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Alternative Dispute Resolution Clauses for Leases and Real Estate Contracts
Many lawyers and real estate professionals tend to discourage ' or even prohibit ' the inclusion of alternative dispute resolution (ADR) clauses for their lease agreements and various other real estate contracts. Sometimes this reaction is instinctive without any real thoughtful evaluation of whether and under what circumstances an ADR clause should be added to any agreement. This article briefly explores a few instances where an ADR clause should be strongly considered. Before doing so, the two most common forms of ADR are discussed. (Although this article is primarily based upon Florida law, the legal principals discussed are likely common and applicable to most other jurisdictions in the U.S. Before deciding whether to include an ADR clause in any lease or real estate contract, however, the parties should consult with competent legal counsel licensed to practice law in the applicable jurisdiction.)
Mediation
Mediation is a process whereby a neutral third person encourages and facilitates the resolution of a dispute between the parties in an informal proceeding in order to reach a voluntary binding agreement. The mediator does not make any rulings or decisions for the parties. The mediator may not give the parties legal advice, but the mediator may discuss the possible outcomes of the dispute if not settled, as well as the strengths and weaknesses of the parties' positions.
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