In Real Estate, Conflict Resolutions Are Not Limited Only to Litigations

ESV Eunice Neme Agu MNIVS. RSV, MICMC

Conflicts and Disagreements are an inevitable part of life, often arising from lack of understanding, poor communication, unrealistic expectations, power struggles etc between individuals, groups and organizations.  The Real Estate sector which encompasses activities as buying and selling, facilities and Property management, property valuation, property development, Financing and provision of multifaceted professional service is not immune but rather plagued with its fair share of these conflicts.

When disputes are not well managed and resolved, the associated returns, and the associated multiplier benefits to the economy will become hampered (Okpaleke et al, 2014).

The resolution of these disputes in the past had been largely by traditional court litigation. However, there are now alternative avenues, referred to as Alternative Dispute Resolution (ADR) which consist of a range of processes used to resolve disputes without resorting to litigation. These alternatives include: Arbitration, Mediation, Conciliation and Negotiation.

Real Estate transactions are inherently time sensitive and delays of any sort can significantly impact the outcome of the transaction. Unfortunately, disputes have arisen and the parties who have taken the path of litigation have lost both time and money. Successes which would have been achieved through litigation had often been impeded by high costs, delays, formalism and court congestions. This is exemplified in a Supreme Court Judgement of February 5, 2021 in a Landlord and Tenant case of Pillars Nig. Ltd. V. William Kojo Desbordes regarding a 26-year development lease. The case initiated in 1993 lasted 13 years at the High Court, 3 years at the court of appeal and12 years at the Supreme Court. A total 28 Years! To avoid such frustration, parties now seek alternatives which we will further examine.

ADR Mechanisms used to help parties work together to resolve disputes include:

Arbitration: A neutral Arbitrator hears evidence and arguments from both sides and renders a binding decision, allowing parties to choose an arbitrator with expertise in the area of dispute.

Mediation: A neutral third-party facilitates discussions between the disputing parties to help them reach a mutually acceptable agreement.

Negotiation: Parties engage directly in discussions to resolve their disputes without third-party intervention.

Conciliation:Neutral third-party facilitating communications, helps parties to reach a mutually agreeable settlement. Unlike mediation, the conciliator may suggest ways to resolve the conflict.

Benefits of ADR in Disputes:

          •        Cost-Effectiveness: ADR is often more cost effective than traditional litigation due to reduced legal fees, court expenses and prolonged procedures..

          •        Efficiency: ADR processes like mediation and arbitration provide quicker resolutions.

          •        Preservation of Relationships: ADR emphasizes collaboration and mutual understanding. The open dialogue helps maintain relationships between parties, which is crucial in real estate transactions where ongoing partnerships are vital for future dealings.

          •        Privacy and Confidentiality: Many of the ADR methods like Mediation offer privacy and confidentiality which is crucial for protection of sensitive information and maintenance of reputation. Court cases are matters of public record and court sittings are also public.

          •        Flexibility: ADR processes are tailored to the specific needs and convenience of the parties resulting in more creative and efficient solutions. Some of these include: choice of mediators or arbitrators with relevant expertise, choice of times and locations of sittings etc.

          •        Accessibility:  ADR mechanisms have made dispute resolution more accessible to individuals including those with limited financial resources.

          •        Reduced Formality and Stress: ADR processes are largely informal thereby reducing the stress associated with intimidations that come with courtroom trials and the procedural hurdles of litigation.

          •        Increased Control: Parties have more control over the dispute resolution process, allowing them to shape and have more ownership over the outcome.

Systems of ADR:

Parties can access ADR through Private Mediators, National Industrial Court of Nigeria (NICN), various State Mediation Centres, The Multi-Door Courthouse System, Arbitration Agreement/Clauses etc. The Lagos state Multi Door Courthouse (LMDC) introduced in Lagos in 2002 and adopted by other states, including Edo and Delta States integrates ADR mechanisms into the court structure provideing multiple options (Doors) for dispute resolution, including mediation, arbitration, and negotiation.  The approach includes some cases filed in court but referred to the MDC for ADR as well as others whereby the parties approach the MDC directly for ADR.  The chosen method is used to resolve the dispute and the outcome recorded and implemented.  The great advantage of the Multi Door Court System is the oversight of the judiciary, agreements can be recorded as judgements and enforced through the mechanism of the court.

ADR is backed by such laws as the Arbitration and Mediation Act 2023 (AMA), Some states like Lagos, Rivers and Delta have their own individual Arbitration Laws. On 11th February 2025, The Federal Ministry of Justice Nigeria unveiled ‘The national policy on Arbitration and Alternative Dispute resolution for 2024-2028 which promotes ADR as a primary approach for dispute resolution

Challenges:

Despite ADR’s benefits, challenges persist, including:

1. Enforcement of ADR Agreements: Ensuring compliance with ADR agreements remains a significant challenge coupled with limited options for appeal.

2. Inadequate Training: A shortage of skilled ADR practitioners affects the quality of resolutions.

3. Cultural Barriers: Traditional perceptions of justice often emphasize litigation, making it harder for some to accept ADR as a viable alternative.

Conclusion:

Alternative Dispute Resolution (ADR) offers effective ways to resolve real estate as well as other disputes, revolutionizing conflict resolution in Nigeria. It offers numerous advantages and benefits by providing parties with efficient, cost-effective, and expert solutions. By embracing ADR, parties can resolve disputes efficiently, effectively. While litigation has its place in certain matters and situations, ADR remains a preferred choice for parties seeking efficient and amicable resolutions to their disputes and as such should be embraced.

Eunice, a registered Estate Surveyor and Valuer, wrote from Asaba, Delta State, Nigeria