Are Real Estate Disputes in California Commonly Mediated?
Direct Answer
Yes. California real estate disputes are commonly mediated, especially because the standard CAR Residential Purchase Agreement includes a mediation clause.
Yes. The California Association of Realtors (CAR) Residential Purchase Agreement (RPA) — the most widely used residential real estate contract in California — contains a mandatory mediation clause in paragraph 31A. This clause requires the parties to mediate any dispute arising from or related to the agreement before filing a lawsuit or initiating arbitration. Failure to mediate before filing suit can result in the loss of the right to recover attorney's fees, which are otherwise available to the prevailing party under the contract. The mediation must be conducted through a mutually agreed mediator or, if the parties cannot agree, through the CAR's dispute resolution program or a recognized ADR provider. Common real estate disputes mediated in California include seller disclosure failures (non-disclosure of material defects under Civil Code §1102 et seq.), boundary and easement disputes, commission disagreements between brokers, construction defect claims, and HOA covenant enforcement. Commercial real estate disputes are typically handled through private mediation, with JAMS and AAA as the most common providers. California's complex disclosure requirements, environmental regulations (including Proposition 65 and CEQA), and rent control ordinances in many cities create a distinctive legal landscape for real estate mediation.