- AUSTIN ASSOCIATION OF MEDIATORS
Real Estate
Mediation in Real Estate Disputes
The use of mediation to resolve real estate disputes continues to grow. Within the real estate industry, real estate associations offering mediation skills as a continuing education course are helping to raise an awareness of the value of mediation to realtors. Some real estate agents have added to their contracts a provision for the use of mediation to resolve disputes between realtors and their clients. At the state level, the recent formation of the Texas Residential Construction Commission was created to help consumers and residential homebuilders resolve their differences out of court. Among the Commission’s legislative mandates is to provide a dispute resolution process. The process entails the use of a neutral third-party inspector assigned by the Commission to assess whether a home is in compliance with building and warranty standards.
Should the use of mediation become standard practice in the real estate industry, mediators may find this industry a new market for business.
Real Estate Dispute Examples:
Parties in real estate disputes may include buyers, sellers, real estate agents, appraisers, inspectors, contractors/subcontractors, builders, title companies and other individuals or businesses involved in the transaction. Following are some examples of real estate disputes:
1. A buyer withdraws an offer to buy a home and demands the seller return his/her down payment. The seller refuses to return the down payment, which has been placed into an escrow account, claiming the buyer violated “a good faith” agreement. The title company holding the escrow account will not release the down payment without a signed affidavit by the seller.
2. A real estate agent claims that a seller has made incomplete statements on the inspection form about the history and extent of damages to the home he/she listed for sale. The real estate agent, who stands to have a grievance filed against him as well as lose his relationship with the licensed broker representing him, is seeking damages from the seller. The seller claims the statements were accurate at the time the inspection form was filed and that the repairs remain under warranty and are not as extensive as claimed by the agent or the buyer.
3. A married couple has filed a formal grievance against a contractor, who is also a friend, for the poor construction of their home. The couple claims the contractor guaranteed that he would personally oversee the construction of the home but instead hired a subcontractor. The married couple wants the contractor to take full responsibility for the cost and oversight of the construction work that needs to be redone. The contractor believes the subcontractor holds the responsibility for the costs.
AAM was incorporated in 1981 as the Austin Family Mediation Association. In recognition of the growing diversity in the field of mediation, in 1992 AFMA decided to expand its scope and became the Austin Association of Mediators.