Dispute Resolution

Occasionally disputes arise during real estate transactions. Mediation can help resolve disputes and should
only be used when all other forms of negotiation have been exhausted. Parties using he SAR Real Estate
Contract have agreed to mediation as part of the contract.

1) Agreement of Parties: When signing the Sunflower contract containing the mediation clause, the parties to the transaction commit to submit any dispute that arises from the transaction to mediation.

Sunflower Association of REALTORS® Uniform contract Section 18 MEDIATION: Any dispute or claim arising out
of or relating to this Contract, the breach of this Contract, or the services provided in relation to this Contract, shall be
submitted to mediation in accordance with the rules and procedures of the Homesellers/Homebuyers Dispute Resolution
System (http://www.sunflowerrealtors.com) prior to filing a lawsuit. Disputes shall include representations made by the
Buyer, Seller, or any listing and selling broker(s) or their agents, employees and associate broker(s) in connection with
the sale, purchase, financing, condition, or other aspect of the Property including, without limitation, allegations of
concealment, misrepresentation, negligence, and/or fraud. Seller and Buyer shall pay an equal portion of the mediation
fees and costs. Any party to this mediation will pay their own cost of counsel if any. Any agreement signed by the parties
pursuant to the mediation conference shall be binding.

The following matters are excluded from mediation hereunder: (a) earnest money disputes; (b) judicial or non-judicial
foreclosure or other action or proceeding to enforce a mortgage or escrow contract; (c) an unlawful detainer action; (d)
the filing or enforcement of a mechanic’s lien; (e) any matter which is within the jurisdiction of a probate court; (f)
disputes during time before closing occurs or is scheduled to occur; (g) any matter that would involve a claim less than
the maximum for small claims jurisdiction under Kansas law; and/or (h) violation of Kansas real estate license laws.
Mediation fees will be prepaid before the mediation begins and a failure to pay a pro rata share will constitute a default
in the obligation to mediate.

2) Initiation of Mediation. Any party may initiate mediation by completing, signing and mailing the Sunflower Association of REALTORS, Inc., the Associates in Dispute Resolution, LLC, and all other parties, a Request to Initiate Mediation Transmittal Form.

Request to Initiate Mediation Transmittal Form

3) Such form shall contain or be accompanied by the following information, to the extent known or readily available:

a) A fully executed true copy of the sales contract containing the mediation clause;

b) The names, addresses and telephone numbers of the parties to the case, including the name of the parties insurance company;

c) Nature and amount of the claim (brief statement of the facts that give rise to the claim, the damages of relief sought);

4) Selection of Mediator. Not later than ten days after receipt of the Transmittal Form, Associates in Dispute Resolution, LLC shall appoint a qualified mediator. No person shall serve as a mediator in any dispute if that person has any financial or personal interest in the results of the mediation unless, after full disclosure, the parties have given their written consent.

5) Time and Place of Mediation Conference. Within ten days of his appointment, the mediator will notify the parties of the date, time, and place of the mediation conference. The mediator will use reasonable efforts to set a date, time, and location acceptable to all parties.

5) Conduct of Mediation Conference. At the mediation conference, the mediator will conduct an orderly settlement negotiation, the parties will be expected to produce all information reasonably necessary to understand the issue(s) presented. Such information will usually include relevant written materials and a description of any witness(es) and what each could testify to. The mediator may ask the parties for written materials/information in advance of the mediation conference.

At the mediation conference, the mediator will conduct an orderly settlement negotiation. Parties at the mediation conference must have authority to enter into and sign a binding written agreement to settle the dispute. The mediator will be impartial in such proceedings and has no authority to force the parties to agree to a settlement.

6) Representation by Counsel. Participation of legal counsel is generally discouraged. However, any party may be accompanied by and represented at the conference by counsel. In the interest of fairness, a party who intends to be represented by counsel shall notify the mediation vendor and other parties of such intent at least ten days in advance of the
conference.

