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Palo Alto Residential Leasing: The Mandatory Mediation Ordinance (Part I)

By April 1, 2010Blog, Real Estate Law

In a recent blog, we discussed a municipal ordinance in Palo Alto, California that residential landlords should be wary of.  Here we discuss another such Palo Alto Ordinance, titled Mandatory Response to Request for Discussion of Disputes between Landlords and Tenants (“Mandatory Mediation Ordinance”), found in Chapter 9.72 of the Palo Alto Municipal Code.

The Mandatory Mediation Ordinance is premised on the notion that fostering communication between landlords and tenants is key to a positive residential housing environment.  The highlight of the Ordinance is the requirement that all landlords and tenants of covered properties (most residential rental properties are covered) must participate in the conciliation and mediation process outlined in the Ordinance.  The general rules of this process are as follows:

1.    Within 21 days of learning the facts giving rise to a dispute, either party may initiate the dispute resolution process by filing a written request with the City’s facilitation administrator.
2.    Provided that the facilitation administrator deems the case worthy, he or she will notify the landlord and tenant that a case has been opened and promptly assign the case to a mediator, who contacts all relevant parties.

3.    A minimum period of at least 14 days is to be provided for conciliation efforts.

4.    If conciliation is unsuccessful, a mediation session is held.  Barring unanimous consent of the parties, the session must be held within twenty-eight (28) days of the initial filing for dispute resolution.

5.    Mediation sessions are governed by the following basic rules: (i) The parties involved in the dispute must personally appear at mediation; (ii) All parties must participate until completion of the mediator's opening statement, after which, participation is voluntary; (iii) All parties appearing must have the legal authority to resolve the disputes; and (iv) Additional sessions may be scheduled, as needed, with the consent of the parties. (Section 9.72.040(g))

6.    The ordinance does not require a resolution of the dispute at the conciliation or mediation – only that the parties participate.  “No party shall be obligated to reach any specific agreement, or to reach any agreement at all, as a result of participating in conciliation or mediation communications.”  (Section 9.72.040(f))

The Palo Alto Mediation Program website provides additional information on the conciliation/mediation process.

A practical question is whether the conciliation/mediation process must reach its conclusion before legal action may be taken – eviction of a non-paying tenant, for example.  Could a tenant who receives an unlawful detainer complaint delay eviction by initiating a mandatory mediation?  The ordinance does not answer this question, however the time line and outside dates contained in the conciliation/mediation process should limit the impact of such tactics.

In the near future, we will be reviewing other important aspects of the Mandatory Mediation Ordinance.

Scott M. Toussaint, Real Estate Group