Real Estate Mediations and Compliance with the Residential Purchase Agreement Mediation Requirement

Join Real Estate Attorney, Real Estate Mediator and Real Estate Broker, Devin Lucas, discuss Real Estate Mediations and Compliance with the requirement for pre-litigation mediation under the California Association of REALTORS® Residential Purchase Agreement ("RPA").

This is a LOT of information, normally an hour-long in-person presentation (even then, too short) into under 18 minutes.....

We discuss 
1) What is Mediation
2) Requirement for Mediation
3) Who attends the Mediation
4) Is an attorney required for Mediation
5) Where to find a Mediator
6) Costs for Mediation
7) How to comply with the requirement for Mediation
8) What if the other party does not respond or is being difficult in selection of a Mediator or scheduling?
9) Attending the Mediation / process

Visit our website for additional information on Real Estate Mediations

https://lucas-real-estate.com/mediation

Lucas Real Estate, A Professional Corporation
Real Estate Law | Real Estate Transactions | REALTORS®
2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023 
O. 949.478.1623
info@lucas-real-estate.com
lucas-real-estate.com

Transcript

0:00

Devin Lucas here to talk to you about

0:01

real estate mediations and compliance

0:04

with the California Association of

0:06

Realtors residential purchase agreement

0:08

we're gonna try to break down a lot of

0:10

information in a very short video

0:12

including what is a mediation what is

0:16

the requirement for mediation who should

0:18

attend the mediation should you get an

0:21

attorney where to find a mediator and

0:23

what are the cost attending the

0:25

mediation how does it work how to comply

0:28

with that requirement in the purchase

0:30

agreement and one of my favorites what

0:32

happens if the other party does not

0:33

comply or is being overly difficult

0:35

let's get into it

0:38

mediation what is it a mediation by

What is Mediation

0:41

definition is a meeting with a neutral

0:44

third party to help facilitate a dispute

0:47

resolution let's break down what that

0:49

means it is voluntary in that the

0:53

sentence cannot be parties cannot be

0:55

forced into mediation however within

0:57

your contract specifically the

0:59

California Association of Realtors

1:01

purchase agreement and many other modern

1:04

contracts it requires you to mediate

1:07

first before you can file a lawsuit how

1:11

does it do that

1:12

well it punishes you essentially if you

1:15

jump the gun and just immediately file a

1:18

lawsuit what do I mean by punished

1:20

within all of these contracts there's

1:22

typically a prevailing party attorneys

1:24

fees what that generally means is that

1:26

if you have to spend a hundred thousand

1:28

dollars in a lawsuit to prove that you

1:30

are right and you win in theory the

1:34

court is also now going to award you

1:37

that hundred thousand dollars in

1:38

attorneys fees on top of whatever your

1:40

other award would have been it's a very

1:43

powerful tool becomes both a sword and a

1:46

shield and in my opinion people dig

1:48

themselves in the hole wanting to get

1:50

those fees but that's a separate issue

1:52

bottom line if you don't go to mediation

1:55

first if you jump the gun and just file

1:58

a lawsuit then you're in trouble

2:00

and you're never gonna get those

2:01

attorneys fees even if you win let me

2:05

repeat that let's say you spend a

2:07

hundred thousand dollars to win a case

2:09

and you win you'll win whatever you're

2:12

gonna win

2:13

but that hundred thousand dollars that

2:15

you just spent you are never gonna get

2:17

that back because you failed to mediate

2:19

a case is a very expensive mistake

2:22

attorneys get themselves into trouble by

2:25

just filing lawsuits without reading the

2:27

contracts parties certainly get

2:28

themselves into trouble for that exact

2:30

same reason so of course read your

2:33

contract if it has a requirement for

2:35

mediation

2:36

you should come fly who is the mediator

Who is the mediator

2:42

well the mediator can be anyone really

2:44

there's no special license or

2:45

requirement for it typically you're

2:47

gonna want some sort of expert in their

2:49

field an attorney with a background in

2:52

the real estate matter if it's a real

2:54

estate dispute that's what I do but you

2:57

know cases gonna be about anything so

2:59

you're gonna typically want someone with

3:01

experience it doesn't have to be an

3:03

attorney it doesn't have to be a retired

3:04

judge but those are the most common

3:06

