Full Disclosure

Inside the Arizona New Home Industry

How to Help Your Client with a Disclosure Issue
Written by Columnist:
Samuel Doncaster

 

Most buyers facing disclosure issues turn to their own agent first. One of the most common questions I get from agents is how to help clients who are asking those types of questions. The most important thing you can do for that client is properly and promptly get them into mediation.

Everyone in the industry knows that the standard Arizona Association of Realtors® contract includes a dispute resolution provision that requires mediation. And most mediations are successful. Many mediators I speak with report that well over 90% of mediations result in settlement. And my own experience shows that even cases that don’t settle in mediation often settle soon after. So, the buyer will always benefit from conducting mediation.

One of the most common follow up questions to that is how to get a mediation started. That’s one of the most commonly misunderstood parts of the process. The Arizona Association of Realtors® has a rule governing initiation of mediation in the Arizona Association of Realtors® Dispute Resolution Packet. Under the rule, you need to complete a form (also available in the packet) and send it to the mediator and the other side. 

However, skipping this step can have serious consequences. In one case I know of, the buyers sent multiple letters requesting mediation, and got nothing but silence from the defendant sellers for months. They then sued, arguing that the silence was a refusal to mediate, or a waiver of the mediation provision. 

They lost that case. The Court ruled that a failure to properly complete the Arizona Association of Realtors® promulgated form was a failure to adequately invoke the mediation provision. Because the buyer never properly invoked the mediation provision, the seller had done nothing wrong when it disregarded the buyer’s correspondence. And the case had to be dismissed. The Court even awarded attorneys’ fees. 

Buyers jeopardize their rights when they fail to timely and properly invoke the mediation provisions. However, completing the form and getting it done right is one of the best things you can do for your clients. 

 

Samuel Doncaster is the Owner and Founder of Fraud Fighters Law Firm. He also recently released the Arizona Guide to Real Estate Fraud. This comprehensive guide covers 7 often overlooked strategies for proving the Seller had culpable knowledge. It also includes a detailed checklist that buyers should go over to ensure they ask for everything they deserve. Scan the QR code to get a complimentary copy!