Negotiation in real estate development situations involves a diverse set of actors, from city officials and bankers to community groups and contractors. While many negotiations reach a successful conclusion, it is not unusual for difficulties to arise which can impose costly delays.

The Center for Real Estate Development at MIT asked members of the Public Disputes Program (PDP) at Harvard Law School to prepare a briefing for members of the real estate community reviewing common negotiation problems, particularly those related to mediation, faced by developers and to suggest strategies for dealing with these problems. Part of this briefing paper suggested some general rules about when and how to use mediated negotiation. In addition, it outlines the pitfalls associated with the mediation approach.

Mediation is not a panacea. Some development disputes are, for all practical purposes, impossible to resolve through face-to-face negotiation, even with a mediator. Such disputes are likely to end up in court. However, we do think that litigation can be avoided much more often than it is now. Moreover, we believe that mediation can produce agreements that all the parties involved will consider to be fairer, more efficient, wiser, and more durable.