Mediating Real Estate Foreclosure Actions


Mediation is often the best chance to find a sensible business solution to a mortgage foreclosure that might otherwise lead to time consuming costly litigation. In the context of commercial foreclosure actions, mediation offers a chance to preserve valuable business relationships between developers, investors, and one or more lenders which, in good markets and times, have significant meaning to all. Mediation presents multiple opportunities for litigants. First, it is an opportunity to tell their story to an active and empathetic listener. Because very few cases ever get to trial, mediation is arguably the best opportunity to accomplish this important cathartic goal. Second, it is an opportunity to consider the case from the opponent's perspective. The mediator's neutral role puts him or her in the best position to effect this important result. Third, it is an opportunity to learn facts or nuances about the case that were not available prior to the mediation. Fourth, it is an opportunity to settle the case on terms that the party may better understand and accept as a result of having participated in the mediation process. The word "counselor" is a particularly appropriate description for the role of the attorney in a mediation caucus. For most parties, mediation is a foreign, emotional experience. Attorneys add further intangible value by helping to ease the fear of the unknown for their clients.

Commercial real estate foreclosure cases in particular benefit from early mediation and repeat mediation sessions perhaps more than any other type of case. In this type of case, the sooner mediation can be initiated, the more likely the parties are to achieve a win-won outcome and avoid the costs associated with litigation as well as possible loss in the value of the real estate asset, for example, by expiration of permits, tenant, unit buyer or sub-contractor disputes or physical damage at a project site. In some jurisdictions, early mediation yields a 90% success rate.

Attorneys are urged to prepare their clients for mediation by identifying the true legal and factual issue for them, separating out emotional content, discussing the range of possible solutions, explaining the mediation process itself and preparing client's to settle on less critical elements. For more information on how to prepare your client for a successful mediation, additional things attorneys can do in advance to prepare for mediation, interacting with clients during mediation, and interacting with the mediator during caucus and general session client here.

An effective mediator will assist in preparing mediation participants to succeed. Personal expertise in real estate and mortgage foreclosures, work-outs and transactions as well as the variety of other facets often involved in a commercial real estate foreclosure including, without limitation, knowledge of current real estate liquidity and real estate finance markets, construction, land use, homeowner or condominium association, entitlements and permits, lender and successor developer liability and contract law (from both the developer and lender perspective as well as the various third party perspectives) is crucial to effectively mediating commercial foreclosure cases. Likewise, experience in alternative dispute resolution is a necessary component for success. Finally, the following personality skills have been identified as common traits among successful mediators; (1) excellent interpersonal, perception, listening and communication skills; (2) positive, responsive attitude; (3) Calm, authoritative, professional demeanor; (3) highly intelligent but also creative and flexible in approach.

Shari Olefson is a Florida Supreme Court Certified Circuit Civil Court Mediator. She is certified by the Florida Bar as a real estate law specialist and received a Master of Law degree in Real Property, Land Development and Finance Law from the University of Miami in 1989. Prior to that she was awarded degrees from Carnegie-Mellon University in Psychology and Professional Writing. Olefson has been practicing exclusively real estate related law, including, without limitation, commercial and residential foreclosure, work-outs and transactions, landlord tenant, construction, contract and deposit disputes, mortgage secured loan documents, land use and zoning, homeowner and condominium association, entitlements and permits, lender and successor developer liability and contract law. Her clients have included both large and small developers, banks, investors and private lenders, buyers/borrowers, sellers and related parties. Olefson mediates commercial foreclosure actions (and select residential actions on a case-by-case basis) throughout the State of Florida. Click here for Olefson qualifications.

Relevant Rules Chapter 44 of the Florida Statutes
Outlines laws that govern court-ordered mediation, non-binding arbitration, voluntary binding arbitration and citizen dispute settlement centers in Florida.

Florida Rules of Civil Procedure 1.700 – 1.830
Describes the rules that govern mediation and arbitration in Florida.

Florida Rules for certified and Court-Appointed Mediators Rules 10.100-10.900
Codify the mediator code of conduct in Florida.

The Florida Court System

Circuit Court
Original jurisdiction in all matters exceeding $15,000.00 relating to civil, criminal, juvenile, family, domestic violence or probate as well as appeals from County Court and local government administrative bodies.

County Court
Original jurisdiction in matters under $15,000.00 as well as traffic, small claims and most landlord tenant and criminal misdemeanor cases.

See more information by following this link to the Florida Courts webpage

Olefson Forms For Foreclosure Mediation
Letter Arranging Mediation
Approval of Mediator
Attorney Information Sheet
Claimant's Counsel Pre-Mediation Checklist
Sample Introductory Session Agenda
Sample Working Session Agenda
Confidentiality Agreement
Suggested Mediation Ground Rules
Memorandum of Settlement
Mediated Settlement Agreement
Fee Sheet

Other Resources

Florida Agency for Real Estate Mediation
National Institute for Advanced Conflict Resolution
Association for Conflict Resolution
Florida Academy of Professional Mediators
Florida Courts