Legal issues

Mediation Basics

A slow real estate market is fertile ground for contract disputes, and CCIMs are not immune. While arbitration can be useful in solving disputes, it is often inefficient and -- in this market -- prohibitively expensive. "With arbitration, sometimes relationships are damaged," says Gerrie F. Watson, CCIM, GRI, of Myrtle Beach Commercial Real Estate in Myrtle Beach, S.C. "In this business, we can't afford to burn any bridges."

Recognizing a need for an alternative conflict resolution mechanism among designees, Watson and Daryl A. Crotts, CCIM, CPM, of Crotts Commercial Real Estate in Wichita, Kan., attended a National Association of Realtors’ mediation training seminar in December 2008. As chair and vice chair of the CCIM Institute’s Professional Standards Committee respectively, Watson and Crotts are now available to mediate disputes for designees.


Why Mediation?
Mediation sidesteps many of the bureaucratic stumbling blocks that plague the arbitration process. Here are some of the key advantages of mediation:

• The process is voluntary. The parties can enter and leave the process at will.
• The parties have control. Impartial, formally trained mediators who are familiar with the intricacies of real estate contracts facilitate the process but do not interfere with the resolution’s substance.
• Mediation is confidential. Information gathered during the mediation process is not admissible as evidence in arbitration nor can mediators be subpoenaed or called as witnesses in arbitration.
• Mediation involves little or no cost and can be scheduled within 30 days.

Mediation in Action
To initiate mediation, CCIMs and other real estate professionals can contact their local Association of Realtors. Then the following steps are taken:
• Parties receive a letter that explains logistics and protocol for their conference.
• Both parties consent to a selected mediator.
• During the conference, parties share perspectives, identify the issues at hand, create an agenda, and –- with the mediator’s help –- build a workable solution.
• If no agreement can be reached, parties are free to pursue arbitration.

Source: National Association of Realtors

Rich Rosfelder

Rich Rosfelder is vice president of strategic communications for CCIM Institute.

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