Surveying Settlement — Mapping Mediation Strategies for Real Estate Disputes (January, 2018)
(An edited version of this article originally appeared in The Lawyer’s Daily.)
This is the second of a three-part series in which I share practical mediation advice, in different areas, based on my work as a mediator and mediation lawyer (or, Settlement Counsel). Previously, I discussed wrongful dismissal cases. In this segment, I survey strategies for maximizing settlement opportunities through mediating neighbour disputes, claims arising out of purchase and sale agreements, and mortgage enforcement.
Not to be mistaken with the catchphrase “Hello, Newman” (although Newman was Jerry’s nemesis neighbour on Seinfeld), the above-noted heading also does not refer to the creepy video game of the same name about sneaking into your neighbour’s house. That said, neighbour disputes may feel like horror movies to combatants (and Jerry once referred to Newman as “pure evil”). The title actually refers to neighbours engaging one another in a peaceful and effective manner through mediation to ease tensions and settle issues.
Most neighbour disputes I handle as a lawyer and mediator relate to boundaries, removal of trees, fences and other structures, and “nuisances” like pets, noise and floods. I am convinced there is no better place to resolve these types of disputes than mediation from a time, cost, and client satisfaction perspective.
Consider this: Neither side is usually prepared to move away as a means of resolution. They must co-exist regardless of the outcome of any litigation. It’s far better for neighbours to meet, with a mediator’s assistance and their own counsel, to help solve existing problems and address future ones. When engaging in the mediation of neighbour disputes, my recommendations are:
- Earlier the better,
- Hire counsel* who are committed to the mediation and settlement process,
- Set aside a whole day for mediation — expecting that additional days may be required (this is as close to family law as civil law gets),
- Bring all surveys, photos and correspondence, and
- Expectations should be kept low. No one joins hands and sings kumbaya. A cold and functional peace is victory
Making Sour Deals a Little Sweeter
Home purchase disputes (including damage and defects, misrepresentations or interpretation issues) – whether pre or post-closing – can leave a bad taste. Yet, they are ripe for mediated settlements. Timing can be problematic though because:
- There is often little time between when a pre-closing dispute arises and the closing date. Even if real estate lawyers, or litigators, are proponents of mediation, it’s challenging to find an available date, especially if closing cannot be extended.
- With post-closing disputes, whether mediation is voluntary or mandatory, the number of parties and interests whose voices must be heard at mediation can quickly expand. There may be insurers, mortgage lenders, parties on the same side that may have separate interests and counsel, and estates of deceased persons may be involved. A settlement likely requires the participation of all interested parties, leading to delays and longer mediations (while deposits or holdbacks may be tied up).
Here are some suggestions to make sour deals a little sweeter:
- In Ontario, agreements of purchase and sale do not include mediation clauses (at least I have never seen one) to deal efficiently with pre-litigation disputes. Nevertheless, counsel in Ontario can draw upon the Commercial Mediation Act, 2010 (and similar legislation in other provinces). To deal with the time crunch, local ADR organizations or private firms can supply rosters of experienced real estate mediators who are available on short notice. Education within the real estate bar, and among real estate agents, on the benefits of early mediation is also valuable.
- For post-litigation mediation, whether or not it is mandatory, promptly contacting fellow counsel about scheduling a mediation date early in the proceeding (even prior to the close of pleadings – or at the discovery stage), when all identified and interested parties can attend, will help avoid a case with high settlement potential from lingering for years.
Mortgaging Yourself to Mediation
One definition of mortgage (as a verb) is to “commit”. For mortgage enforcement cases, in recent years, I have “mortgaged” myself to attempting to mediate (even if mediation is not mandatory, the opposing side is unrepresented, and the case can potentially come before before a judge on a summary basis). By proposing mediation to the other side prior to commencing a lawsuit, or before a motion for summary judgment, there is an opportunity for time and costs savings — including avoiding adjournments, appeals and execution issues. As well, a solution may be reached that is better for both lender and borrower.
Think mediation has no place here? Consider the Farm Debt Mediation Act, decades-old federal legislation permitting defaulting farmers to seek a stay of mortgage enforcement proceedings and mediation. The Feds were onto something, and there is no reason why the Bar* cannot fill in legislative gaps by promoting mediation within non-farm cases.
Based on the above, there are three takeaways:
1. Think outside the usual map borders (or box),
2. Begin your mediation journey early, and
3. Prepare for and avoid delays.
Up next: Mediation of Personal Injury Claims.
About the author: Mitchell Rose is a lawyer, mediator and settlement counsel with Stancer, Gossin, Rose LLP / ADR@SGR in Toronto.
(*When referring to “counsel” or “the Bar” in the above-noted article, I include my paralegal colleagues who deal with disputes within the jurisdiction of Ontario’s Small Claims Court. Note, however, that the Small Claims Court’s jurisdiction is, currently, limited to damages claims of $25,000.00 or less, not including interest and costs. The Small Claims Court cannot make binding declarations of right (such as who owns land, or a particular part of it), nor can it order injunctive relief (forcing persons to take or not take certain actions – like moving fences or structures, or staying off property).
For the first part of this series, on mediating Wrongful Dismissal disputes, please click here.
THIS NEWSLETTER IS FOR EDUCATIONAL PURPOSES AND IS NOT INTENDED AS LEGAL ADVICE.