Mediating Real Estate Disputes

Is mediating a real estate dispute any different from mediating any other type of dispute? In my experience, the answer is often yes.  There are many examples where a solid framework and background in matters related to surveys, the terms of agreements of purchase and sale, closing obligations, the obligations and duties of real estate agents, the validity of title, the registrability of documents, boundary disputes, the right to use easements, the validity of encroachments, the application of adverse possession and prescriptive rights may expedite and facilitate the resolution of a dispute.

More recently, the right to force a closing or the right not to close has become relevant. Recent stigma cases illustrate new duties of disclosure by owners and real estate agents. A judge may impose duties of good faith and disclosure that in other contractual situations may not be applicable. The concept of caveat emptor may be dead in real estate. A knowledgeable real estate mediator with an evaluative approach can assist clients in coming to the practical resolution of their case.

Similarly, interpreting real estate agreements, joint venture agreements, purchase and sale agreements, lease renewal rights and rates, and boundary disputes, and finding solutions that might work for both clients require a good background in real estate law and in understanding what can be done from a title point of view to solve a problem.

The obligation to close a transaction requires an understanding of not only the technicalities of valid title, and contract and conveyancing requisitions but the duty to act in good faith in the completion of an agreement. A mediator’s understanding of the basics of real estate transactions may facilitate a client’s appreciation of the risks in pursuing a judicial decision.

There are often practical solutions to real estate and leasing disputes that may involve a knowledge of the land registry system and what can and cannot be done in that system. Many judges, general litigators and mediators have little experience with title, with the Land Titles Act and the more recent Teranet land registry regime. Having a mediator who knows the land registry system and title may make sense.

Disputes with real estate agents can be extremely emotional since the client’s perception often is that they are overpaid for what they do. The negotiating process of an agreement of purchase and sale, especially with competing and different bids and conditions can be trying on clients who are not familiar with the process. On occasion they second guess the agent’s advice about pricing, allege bad faith, claiming that they work in their own best interests and not those of the client. Again, a practical experienced mediator with a reasonable assessment of the merits and likelihood of success may inject some reality into their view of the litigation.

Among the many issues mediated:

  • real estate lawyer standard of care and liability
  • access rights under an easement agreement
  • claims to prescriptive easements
  • rights under a lease to retain fixtures
  • construction completion disputes
  • real estate agent entitlement to commission
  • commercial lease default and termination provisions
  • lease renewal rates
  • cost sharing agreement disputes
  • shared facilities use and cost agreements
  • boundary disputes
  • exclusive use common area condominium disputes
  • improvident sale under mortgage
  • determination of rent arrears including common area maintenance costs
  • determination of rentable area under a lease