The real estate attorneys at Brewer Offord & Pedersen have engaged in hundreds of mediations where we’ve utilized our strong negotiation skills and deep industry expertise to reach settlements for our clients. Our firm is a staunch proponent of the alternative dispute resolution process and will advocate for mediation as a cost-effective, confidential, and efficient way to resolve real estate law disputes.
In addition, our firm offers real estate mediation services, whereby our attorneys will serve as the neutral intermediary between the two parties engaged in mediation. Simon Offord is a certified mediator who is frequently sought out by real estate brokers, agents, investors, buyers, sellers, and other law firms to serve as an impartial third party.
Simon Offord, Certified Mediator
Simon Offord provides strategic and pragmatic representation to his clients through a combination of deep industry knowledge, significant litigation experience, and strong communication skills. Simon is meticulous in his ability to craft winning strategies for clients in a range of commercial and residential matters. Along with a multitude of arbitrations and mediations, Simon has litigated cases in both state and federal courts, has argued as lead counsel in both bench and jury trials, and has prevailed in several appellate trials. Attorney Offord is a licensed California real estate broker (DRE #01890548) and a certified mediator through the Chartered Institute of Arbitrators and the International Mediation Institute.
Introduction to Real Estate Law Mediation
Legal disputes involving California real estate are contentious, and often the parties are eager to litigate as a way to protect their property rights or to obtain compensation. However, taking a case through the trial or arbitration process is expensive, risky, and lengthy – most cases take years before they ever make it to trial. As a result, the vast majority of real estate disputes are resolved outside of court, with the parties reaching a settlement on their own or engaging in a process called mediation.
Mediation is a form of alternative dispute resolution whereby the parties engage a neutral third party to help them reach an agreement. During a mediation, the parties will present their arguments to the mediator, and the mediator will work back and forth on a possible settlement. The mediator is oftentimes a licensed attorney who reviews the facts and arguments to determine their own individual assessment of the case, including the areas that could lead to a possible settlement. They will bring offers and counter-offers to the parties and collect their feedback, in hopes of finding a mutually agreeable resolution.
Where there are disagreements, the mediator may offer their opinion and guidance on the case; but ultimately, each party has the full and unencumbered capacity to accept or reject a settlement offer. The mediation process is totally confidential, and items discussed during the process cannot be brought as evidence in any legal proceedings. While a settlement agreement is the preferred outcome of the process, the mediation could instead determine that a mutually acceptable settlement in the case is not possible, in which case the dispute would continue in the direction of trial.
Mediation in California Real Estate Law
The most common real estate dispute in California is a breach of contract dispute, whereby one party believes another party did not uphold the terms of their agreement. Disputes involving a breach of the residential purchase agreement can involve failure to disclose material facts, failure to act (such as to make repairs or to close escrow), or disputes of earnest money deposits. Breach of contract can also extend to offers to purchase real estate and to agreements between real estate brokers and their buyer or seller clients.
In most residential real estate purchase agreements in California, parties are required to make a reasonable effort to resolve their dispute through mediation as a condition for recovering their attorney’s fees. A buyer or seller typically must either demand mediation or agree to participate in a mediation session before filing a claim in superior court, otherwise they forfeit their ability to collect their attorney’s fees should they prevail at trial. The mediation clause in the residential purchase agreement (the most popular being the California Association of REALTORS® RPA) makes this specific requirement that the parties try to resolve any differences through the mediation process before pursuing any other legal action.
Mediation Services at Brewer Offord & Pedersen LLP
The mediation services at Brewer Offord & Pedersen are particularly effective at helping clients reach settlements because of our advocacy skills, our industry expertise, and our legal experience. Our mediators have strong negotiation skills that have been developed through years of working with a wide range of clients. Because our attorneys have been on both sides of hundreds of mediations, they have a keen understanding of the motivations, pressures, concerns, and motives of both parties in a dispute. We prioritize empathy and compassion, ensuring that each party has the opportunity to share their perspective and make their arguments without any prejudice. We carefully balance competing viewpoints within the full picture of the situation, and identify opportunities where there could be mutually-agreeable resolution.
Having an extensive background in real estate litigation and decades of experience working in the real estate industry, our mediators have a developed a unique understanding of the levers of influence that can help parties resolve their disagreements in an amicable way. Our mediators are proficient with the common tools, pitfalls, and techniques for helping clients through mediation, but they also have the awareness and competence for proposing creative solutions that yield mutual satisfaction.
Frequently Asked Questions
Are settlement agreements from real estate mediation legally binding?
The process of mediation is non-binding, but agreements reached during mediation can be enforced under California law, so long as they are written as a proper agreement. Often, terms will be discussed and generally agreed to at mediation; however, until the terms are codified into a legal agreement that is executed freely by both parties, the terms are not binding. Once a mutually acceptable solution is reached, the terms should be written into an agreement in accordance with California law, meeting all legal requirements of a contract.