people that are used in mediations where

3:10

do you find a mediator you can find them

3:12

anywhere Google it when it comes to real

3:15

estate and with the California

3:16

Association of Realtors has a specific

3:19

mediation center for consumers it has a

3:21

list a panel if you will of mediators

3:24

I'm on that particular list as are many

3:26

other great mediators and you can choose

3:28

we've all agreed to essentially do it

3:30

for free not really there is a cost

3:33

involved but it is a dramatic reduction

3:35

from what a lot of those parties would

3:37

normally charge as far as their hourly

3:40

rates and whatnot and especially if you

3:42

try to go to some of the bigger

3:43

companies and they're great they can be

3:45

great at resolving very big disputes but

3:48

if you've got a ten thousand or even

3:49

$100,000 dispute you probably don't want

3:52

to go spend $20,000 on a mediation you

3:55

probably want to look for something

3:56

that's more along the lines of $1,000

3:58

each party split it so you're looking at

4:00

a few hundred dollars per party so it's

4:03

very easy google it or check with the

4:05

California Association of Realtors they

4:07

will help you get in touch who should

4:10

attend the mediation well you're gonna

4:12

have to look at your contract this gets

4:15

a little tricky in a typical buyer and

4:17

seller dispute people often want to

4:19

bring in other people as well such as

4:21

brokers brokerages hokage's maybe there

4:26

was a

4:27

a flipper involved so maybe they had a

4:29

contractor maybe people are mad their

4:31

home inspector didn't find out about

4:32

something you know whatever it is

4:34

unfortunately you're gonna have to look

4:36

at your contracts typically when there's

4:38

a buyer and a seller dispute they have a

4:40

purchase agreement amongst themselves

4:42

but other people such as contractors

4:45

Realtors brokers other that might be

4:47

involved they might not have a

4:49

contractual relationship with whoever is

4:52

bringing the actual lawsuit on drawing

4:55

these invisible lines in law school we

4:57

learn it it's called whether you're in

4:58

privity of contract with someone and I

5:00

don't have a whiteboard here but when I

5:02

do this presentation I show a fancy

5:04

little connection you have to have a

5:05

contractual obligation with someone to

5:09

go to mediation that that's the

5:10

requirement right because otherwise you

5:12

lose their attorneys fees or whatever

5:13

the contract is if you don't have a

5:15

contract with someone they don't have to

5:18

attend mediation they can tell you to

5:19

take a hike and that unfortunately does

5:22

become a problem in some of these cases

5:24

where you know maybe the buyer and the

5:26

seller agree because they have that

5:28

contractual obligation but there might

5:30

be many other parties that they're

5:32

looking to in the potential lawsuit and

5:34

and you're not able to get them into the

5:37

mediation so I don't have a magical

5:39

answer for you there all I can tell you

5:42

is that when you look at the purchase

5:43

agreement the buyer and the seller have

5:45

to mediate so don't make the mistake of

5:48

saying well I'm not gonna mediate unless

5:50

everyone else mediates because that's

5:51

just gonna get you in trouble you still

5:53

have to do it so look at the contracts

5:56

that said even if they don't have to

5:59

sometimes other people do show up

6:00

sometimes the brokerages will show up or

6:03

things like that I have a real big copy

6:06

up there you got to be careful

6:07

especially two agents and this might be

6:09

a message to you agents out there you

6:12

might think you're doing yourself or

6:15

your client a service by helping them

6:17

out with the process maybe even

6:19

attending the mediation process but

6:21

you're really causing a lot of problems

6:23

first of all you're probably practicing

6:24

law without a license and you shouldn't

6:26

be doing that your client probably needs

6:28

an attorney not you or at least to talk

6:31

to one second of all you is the agent of

6:33

the brokerage might might be a target so

6:35

if someone is suing over a fraud or a

6:37

non-disclosure issue

6:39

the reality is there

6:40

they're probably gonna sue agents as

6:42

well so while it's all well and good

6:44

that agents want to show up and help

6:46

guide their clients or be a helping hand

6:50

this is a legal process and it can be

6:54

very problematic if you don't really

6:56

understand the the role that you might

6:59

