Relationships are important in real estate. Whether it is a landlord and tenant, a developer and builder or a buyer and seller, having a strong relationship based on trust and respect usually results in smoother transactions.
Disputes sometimes occur even in the best of professional relationships. When you are facing a real estate dispute in California, you may consider using alternative dispute resolution (ADR) to attempt resolution before heading straight into litigation.
Arbitration and mediation
Arbitration and mediation are common forms of dispute resolution. While there are some differences between the two, both are often quicker and more efficient than litigation.
Mediation generally involves a meeting, or series of meetings, with a mediator. Both sides present their positions and the mediator acts as a neutral third-party who does not take sides but attempts to help both parties achieve a resolution.
Arbitration is typically more formal than mediation but less formal than a court hearing. An arbitrator has the power to decide the issue themselves if an agreement is not reached, while a mediator does not.
Both sides can present evidence, such as witnesses and documents, at arbitration and the process is more like a court hearing than an informal meeting.
Both could be a good option if you are hoping to preserve your relationship. In addition to being lengthy and expensive, court battles often cause a breakdown in professional relationships.
Even if you “win” in court, you might lose overall if the situation results in a termination of a business relationship. A landlord might refuse to renew a lease or a real estate sale may not go through.
Real estate depends on relationships
Since one of the main benefits of using ADR to resolve a dispute is relationship preservation, it is usually worth trying when a real estate dispute occurs.
If you choose ADR to try to resolve a dispute, it is important to choose the right method and thoroughly prepare.