The standard residential agreements of sale mandate that buyers and sellers “will submit all disputes” arising from those agreements to mediation.
Equally clear is the requirement that mediation “be concluded before any party to the dispute may initiate legal proceedings in any courtroom, with the exception of filing a summons if it is necessary to stop any statute of limitations from expiring.” While our courts will enforce the requirement that the parties mediate, not all will dismiss a suit that has been filed by a party who did not first invoke mediation. A fair number of courts will stay proceedings (rather than dismiss the suit) until the parties conclude mediation. Other courts simply dismiss a lawsuit filed prematurely because of the language compelling mediation before suit is initiated.
To answer the broader question, yes, mediation is binding. Regardless, there are many instances where mediation does not occur and where suits are filed and left to thrive unhindered by the failure to mediate. This can happen in several ways. An aggrieved buyer files a request for mediation with the local association of Realtors® claiming that the seller failed to disclose material defects. The request for mediation is served on the seller who does not respond or give any indication that she will participate in the mediation process. Maybe the seller lives thousands of miles away or maybe the seller hopes the matter will go away by sticking her head in the sand.
Pennsylvania Association of Realtors (PRNewsFoto/Pennsylvania Association of Real)