be in so agents take note you know maybe

7:02

certainly talk to your brokers about it

7:05

before you show up at a mediation

7:06

I have literally had realtors walk out

7:08

of mediations because they call their

7:10

broker the broker says what the heck are

7:12

you doing there leave and they leave and

7:15

vice versa I've had people that say oh I

7:17

wish I could have attended the mediation

7:18

but they didn't know about it so you

7:20

know you really got to try to get

7:21

everyone involved but ultimately the

7:23

only people you can force to go are the

7:25

ones that have that contract is an

7:27

attorney required for the mediation

7:29

that's up to you you know to be

7:31

perfectly honest attorneys or big pros

7:33

and cons obviously if you have a huge

7:36

dispute if you've been wronged you may

7:38

eventually need an attorney at the other

7:42

end of that spectrum to be honest

7:44

attorneys cost money and once everyone

7:46

starts hiring an attorney and starts

7:48

spending money on attorneys that you

7:51

know further ingrains

7:52

people sometimes into the position so

7:54

you know whether or not you need an

7:56

attorney is a obviously a difficult

7:58

decision that everyone's gonna have to

7:59

make certainly some people don't even

8:01

have that option because there's a cost

8:03

involved there so you know you're gonna

8:05

have to find out if that's right for you

8:08

certainly might want to talk to an

8:10

attorney

8:10

some some attorneys do consultations

8:12

maybe you have to pay for that but it

8:14

might certainly be a good thing to do

8:15

before just walking in blind to a

8:17

mediation that said honestly though some

8:20

of the the cases that settle most

8:22

frequently are cases where parties don't

8:25

have attorneys and I think that's

8:26

because they do tend to be smaller

8:28

disputes that that people want to work

8:29

out anyway

8:30

but it is ironic

8:32

you know sometimes that does happen so

8:35

you'll have to decide if you need an

8:37

attorney or not attending the mediation

The mediation process

8:41

so let's talk about this I have another

8:43

video you can watch on the virtual

8:45

mediation process but whether you attend

8:48

in person or virtually it's a very

8:51

similar process now some mediators use a

8:54

collaborative approach where they like

8:56

to put everyone together in the same

8:57

room first and have people talk it out

9:00

some mediators including myself take a

9:03

different approach where they separate

9:04

the parties to begin with and probably

9:07

throughout the whole thing in my

9:08

experience people really don't want to

9:10

see each other they're already mad at

9:12

each other there's already bad blood

9:13

involved so I personally just don't

9:16

think it's appropriate to force the

9:17

parties into the same room together and

9:19

certainly now virtually people are

9:21

already uncomfortable about being on

9:23

camera or being in their living room so

9:25

I'm certainly not gonna you know thrust

9:27

you in front of someone that you don't

9:29

want to be in front of so but either way

9:32

you do it talk to your mediator about

9:34

the approach they take typically there's

9:37

either some sort of beginning session

9:38

where you're all together or the

9:40

mediator simply does two of them so

9:42

they'll usually be some sort of

9:43

introduction how are you doing go over

9:45

the process talk about the person's

9:47

credentials talk about the agenda of the

9:50

day you know they'll logistically show

9:52

you where the restrooms are or if you're

9:53

doing a virtual one maybe there's some

9:55

some technical things to go over first

9:57

but you know you basically get situated

9:59

and then eventually you'll start talking

10:01

about the case you'll start talking

10:02

about the dispute what you feel the

10:04

other side did wrong or what you feel

10:06

you didn't do wrong you know whatever it

10:09

is there's definitely a lot of emotion

10:11

involved in some of these cases so

10:12

people are going to want to air out

10:13

their grievances and then at some point

10:15

in time you're going to start talking

10:17

about settlement usually that is money

10:19

but not always sometimes a specific

10:22

performance case for example where

10:23

people are suing over the actual right

10:25

to buy the property you know then

10:28

sometimes the settlement is potentially

10:30

actually going forward with the sale but

10:32

most often it does come down to money

10:34

and typically whoever brought the case

