Ask a lawyer:
What are the recommended provisions for a Real Estate Commission Dispute Resolution Agreement?
Introduction
This response will address the recommended provisions for a Real Estate Commission Dispute Resolution Agreement in Kenya. It will delve into the legal framework governing real estate transactions and commission disputes, highlighting key considerations for drafting an effective agreement.
Table of Contents
Legal Framework
The Law of Contract
The Real Estate Act, 2012
The Estate Agents Act, 1963
Recommended Provisions for a Real Estate Commission Dispute Resolution Agreement
Scope and Applicability
Dispute Resolution Mechanisms
Negotiation
Mediation
Arbitration
Governing Law and Jurisdiction
Confidentiality
Costs and Expenses
Enforcement
Conclusion
Legal Framework
1. The Law of Contract
The Law of Contract in Kenya is governed by the Contract Act, Cap 23 of the Laws of Kenya. This Act establishes the general principles of contract formation, including offer, acceptance, consideration, and intention to create legal relations. It also outlines the legal consequences of breach of contract, including remedies such as damages, specific performance, and injunctions.
2. The Real Estate Act, 2012
The Real Estate Act, 2012 regulates the real estate sector in Kenya, including the licensing and registration of real estate agents. It also establishes the Real Estate Regulatory Authority (RERA), which is responsible for overseeing the real estate industry and resolving disputes between real estate agents and clients.
3. The Estate Agents Act, 1963
The Estate Agents Act, 1963 regulates the activities of estate agents in Kenya. It requires estate agents to be licensed and registered with the Estate Agents Registration Board (EARB). The Act also outlines the duties and responsibilities of estate agents, including the requirement to act in good faith and to disclose all material facts to their clients.
Recommended Provisions for a Real Estate Commission Dispute Resolution Agreement
1. Scope and Applicability
The agreement should clearly define its scope and applicability. It should specify the parties to the agreement, the subject matter of the agreement (i.e., the real estate transaction), and the specific circumstances under which the dispute resolution provisions will apply.
2. Dispute Resolution Mechanisms
The agreement should outline the various dispute resolution mechanisms available to the parties. These mechanisms should be clearly defined and ranked in order of preference.
2.1 Negotiation
Negotiation should be the first step in resolving any dispute. The agreement should encourage the parties to attempt to resolve their differences amicably through negotiation.
2.2 Mediation
If negotiation fails, the parties should consider mediation. Mediation is a process where a neutral third party assists the parties in reaching a mutually acceptable solution. The agreement should specify the process for selecting a mediator and the terms of the mediation process.
2.3 Arbitration
If mediation fails, the parties may choose to proceed to arbitration. Arbitration is a process where a neutral third party (the arbitrator) hears evidence and makes a binding decision on the dispute. The agreement should specify the process for selecting an arbitrator, the rules of the arbitration process, and the enforceability of the arbitrator's decision.
3. Governing Law and Jurisdiction
The agreement should specify the governing law and jurisdiction for resolving any disputes. This will ensure that the dispute is resolved in accordance with the applicable legal framework.
4. Confidentiality
The agreement should include a confidentiality clause to protect the parties' confidential information. This clause should specify the types of information that are considered confidential and the obligations of the parties to maintain confidentiality.
5. Costs and Expenses
The agreement should address the costs and expenses associated with the dispute resolution process. This may include the costs of mediation, arbitration, and legal representation. The agreement should specify how these costs will be allocated between the parties.
6. Enforcement
The agreement should include provisions for the enforcement of the dispute resolution provisions. This may include provisions for the appointment of a court-appointed receiver or the issuance of an injunction.
Conclusion
A well-drafted Real Estate Commission Dispute Resolution Agreement is essential for protecting the interests of all parties involved in a real estate transaction. By incorporating the recommended provisions outlined above, parties can ensure that any disputes are resolved fairly, efficiently, and in accordance with the applicable legal framework. It is advisable to seek legal advice from a qualified real estate lawyer to ensure that the agreement is tailored to the specific circumstances of the transaction.
Answered by mwakili.com