Rethinking Real Estate Disputes: Why Mediation Works

By: Elizabeth Lesser 

A real estate transaction is one of the most significant financial decisions an individual and business will make. Disagreements can become stressful, expensive, and take years to resolve. Traditionally, the default solution for parties has been litigation. Mediation is emerging as a preferred method for resolving real estate disputes and is frequently a contractually required initial step. 

Managing Risk and Uncertainty: Even a well-prepared legal case may have an unpredictable outcome in litigation. Mediation allows attorneys to proactively manage risk. By engaging in a negotiation facilitated by an expert mediator, counsel can evaluate settlement options before significant costs accrue. This early risk analysis leads to informed decision-making and better outcomes for clients. 

Cost Efficient: Clients may be cost-conscious, especially when legal fees approach or exceed the amount in dispute. Litigation that may take years to resolve can erode the practical value of a favorable judgment. Mediation offers attorneys a cost-effective forum to advocate for their clients’ interests. A settlement in mediation can create a favorable outcome for both parties by reducing legal fees in litigation. 

Flexibility in Remedies and Outcomes: Courts are limited in the remedies they can impose. Mediation allows attorneys to craft more creative solutions. Settlements may include revised contract terms, structured payments, timelines for performance, property transfers, or agreements governing future conduct. This flexibility creates outcomes more closely aligned with client priorities and the reality of the situation. 

Speed and Procedural Control: Court calendars dictate the pace of litigation. This means that attorneys are reacting rather than directing strategy. Mediation gives control back to counsel and their clients. Sessions can be scheduled promptly and frequently occur remotely. This control is a significant advantage. 

Enhancing Client Satisfaction and Outcomes: In addition to the outcome, clients measure success by other factors, including efficiency, cost, stress, and the ability to move forward. Mediation often delivers favorable resolutions while giving the parties control over the result. Because mediated agreements are voluntary and collaborative, compliance rates are high. 

Mediation as Part of a Broader Dispute Strategy: Mediation can serve as a valuable reality-check, clarifying positions and narrowing issues even if full resolution is not immediately achieved. When used thoughtfully, it complements litigation strategy and enhances counsel’s ability to achieve favorable outcomes. 

Elizabeth Lesser is the California Association of REALTORS® (C.A.R.) Dispute Resolution Center Supervisor and has been working with the Center since 2019. The Center offers a panel of expert mediators who are specially trained on C.A.R.’s real estate contracts and have significant experience mediating real estate disputes. Prior to acceptance on our panel, mediators are vetted to ensure they possess the training and qualifications necessary to successfully mediate real estate transaction disputes. Although most matters settle in mediation, we offer an Arbitration Referral Panel with highly qualified arbitrators. The streamlined arbitration program provides parties with a cost-effective arbitration without sacrificing quality. Learn more at https://www.car.org/disputeresolution.