10:36

initially is the person that's going to

10:38

make a demand so they're gonna ask for

10:40

hey I want you know a hundred thousand

10:42

dollars or ten thousand dollars or

10:43

whatever it is they're gonna make that

10:44

ass

10:45

and then typically the other side is

10:47

going to potentially counter that

10:49

sometimes they don't sometimes literally

10:51

people are not in a position to settle

10:54

or they come for the wrong reasons and

10:57

there is no dialogue to be had but more

11:00

often than not you'll usually start

11:01

engaging in a dialogue about the

11:03

settlement and eventually hopefully come

11:05

together and make a deal now there's

11:07

plenty of books there's lots of videos

11:09

you know there's hour-long content

11:11

there's presentations that I do on the

11:13

on the topic of you know how does that

11:15

actually happen way too advanced for

11:17

this video but you know just two basic

11:20

things to keep in mind some mediators

11:22

use a facilitative method where they're

11:24

really just facilitating a dialogue you

11:26

know what can I do for you what would

11:29

you like to do how do you think that

11:31

makes the other person feel what would

11:33

you like to see as a resolution you know

11:35

more of a facilitating and then some

11:37

mediators use an evaluative approach

11:39

which is typically found with a lot of

11:41

retired judges and stuff like that where

11:43

you want their opinion so the judge is

11:45

gonna say oh you know I've seen this and

11:48

and keep in mind they're probably gonna

11:49

you know try to try to argue with both

11:53

sides but they're gonna go to each side

11:54

say you know I've seen this and you know

11:56

these cases rarely win and you you know

11:59

you could lose and you have problems

12:00

with X Y & Z or or you know they're

12:02

gonna tell you how great your cases or

12:04

something you know bottom line is that

12:05

some mediators are gonna be more

12:07

comfortable than others about actually

12:08

giving you sort of a legal opinion or a

12:11

thought on how that might actually pan

12:14

out in court a lot of mediators are just

12:17

gonna try to facilitate they don't

12:19

really want to give an opinion I

12:20

personally do a little bit of both and

12:22

it certainly depends on the case it

12:24

depends on the parties it depends on

12:25

what they want to hear from me but given

12:28

that I have done it I've been in trial

12:30

have been an appeals you know I find

12:32

that that usually that's why people are

12:34

coming to me they want my experience and

12:36

so I do think it's appropriate to share

12:38

that a little bit I've had a few cases

12:41

to be honest where you know it's very

12:43

clear what's going on and you know I

12:45

usually will you know

12:47

kind of tell people my thoughts and

12:49

opinions on the case so so that's that's

12:52

what I do and that's typically how it

12:54

goes so that's that's really it that's

12:57

kind of my short video on what to do as

12:59

far as the the mediation oh what if the

What if the other side doesnt agree

13:02

other side doesn't agree and how do you

13:03

schedule we completely skipped over that

13:06

this is in and of itself is a whole

13:08

separate topic but look at it this way

13:10

and and I have a sample letter in my

13:13

blog that I've done on it

13:14

attorneys certainly have letters you can

13:16

get a sample letter from your realtor

13:17

that there is one in the software there

13:19

you have to basically send the other

13:20

side a demand for mediation

13:22

you know demand it say hey I want to

13:25

attend mediation here's a list of

13:27

agreeable mediators that we would use

13:29

and we want to attend mediation sometime

13:32

next week or next month something like

13:33

that you've got to be reasonable you got

13:35

to give them a couple weeks to respond

13:36

now if the other side doesn't respond

13:39

you really kind of need to try I

13:42

certainly don't think it's good enough

13:44

just to send a letter and if they don't

13:46

respond three days later file a lawsuit

13:48

that's clearly not the spirit of what

13:51

this process is about so if I was you

13:54

and I didn't hear from the other side I

13:55

would make sure to have multiple letters

13:58

in my file before filing a lawsuit I'd

14:01

certainly try to maybe send one or more

14:03

certified something like that ultimately

14:05

at the end of the day you could have

14:06

someone personally served with a letter

14:07

you could hire private investigators to

