AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Question We are ready to sign the escrow documents this week on a condo purchase in a new development and we have just been informed by escrow that the COE may well be delayed due to a dispute between the sellers resulting in one of the sellers refusing to sigh off. What should I do at this point?
Also we are concerned as our locked-in laon rate will expire on June 26th.
Thank You,
Rudy Betancourt
Answer Thank you for your question!
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 consulting experience. Note that this issue may have legal implications and you should consult an attorney.
Your contract should be explicit that failure to close on the agreed upon date, absent any written amendment from you, would be a breach of the contract. You would therefore be entitled to walk away and get your down payment returned. If you walk away you are still stuck with some of the loan origination fees such as appraisal and inspection fees you have already paid, and yes, if you pass your lock date you will lose the locked rate.
You may have some opportunity to negotiate some concessions at this point from the Seller. In other words, if you can get them to agree to cover your fees or come down in price to offset your loan lock adjustment, you will then provide another period of time to get to closing.
If they do not agree then your only choice is to notify them that they are in breach of the contract and consider it void. You would then have other remedies at law to sue them to recover your damages from the breach, but you cannot force them to do anything to close if they are unwilling to do so.
These are some ideas. Feel free to follow up with additional questions.
For your information, the pros and cons of the types of dispute resolution methods follows.
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
Is confidential, no record
Less costly than litigation
Preserves business and family 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