Is mediation required in California real estate law disputes?
In California, the most often used residential purchase agreement requires the parties to try and resolve any dispute through mediation first. This is outlined as a prerequisite for receiving attorneys' fees should the case go to arbitration or trial. A party cannot receive attorney's fees at trial if they do not either demand mediation, attend a mediation session, or make a good faith effort to mediate their dispute before filing the case in superior court. In addition, failing to attempt mediation opens the door for the opposing party to file a motion to compel arbitration, where the court will either stay or dismiss the case without prejudice. So, parties are strongly incentivized to seek mediation.
How do I choose a good mediator for a real estate dispute?
You will want to select a mediator that has the best chance of helping you resolve your matter. The qualities of an effective mediators include the ability to be impartial, calm, understanding, empathetic, and transparent in the process, while upholding the values of integrity and professionalism. The most effective mediators are those who have been trained and certified by a reputable organization, such as the Chartered Institute of Arbitrators or the International Mediation Institute. You can hire an independent mediator or select one from a panel of mediators through an ADR service provider. Having a mediator who understands the body of law in which your dispute is rooted is critical to an effective mediation.
Are attorneys allowed to be present during real estate mediation?
Yes, clients may have their attorneys attend the mediation process, as well as, on occasion, witnesses or experts that can help them articulate their legal position. The mediation process is confidential, and all participants will sign a confidentiality agreement. Nothing that is discussed during the mediation process can be used in future legal proceedings or be subject to legal discovery.
Who pays the fee for a real estate mediator?
The mediator will typically charge an hourly fee for their service. Payment of this fee is normally split equally between the two parties, as stated in the most common residential purchase agreement, the California Association of REALTORS® RPA. Payment for the mediator, however, can be negotiated between the parties. Those parties to the mediation will also separately have to pay for their individual attorneys.
What happens if a settlement is not reached during a real estate mediation?
While parties are required to make a good faith effort to resolve their real estate dispute in mediation, there is no requirement for them to reach an agreement. While most mediations do result in an agreement, there are many times that a mutually agreeable resolution cannot be reached. If unsuccessful at mediation, the parties can then proceed to arbitration or with filing a claim in superior court. Additionally, the parties may try the mediation process again, either with the same mediator or with a different mediator, if they feel they may be able to find common ground.
What party can ask for mediation in a real estate dispute?
Either party has the right to demand mediation in a real estate dispute. It is required in some instances for both parties to either demand mediation or to make a good faith effort to participate in the mediation process.
When in the real estate dispute process should I ask for mediation?
It is beneficial to ask for mediation as early in the real estate dispute as possible. Since most real estate transactions are time-sensitive, engaging in mediation as soon as possible can help prevent any significant delays or missed opportunities. In addition, the sooner that a dispute can resolved, the fewer attorney expenses will be incurred. The mediation process is a fantastic tool for resolving disputes, in that it gives an opportunity for both parties to state their grievance and attempt to find common ground. Engaging in this form of dispute resolution early on can prevent further conflicts from developing and embittered emotions from deepening.
What is the difference between mediation and arbitration?
During mediation, a neutral and independent third party will negotiate with the opposing parties and help them try to reach a mutually agreeable solution to their dispute. The mediator will make recommendations and help the parties find common ground, and if a solution is reached, help with codifying the terms in a settlement agreement. However, the mediation process is non-binding and both parties have the ability to accept or reject any final resolution. On the other hand, arbitration is a process by which a neutral arbitrator will listen to the facts of the case and make a decision in the case in their own capacity, essentially as the judge. Their final adjudicated decision may be mutually beneficial or it may favor one party over another. Arbitration can be binding or non-binding, depending on the contract terms and what the parties agreed to.
What are the cost savings of real estate mediation compared to the costs of trial?
Mediation for real estate disputes is an extremely cost-efficient way to resolve conflicts compared to trial. The cost of mediation includes the fee for the mediator's time, often split evenly between the parties, plus the fees for your attorney's time. There may be additional fees for drafting and executing a settlement agreement, and for completing the terms of the settlement. For most disputes, that can mean resolving the dispute for just a few thousand dollars. The costs of going to trial are extremely high comparatively. Going to trial requires significant amount of attorney time, meaning you will incur significant attorney's fees during the entire trial process. Trial requires the payment of many expenses, such as court filing fees, court reporter fees for depositions, legal research fees, technology fees, printing and postage fees, expert witness fees, jury fees, process server fees, and many other costs. And while the prevailing party can attempt to recover attorney's fees, there is always the risk of not recovering the entire amount, or even prevailing. The cost savings available in mediation make the process an extremely attractive option for resolving your real estate dispute.
