Case Study: Purchase and Sale/Zoning Dispute

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The buyers, a group of investors, made an offer that was accepted on a small building to use as office space, but discovered that the building was not commercially zoned as first represented by the selling broker. The sellers refused to execute a purchase and sale agreement conditional on rezoning, so the buyers sued for specific performance. As they faced protracted litigation and discovery costs of more than $25,000, their lawyers suggested they mediate.

Result
The buyers resolved to share the legal costs of rezoning with the seller; the broker agreed to reduce his leasing commission for the additional office space. The mediation cost less than $1500 per party.