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You are here: Experts > Business > Corporate Law > Arbitration/Mediation > Housing Mediation
Expert: Timmy Chou - 8/13/2008
Question
Currently, I am in mediation regarding a housing dispute. Approximately, 8 years ago I bought a house with the mother of my daughter. We refinanced in 2001 and as of 4/05, she has left the premises. She is on the deed but has not made any payments toward the mortgage or upkeep of the home. She issued a petition to claim 50% of the value of the house which I responded to claiming she was only entitled to 17% at the most. We met with a mediator in 2006 and have not been able to resolve the conflict. She has a lawyer and I don't although I have sought legal guidance in the past. Recently, a date was set to meet with the mediator. Neither party could make it, so I was asked to contact the lawyer for an alternate date. When I contacted the lawyer, we could not come up with an alternate date, so he asked me if I cared to make him an offer. I indicated to him that I was still at my last offer to which he replied it was not enough. At this point, he threatened me by saying the mediator will auction of the house. My response was that is not necessarily true. He then told me to get a lawyer because he didn't want to speak to me anymore. The last lawyer I spoke to prior to our initial conference with the mediator explained to me that I had done everything that she would had done for me and all that was left now was to prove my case. I contacted the mediator after the call and relayed the events and am currently awaiting a response as to the next steps.
My question to you is what is the likelihood of the mediator ordering an auction of the property? Whatever she decides can't I just refinance to get my ex's name off the deed and keep the home? I believe he is trying to bully me because I don't have legal representation. Also, do I have a case for abandonment and breach of contract, since she left in 2005 and has not contributed to the home since then?
Answer
Thank you for your question!
As I always mention to questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement. The case you describe here is unfortunately very typical. I am not a lawyer, nor can I mediate your dispute with just you alone but I can respond to your question from my business consulting and mediation experience. Note that this issue may develop legal implications and you may wish to continue to consult an attorney.
Mediation is designed as a voluntary process where parties can try to resolve their disputes. Often a court will order mediation, though most of the time this is not binding and the parties are always free to litigate if they want later. I have never seen an instance where a mediator has authority to order any disposition of assets or force a sale. This is sometimes the result in a contractual arbitration, where two parties agree to arbitration and then the decision of the arbiter can become a stipulated judgment, but not is traditional mediation. Whoever is saying this is blowing smoke.
There is, however, considerable posturing, threats, inducements and other gambits along the way designed to improve a negotiating position on one side or the other as the matter moves along. Both sides are trying to detect what the other side's boundaries are and where they might settle out. This false threat may be one of these strategies, and it is likely a bullying tactic.
I would be advising the other party that since they have not, and are not, continuing to contribute to the assets upkeep and maintenance, every day they wait to settle erodes their position. How can they not participate in the expenses of the property for years and then still expect that their piece should be 50%?
You may wish to consider this fact as you move along, and perhaps you are advantaged if the matter continues unresolved and you continue to pay for 100% of the costs of the property.
In any case, the other party is not compelled to release their interest in the property, and if the property is held in joint custody, each of you hold a 100% ownership. Merely refinancing will not automatically release the other party's ownership claim, and it will not likely be possible to do at all. Banks are not in the habit of lending on a property and then not sweeping up the maximum repayment leverage possible. All titles owners (over 5%) will be required to guarantee the loan.
As far as a contract breach, unless you have a specific executed contract she has signed where she promises to pay for half the expenses, etc., you will not likely prevail with a breach suit. Banks do not care who pays them as long as someone does, and county clerks do not care how ownership interests are settled by private individuals. If you pay and she does not, no one cares. You are left with the inadequate dispute resolution options at hand if you can't work it out.
Obviously, this is a case that is best mediated and moved past, but it takes some maturity and good faith. There is a good chance that any profit available after paying the mortgage would be spent on lawyers if the matter is litigated. How stupid and sad this would be, but I have seen cases where someone would rather ruin the whole party then see one party get any benefit whatsoever.
These are some ideas. Feel free to follow up with additional questions.
In all my answers, and for your information, the pros and cons of the types of dispute resolution are provided below.
GOOD LUCK!
Arbitration, Mediation, and Litigation
Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system
Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships
Negatives of Arbitration
It's a compromise, no %100 winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process
Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.
Benefits of Mediation:
Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions
Negatives of Mediation
may not reach a binding decision
unskilled mediator
Litigation: using the judicial system to resolve disputes
Benefits of litigation:
a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final
Negatives of Litigation:
waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record
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