, or a more logical or linear thinker, you may want a mediator who is more right-brained, more emotionally attuned, and perhaps creative. If you have a client control problem, you may want a mediator whose style is more firm and directive such as an ex-judge.

The important thing to consider in selecting the mediator is that they are familiar with what it takes to discuss the issues and to reach a resolution. It is not enough for the mediator to understand the legal issues; they must understand how to relate enough to the parties and their issues to bring the parties to a mutually agreeable resolution. It is not imperative, but it is helpful to have a mediator who understands the nature of the dispute or has a background in the general area. If the dispute is a dissolution of a family business, it can be helpful to have a mediator who understands partnership and corporate law, business law and contract law. If the dispute is in a technical area then it could be beneficial to have a mediator who has a technical training. If there is a business rather than ad personal dispute, it is helpful to have a mediator that has been in business or ran a firm.

Consider the Difficulty Level of the Case.

Many smaller cases can be less complex, such as a simple collection or personal injury case that most mediators might be able to resolve. Other cases are the type that only a small percentage of mediators can settle them. For example, in a complex construction case, dozens of parties and carries may be involved, all with agendas and limits. You will benefit by trying to match the skill level of the mediator to the difficulty level of the case.

Since the case is much more likely to be resolved in mediation the selection of the mediator may be more important that the selection of the arbitrator, the judge or the jury! Take the time to make a wise choice or take dart throwing lessons.

David DiJulio, Esq.

　

　

　

　

　

　

　

　

　

　

　

　

　

　

　

　

　

　

　

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Consider the Subject Matter.

Consider Your Own Strengths and Weaknesses.

Consider Your Client’s State of Mind.

Consider the Mediator’s Training in Resolving Conflict.

Consider your Opponents Suggestions

Consider the Mediators Reputation.

Consider the Case.

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