Alternative Dispute Resolution
Our firm deals with both real estate transactional issues (helping people buy) and issues that surface when there is a dispute between what one of the parties expects, and the resulting reality of the situation (disclosure issues).
The professionals you surround yourself with: the realtor, the mortgage company, the insurance company etc are each important, yet undoubtedly carry a biased interest in “closing the deal.” These partisan individuals are paid on commission, potentially coloring their judgment. Both parties in any transaction naturally want to close on terms favorable to themselves. However, an attorney’s fee is generally not based on either party’s results. Thus, the presence of counsel without a vested interest is highly beneficial. Our attorneys provide the useful legal, financial, and personal perspective to offer a fresh opinion on a transaction. We want to provide a completely competent party with a legal acumen–one not vested in merely closing on your side.
There are two types of ADR (alternative dispute resolution), which tend to confuse people: mediation and arbitration. Mediation, a negotiation process involving a neutral third party, assess whether a settlement can be reached through direct talks and is almost always a preliminary step toward litigation. Arbitration is essentially a court proceeding undertaken by private parties, i.e. there is no direct discussion, statements and evidence are presented and both parties agree to be bound by the designated arbitrator’s decision. Mediation is almost mandatory for residential real estate transactional issues (depending on the forms of purchase) and is usually part and parcel to a lawsuit. It can happen at any stage of the litigation process: before filing litigation, during litigation, or even leading up to a trial. About 90-95% of cases are going to settle. Understanding these methods and how they apply to your circumstances is crucial.
We find that the transactional side is simple when hiring a lawyer, because we can help identify the upfront cost of a deal. We factor in how much assistance is necessary and estimate the anticipated transaction cost, or the cost of doing business. We try to aim for 25 thousand USD at issue before consideration. When hiring a lawyer for transactional procedures, one does not have to worry much about price as it is generally well defined in advance.
Litigation, however, is amorphous. Disputes over less than 25 thousand dollars generally are not worth attorney fees. Unfortunately, it’s not recommended to enter small claims court for a dispute over more than 10 thousand. This makes disputes from 10 to 25 thousand difficult to resolve without outside help and thus an ideal situation to employ ADR. We recommend small claims forms (accessible to most people) instead of an attorney when you are in a dispute with less than 10 thousand USD at stake. Small claims court allows you to place your dispute before a third party and results in a quick, objectively enforced judgment on your issue.
There are two major issues to watch out for before moving forward with any of the aforementioned options: title and disclosure. More often than not, title issues result in partition action, or a mandate dividing property into individual shares between disputants. Disclosure issues involve one party failing to communicate or actively concealing relevant information from the other and can result in serious legal ramifications.