A little-understood provision in the standard form used in San Diego for residential real estate purchases is the mediation clause. In it, the buyer and seller agree to mediate any dispute they have. If a party refuses to mediate, the party is denied attorneys fees that he or she might otherwise be entitled to in subsequent litigation or arbitration.
Due to the complexity of real estate transactions and the nature of California's laws, which favor the buyer, disputes do arise both during escrow and after. The purpose of the mediation clause is to get the parties to the table where, under the expert guidance of the mediator, they can resolve the dispute on their own terms, expeditiously and inexpensively.
In arbitration, another clause in the standard form that the parties often sign, a third party -- often a lawyer or retired judge -- decides the dispute, and that decision is binding, just as if a judge made it. But there is no appeal from an arbitration award like there is from a judgment.
So besides being quick and inexpensive, one advantage of mediation is that no third party imposes a decision -- the parties find their own terms for resolution.
Another advantage to mediation is that the parties don't have to go through lengthy pretrial proceeding, such as depositions, and then sit through a trial. The proceedings and especially the trial can be so distracting and upsetting that a party loses grip on the rest of his or her life. And after all that, your life is in the hands of a judge or jury. In either case, the decision often seems to be wrong.
In mediation, a neutral trained mediator guides the parties to their own resolution. At the San Diego Real Estate Mediation Center, our mediation success rate is near 80 percent and that is about as good as any mediation program gets.
When agreement is reached, payment soon follows. Seldom is there any need to pursue collection procedures, as is often the case after a court trial.
There are other good mediation programs in San Diego besides the San Diego Real Estate Mediation Center. The major ones are the American Arbitration Association, J.A.M.S./ENDISPUTE and the National Conflict Resolution Center. Cost varies widely, but the real estate program is one of the least expensive. It is available to any buyer or seller, as well as Realtors.
Submitted by Bill Simmons, attorney at law, for San Diego Association of Realtors