PENNSYLVANIA'S MANDATORY REAL ESTATE MEDIATION CLAUSE EXPLAINED
Paragraph 27 the Mandatory Mediation Clause of the PAR Form or the Pennsylvania Standard Agreement of Sale of Real estate provides for mandatory mediation of any dispute that arises from the sales agreement before you may litigate the dispute. Here is what that means for you and how the process works.
Understanding Paragraph 27 of the PAR Agreement
Common Questions About Paragraph 27 of the PAR Agreement
What is the acronym PAR?
PAR stands for the Pennsylvania Association of REALTORS®. They are the governing body for real estate agreements throughout Pennsylvania.
What is the PAR agreement?
The PAR agreement is the contract you signed when you bought or sold your home. Its full name is the Standard Agreement for the Sale of Real Estate. It is the most commonly used form for the sale of real estate in the Commonwealth of Pennsylvania.
What is Paragraph 27 of the PAR agreement?
Paragraph 27 is the mandatory mediation clause in the contract. It requires both parties, buyer and seller, to mediate any dispute that arises from the real estate transaction before either of them can take their dispute to court. While many parties have tried to circumvent the mediation process, most courts will send the dispute to mediation before they can proceed with the litigation process.
What does Paragraph 27 actually say?
"Buyer and Seller will submit all disputes or claims that arise from this Agreement, including disputes and claims over deposit monies, to mediation. Mediation will be conducted in accordance with the Rules and Procedures of the Home Sellers/Home Buyers Dispute Resolution System, unless it is not available, in which case Buyer and Seller will mediate according to the terms of the mediation system offered or endorsed by the local Association of REALTORS®. Mediation fees, contained in the mediator's fee schedule, will be divided equally among the parties and will be paid before the mediation conference. Any agreement reached through mediation and signed by the parties will be binding. Any agreement to mediate disputes or claims arising from this Agreement will survive settlement."
What does Paragraph 27 mean in practice?
It means that before anyone can take a real estate dispute to court in Pennsylvania, mediation comes first. This applies to all disputes covered by the agreement, including hand money disputes and failure to disclose disputes.
If mediation produces a signed agreement, both parties are bound by it. If it does not, both parties are free to pursue other legal options, including filing a lawsuit.
There is one exception. The law recognizes that being required to wait for mediation should not put your legal rights at risk. So if either party is worried that a legal deadline, called a statute of limitations, might pass while mediation is taking place, you may file a lawsuit to stop the statute of limitations from running.
How Paragraph 27 of the PAR Agreement Affects Real Estate Disputes
Finding Paragraph 27 in your contract can feel like a shock, especially when you are already dealing with a dispute that has turned what should have been a straightforward transaction into a source of real stress. Here is what you actually need to know.
Mediation is not a courtroom.
The mediator is not going to issue a ruling against you or decide who is right and who is wrong. You keep full control throughout the entire process. No agreement can be reached without your consent.
You did not agree to give anything up.
Signing a PAR agreement means you agreed to attempt mediation before going to court. It does not mean you agreed to accept an outcome you are not comfortable with. If mediation does not produce an agreement, you retain the right to pursue other legal options.
This is designed to be as straightforward as possible.
Real estate mediation is typically far faster and less disruptive than litigation. Most disputes are addressed in a single session, without the months or years that court proceedings can require.
Real Estate Mediation Service exists specifically to help people in your situation find a way forward.
REMS on Paragraph 27
Why Complying With Paragraph 27 Matters
"Our mediators are skilled at highlighting the benefits of complying with the mandatory mediation clause that is in the Standard Agreement of Sale. Courts take this clause seriously and will require you to go to mediation. Complying with this clause has many benefits and we are happy to talk to both sides confidentially to answer your questions. "
Alicia Nocera, Esq. - Owner of Real Estate Mediation Service, LLC
Specialized Help With Paragraph 27 Mediation
How Real Estate Mediation Service Can Help You
Real Estate Mediation Service has helped hundreds of Pennsylvania buyers and sellers work through exactly the kind of dispute you are facing right now. We understand the PAR agreement, we understand the disputes that arise from it, and we understand how confusing this moment can feel.
When you come to us, you work with a specialist who knows Pennsylvania real estate disputes inside out. Every case handled through Real Estate Mediation Service involves a real estate transaction, which means we bring a depth of knowledge that makes the process clearer and more efficient for everyone involved.
Submit a mediation request, we confirm the details with both parties, and guide you through a confidential session at a time that works for you. Remote mediation is available if that is more convenient.
Real estate only
Every case we handle involves a real estate transaction. No other dispute types, no divided expertise.
Capped fees
Pre-litigation mediation fees are capped at $200 to $500 per party under our exclusive RAMP contract.
Remote or in-person
Sessions available via Zoom or at our Wexford office. You choose what works best for you.
Learn More About Paragraph 27 of the PAR Agreement
Resource 1: Enforcing Mediation Provisions in Real Estate Agreements
Learn how mediation provisions in Pennsylvania real estate agreements may be enforced when a dispute arises between the parties.
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Resource 2: Invoking the Mandatory Mediation Clause Against Buyers
Explore how the mandatory mediation requirement can affect the strategy, timing, information exchange, and potential resolution of a real estate dispute.
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Resource 3: Mandatory Mediation Clause Upheld in Real Estate Agreement
Review a Pennsylvania real estate matter in which the court ordered the parties to participate in mediation as required by their agreement.
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Resource 4: Mediation Regarding Residential Agreements of Sale: Is It Binding?
Learn more about the mediation requirement contained in residential agreements of sale and what it means for parties involved in a real estate dispute.
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Resource 5: Zaucha v. Chan
Read the Pennsylvania Superior Court decision involving a dispute over the mediation requirement contained in a residential Agreement of Sale.
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Resource 6: Mediation: Sound Legal Guidance for Realtors and Their Clients
Explore practical considerations surrounding real estate mediation, including preparation, participation, and issues that can arise if a dispute does not resolve at mediation.
View the Full Resources
Paragraph 27 Requires Mediation. We Make It as Simple as Possible.
You do not need to have it all figured out before you reach out. Submit a request and a specialist real estate mediator will be in touch promptly to walk you through the next steps.
Most disputes are resolved the same day. Yours could be too.