14:10

find where people live you know there

14:13

there's some due diligence that you can

14:15

and frankly should do before filing the

14:16

lawsuit on the other hand what I think

14:19

is much more common and frequent is

14:21

where people are being difficult they

14:22

write back and they say oh yeah let's do

14:24

mediation but I'm busy for the next

14:27

three months or you know my clients out

14:29

of the country or because of Kovan 19:00

14:31

I'll do in-person mediation so we're

14:34

gonna have to wait six months you know

14:36

these are more of the gray areas and

14:39

sort of the common sense issues that are

14:40

gonna dictate you know right now with

14:42

Cova 19 that's that's a whole different

14:44

issue I have a video on virtual

14:46

mediations I personally think people are

14:48

gonna need to do that courts have

14:50

already come out with some guidance

14:51

saying you need to move forward with

14:53

video depositions and things like that

14:55

so I think when it you know ultimately

14:57

hits the fan I don't think the courts

14:59

are going to look too

15:00

people that are delaying the process

15:02

because of kovat 19 so I think the court

15:04

is gonna want you to move forward even

15:07

if that means a virtual mediation so I

15:09

think you should definitely keep that in

15:11

mind and you know you've got to try to

15:14

work it out sometimes if they say they

15:15

don't agree on the mediator well you

15:17

have to propose a different mediator or

15:19

go to a company like the California

15:21

Association of Realtors that has a panel

15:23

and they can provide multiple options

15:25

for mediators they can even pick one if

15:27

the parties don't agree so you know

15:29

there's lots of kind of common-sense

15:31

things that you can do to try to get the

15:34

ball rolling but ultimately I I gotta

15:36

say you know sometimes people just delay

15:38

the process or there is just legitimate

15:40

scheduling issues you're just gonna have

15:42

to work it out if it takes a few weeks

15:45

or to be honest even a few months to

15:47

figure out everyone's schedule that

15:49

sometimes is the reality but you'll know

15:52

and judges know to you know keep in mind

15:55

none of this matters unless you

15:56

ultimately go to court and you win and

15:59

then you're trying to collect those

16:00

attorneys fees that's when you bring the

16:01

attorney's fees motion it's after the

16:04

trial is done so ultimately if you

16:07

prevail in the case or or you know for

16:10

whatever reason you're the one bringing

16:12

or arguing an attorney's fees motion

16:13

then you're gonna bring all this stuff

16:15

up you know hey they weren't reasonable

16:17

they delayed the the mediation things

16:19

like that and judges know you know if

16:21

you have 20 emails trying to schedule a

16:23

mediation and the other side just keeps

16:25

blowing you off or comes up with lame

16:27

excuses you know eventually that's gonna

16:29

be before the judge and and judges

16:31

usually are pretty smart about that so

16:33

I'd say common sense kind of rules the

16:35

day as far as you know whether or not

16:36

the other side is difficult and

16:38

certainly if you have an attorney you're

16:39

gonna have to talk to your attorney and

16:41

those of you that are attorneys watching

16:42

this video I would just use a lot of

16:45

caution I've done longer em cles there's

16:47

published and unpublished opinions you

16:49

can look up but you know you you've

16:51

really got to make a reasonable effort

16:53

before you just jump right in now there

16:56

are exceptions read your contract

16:58

there's exceptions for bankruptcy if

16:59

we're filing unless pendens certain

17:01

things like that where you are allowed

17:02

just to file a lawsuit but you certainly

17:05

shouldn't be prosecuting it then you can

17:06

file the lawsuit to file your Liz

17:08

pendants if that's what you need to do

17:09

but you should basically be stopping at

17:12

that point

17:12

and then trying to go forward with the

17:14

mediation process so that's it trying to

17:17

make a quick video please call us if you

17:18

have any other questions we do this a

17:21

lot we love doing this we love trying to

17:23

get people to settle cases that's why I

17:25

quit doing a litigation for the most

17:27

part because I'd rather help people

17:29

resolve the case or do other things on

17:31

the front end so best of luck to you all

17:33

and please let us know if we can help

17:35

reach out anytime thank you

17:44

you