Disputes are common in Washington real estate transactions, and commercial leases are no exception. Tenants and landlords may often interpret a particular clause in a leasing contract differently. Sometimes, these misunderstandings result in lawsuits, but reaching a compromise through mediation can be a faster and cheaper approach.
Points of contention
Commercial leases are complex, and poorly written ones may be the some of the most likely candidates for real estate disputes. Rents may include the cost for all — or part of — a property’s expenses. If the landlord does not define the terms precisely, a tenant may take issue with one or more of the conditions. Some common areas of disputes include the following:
- Rent calculation
- Permission to sublet or assign the space
- Failure to approve a tenant’s proposed renovations
- Inadequate property maintenance
- Tenant’s on-site activities
- Ability to enlarge or reduce the rental space
Mediation is a process in which an experienced, unbiased facilitator attempts to help the disputing parties to reach a compromise and avoid a lawsuit.
Faster and cheaper
A mediator charges an hourly fee comparable to a commercial real estate attorney’s rate and less expensive than a lawsuit. Most mediation sessions last four hours or less, but complicated issues might take twice that long to settle.
In a non-jury trial, a judge will generally make its decision based strictly on the law. An experienced mediator, however, encourages participants to think out of the box to reach a satisfactory solution to the issue.
The landlord or the tenant may not like the mediator’s suggestions, but speaking with one another could open the door to a greater understanding of each other’s viewpoints. A respectful conversation is the first step toward reaching a compromise.
The tenant may have a long-term lease in which a good relationship with the landlord should facilitate the resolution of future disagreements. Reaching an agreement through mediation rather than a lawsuit is much more apt to foster a cooperative environment.