“I’m going to sue you!” ………”You’re not allowed, na na, ne, na na”

 The standard clause compels disputes to be handled by the local association of realtors thus limiting the program of choice. The value of the mediation can be compromised by the skill of the mediators available in a particular program. Sometimes it’s a good idea to choose a mediator who is skilled but not part of the local multi-list, and therefore, less likely of knowing and being partial to one company or agent involved. This clause also limits the ability of parties to engage in “discovery” prior to mediation, for example, if a party wants to obtain a certain type of inspection to be used at the mediation.

Mediation can be a good thing but it is intended to be a voluntary proceeding. It’s the only proceeding in which the parties control the outcome. However, the current clause provides for penalties if a party “acts in bad faith”. Question, is the failure to agree to compromise and rather “stand your ground”, bad faith? If you do, the clause could subject you to attorney fees and sanctions. Those are pretty big hammers for what is supposed to be voluntary. We think is unreasonable for a party who wants to turn to the courts to pursue some or all of their rights to be subject to those penalties.

Remember, parties can always agree to mediate and they don’t have to use the clause in the agreement. I would strike the clause, if the negotiation permits, and offer to consider mediation in the event of a dispute.