7) Confidentiality.

a) No aspect of the mediation shall be relied upon or introduced as evidence in any arbitration, judicial or other proceeding, including but not limited to:

i) Views expressed or suggestions made by a party with respect to a possible settlement of the dispute;

ii) Admissions made in the course of the mediation;

iii) Proposals made or views expressed by the mediator or the response of any party thereto.

b) No privilege shall be affected by disclosures made in the course of mediation.

c) Disclosure of any records, reports, or other documents received or prepared by mediation vendor cannot be compelled.

d) The mediation vendor shall not be compelled to disclose or to testify in any proceeding as to information disclosed or representations made in the course of the mediation or communication to the mediator in confidence.

8) Mediated Settlement. The mediated settlement must be reduced to writing by the parties or by the mediator (if the mediator is an attorney), dated and signed by all parties either at the mediation conference or no later than ten days after the conclusion of the mediation conference (See Appendix F for sample agreement).

9) Judicial Proceedings and Immunity. Neither the mediation vendor, the mediator, nor the association, shall be deemed "necessary parties" in any judicial proceedings relating to mediation under this program. Neither the mediation vendor, nor any mediator, nor the association,shall be liable to any party for any act, error, or omission in connection with any service
rendered under the program.

10) Mediation Fees. Mediation fees shall be in accordance with the published fee schedule.

11) Timing of Claims. The time limitation by which parties must bring claims in accordance with these Rules and Procedures are to be governed by state law. Local counsel should be consulted regarding this issue.

Frequently Asked Questions About Mediation

What is mediation?

Mediation is a non-adversarial process that brings disputing parties together with a neutral, unbiased third party (the media-tor) who assists the parties in reaching a mutually agreeable settlement of the dispute. The mediator does not render decisions or impose sanctions. Settlement terms reached and agreed to by the parties during the mediation become binding when par-ties sign a written settlement agreement.

How does mediation differ from arbitration?

An arbitrator has the authority to render a binding decision, similar to a judge in a court of law. The parties in arbitration forfeit their right to have their dispute tried in a court of law. Mediators, on the other hand, have no authority to render a de-cision but merely assist the parties to arrive at a mutually agreeable solution. If the parties fail to reach a settlement, they are free to pursue other forms of dispute resolution, including arbitration and litigation. In successful mediations all parties have a part in working out the terms of the eventual settlement and must agree to the final outcome for it to be enforceable.

When the DRS mediation clause is presented to a buyer or seller, isn't the real estate salesperson raising a "red flag" by bringing up the issue of a potential dispute at the outset of the transaction?

The mediation clause is similar to other clauses in the contract designed to protect the interests of the parties. The mediation clause in no way suggests that a dispute will arise, any more than the option to have a home inspection means that there will be defects in the property. The mediation clause provides parties with an efficient, less expensive alternative to litigation in the event a dispute should arise. The agreements reached in mediation aren’t binding unless both parties sign a written settlement agreement, and if a settlement isn't reached, parties are free to submit their dispute to arbitration or go to court. Salespeople should stress that mediation is successful much of the time.

If a party signs a contract or an addendum that contains a mediation clause, is the party required to mediate if a dispute arises?

Yes. The signed agreement to mediate is binding and parties must submit the dispute to mediation. The agreement to mediate does not obligate the parties to reach an agreement, and parties retain the right to go to court in the event that mediation is unsuccessful. If a settlement is reached through mediation it becomes binding when it is put into writing and signed by all the parties. Once the parties have signed a written settlement agreement, they are legally bound by its terms and cannot subsequently litigate the dispute.

Who are the mediators?

Do the parties involved in a dispute have the option of choosing the mediator?

What types of disputes can be mediated?

Almost any type of dispute between or among buyers, sellers, brokers and other parties to a real estate transaction can and should be mediated. These include: cost of repairs to property when there is a question of possible negligence or failure to disclose a known defect (e.g., a defective roof or termite infestation), claims for damages when there is a charge of possible misrepresentation concerning the condition of the property (e.g., central air conditioning was never connected to the new addition on the
house).

Are there any types of disputes that can't be mediated under DRS?

How much does mediation cost?

How long does the whole process take?

Under the DRS procedures, the mediation conference must be held within thirty (30) days from the date on which the media or receives the "Request to Initiate Mediation Transmittal Form" from the party initiating mediation. Most mediation conferences, however, are scheduled and conducted within (30) thirty days. The typical mediation conference lasts from between two to four hours, and a second conference is rarely needed.

Can parties be represented by counsel?

Can DRS be used to resolve disputes for commercial real estate transactions?