When preparing for mediation, attorneys and clients often are focused on the “mechanics of the deal.” Obviously, having a negotiation strategy that you are prepared to implement is the centerpiece of effective mediation. However, all too often a successful strategy that is well implemented leading to an apparent “good deal” is circumvented as the result of mistakes in the closing of the deal.
Advance Preparation is Key
Specifically, parties in family law mediations tend to resolve their issues late in the day. Mediation is a process that is slow and methodical…up until it is time to reduce the agreement to writing. At this point, the parties and their attorneys are tired. They have generally just spent eight or more hours in deep thought, attempting to artfully maneuver themselves into the best settlement possible. Emotions are often high, as the mediator has carried information back and forth regarding the parties’ respective positions about finances, property, and children. But finally, a resolution is reached.
Now that an agreement has been struck, the process seems to accelerate. Everyone is tired and ready to leave. They all “know” what the deal is and all that is left to do is to jot down the terms and get the document signed. This is an extraordinarily important time in the process that is often neglected, to the client’s detriment and the attorney’s peril. Our Dallas divorce lawyers know that while oftentimes matters come to light post-mediation that get resolved through common sense and the natural de-escalation that occurs when the bulk of the parties’ issues are settled, attorneys and clients should be wary to leave any issues open when reducing their agreements to writing. Details are important at this juncture, and the fact that both the parties and their attorneys are not as sharp as when they started the day at mediation cannot be ignored.
At this point, an attorney’s previous preparation pays dividends. When getting ready for the mediation, the attorney, working with a client, devises a plan to achieve a settlement within a certain acceptable range. Hot button issues are discussed, and ways to bypass potential sticking points are evaluated. When dealing with complex issues, the more preparation that has been done prior to mediation, the better the results in preparing a written settlement agreement at the end of a long, hard day of negotiation.
Don’t Miss the Fine Details
As an example, a common issue that arises in divorce cases is the sale of the marital residence. Assuming that the parties agree to sell the house and have an equal share in the value derived from the sale, language such as, “the parties agree to sell the house and divide the equity” is woefully deficient and potentially unenforceable. More precision is needed and the prepared attorney will be ready to deal with effecting the parties’ intentions. An attorney that has realized, prior to mediation, that the sale of the marital residence may be required to settle the case, will have prepared a list of important issues that must be dealt with to protect the parties and prevent problems after the agreement is entered. An attorney may have prepared a checklist dealing with a potential sale such as the following:
- Precisely when will the house be sold?
- How will the sales price be determined?
- Who will be in possession of the house until it is sold?
- Who will be responsible for the cost of ownership (principal, interest, insurance, maintenance, and property taxes) until it is sold? What credits, if any, will the paying party receive?
- Who will pay the utilities?
- How will any costs for repairs or improvements to make the house be ready for sale be divided?
- How will the sales proceeds be divided?
- Who will sell the house? If not named at the time of the agreement, what is the mechanism for selecting the broker?
- What mechanisms are necessary to force a sale in the event of disagreements or noncompliance?
- Will possession of the house change if the mortgage is not paid? What if the mortgage is not paid because child support is withheld, thus causing the default?
- If the parties agree to a receiver, who will that be?
- What specific events can result in a forced sale?
- Who will prepare the sale/deed documents?
The foregoing is a list of the most obvious issues that the parties and their attorneys should be prepared to address when dealing with the sale of a residence. Child-related issues can be even more complex.
While it can be very easy to overlook fine-detail issues late in the day, or to plan on handling these details later, such “rush to settlement” tactics can prove costly. In preparing closing documents at mediation, the old maxim holds true, “An ounce of prevention is worth a pound of cure.”