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 Or contact the DiJulio Law Group: Los Angeles real estate attorneys with more than 35 years of experience. Call 888-519-1613 or email


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.