MEDIATION AND CO-OWNERSHIP

 

Co-ownership conflicts often arise from a lack of knowledge of the rules governing the immovable, a lack of communication or transparency, or from an unresolved misunderstanding.

In such cases, a trial is not the only avenue. Before commencing legal proceedings, and even once they are engaged, it is still time to opt for the services of a mediator. The latter could resolve the conflict between co-owners or with the members of the board of directors.

 

Voluntary process

Mediation is a voluntary participatory process of dispute resolution. It is governed by Articles 1 to 7 and 605 to 619 of the Code of Civil Procedure. A neutral and impartial mediator leads the process. He is not called upon to rule on the dispute - as a judge or an arbitrator would - nor to impose any decision whatsoever. Rather, his role is to facilitate communication and negotiations between the parties, by advocating a constructive approach, so that they can find a solution to their conflict. It is all predicated upon a mutual understanding of the problem to resolve it and eventually reach an agreement.

Modus operandi

The mediator is chosen by the parties by mutual agreement, directly or through a third party. Before initiating mediation, the mediator informs the parties of his role and duties. He also specifies the applicable rules and the length of the process.

During this stage, the facts, arguments and needs of the parties are taken into account. As the mediation progresses, solutions are proposed, until an outline of an agreement emerges from the exchanges and is put down in writing. This agreement does not have the enforceability of a judgment. It is predicated on the goodwill of the parties involved, unless it is decided that it constitutes a transaction. This transaction (between the parties) has henceforth the authority of res judicata and will be susceptible of forcible execution as soon as it has been homologated by the court.

The declaration of co-ownership

Some declarations of co-ownership include a mediation clause. They usually require co-owners and directors to submit their dispute to a mandatory mediation process. It is generally provided that the mediator is a lawyer or notary with experience in the field of co-ownership.

In principle, the parties cannot resort to the courts, as long as they have not gone through the process. In many cases, a clause provides that if mediation fails, the parties will go to arbitration, which concludes with a final and non appealable decision. Thus, using the courts is in principle no longer possible.

However, filing an application to the courts is not excluded in all cases. It should be noted that a mediation clause properly drafted provides that any litigation involving a small claim ($ 15,000 or less) remains subject to the jurisdiction of the Small Claims Division of the Court of Québec. In such cases, the parties must first attempt to settle their dispute through mediation. But if the talks are unsuccessful, they can go directly to this court without submitting to arbitration.

If the declaration of co-ownership does not provide for an alternative dispute resolution process, it is always possible to include it in the declaration of co-ownership, by the means of an amendment at the occasion of its partial or complete rewrite.

Benefits of mediation

Mediation has many advantages over traditional litigation before the courts. It often leads to the resolution of a conflict. For example, mediation can:

  • Give an opportunity to the parties to discuss the issues, to clarify their points of view, to identify their differences, to identify their needs and interest, to explore solutions and to reach (when possible) a satisfactory agreement. Mediation promotes communication, as each party has the opportunity to express its needs and to be heard;
  • Appease the parties and insure the preservation of their future relations;
  • Allow creative solutions to the litigation, which is not always possible during a trial;
  • Reduce costs: the cost of a mediation is usually lower than those of a court hearing;
  • Guarantee the private and confidential nature of the exchanges. What is shared during a mediation cannot be filed in court;
  • Reduce the level of stress of the parties. This approach is less emotionally distressing than a legal proceeding in which the parties are passive;
  • Promote a spirit of collaboration: the agreement reached after mediation is generally an acceptable solution, since the parties negotiated it by mutual agreement. It is win-win;
  • Restore harmony. Remember that, whatever the conclusion of a mediation, the co-owners will have to continue to live in the same building;
  • Allow the parties to settle the dispute as they have chosen, instead of having the outcome imposed by a third party (a judge or arbitrator) that they do not know and who does not know them.

Prerequisites for mediation

The parties entering into mediation are required to participate in good faith. They must actively cooperate in finding a solution and agree to compromise on their respective requests.

Application for an Injunction

Before entering into mediation, and possibly arbitration, a litigant may (in certain circumstances) apply to the Superior Court of Quebec for a provisional injunction to prevent irreparable harm. Such an order will thus preserve its rights, if its rights are in jeopardy, although it must nevertheless submit to mediation and ultimately to arbitration.

Mediation and its limits

Mediation is not a panacea for resolving all disputes. For example, a syndicate seeking an order to prevent a co-owner from carrying work in a common portion will not achieve this result using mediation, and also if it had to compel a co-owner to comply with a provision of the by-laws of the immovable in the declaration of co-ownership; it should rather enforce the penal clause to impose the fines stipulated therein. The syndicate could also resort to the courts to get a final ruling on the application of the law, by setting a enforceable precedent for the parties.

Watch out for prescription (statute of limitation)

 Moreover, it is important to keep in mind that, like any other means used to settle a dispute - other than through legal proceedings or arbitration - mediation does not interrupt extinctive prescription (statute of limitation). Remember that the holder of a right, that fails to act within the delays, is at risk of having prescription invoked as a defence to have the application dismissed. However the parties may agree to waive prescription already acquired and the benefit of time elapsed in a signed document to suspend prescription for the duration of the mediation process, without however such suspension lasting more than 6 months.

 

WHAT YOU SHOULD KNOW ! Mediation is an alternative method of dispute resolution that guarantees full control of the conflict by the parties. It deals with the crux of the dispute, usually caused by a breakdown in communication. Unlike a trial or arbitration where a third-party rules on the dispute and imposes a solution, mediation ensures, throughout the whole process, that nothing can be decided without the agreement of the parties.

WHAT TO KEEP IN MIND : Mediation is an informal process by which an impartial third party (the mediator), who has no decision-making power, assist the parties to find an acceptable solution. This type of conflict management is intended to make better use of our courts.

WARNING !  All disputes have peculiarities. It is thus advisable to put the odds on your side by choosing a mediator whose training, approach and experience can make a difference. In co-ownership, it is preferable that the prospective candidate be an expert in the field.

 CONSULT THE WEB SITE : MÉDIATION ET ARBITRAGE EN COPROPRIÉTÉ INC.

 

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