India’s real estate sector, contributing 7% to GDP, faces frequent disputes over delayed possession, contractual breaches, and lease terms, exacerbated by a judicial backlog of 4.5 crore cases in 2025 (Narayan, 2020; NJDG, 2025). This paper evaluates mediation’s effectiveness as an Alternative Dispute Resolution (ADR) mechanism for resolving such disputes, emphasizing its speed, cost-efficiency, confidentiality, and ability to preserve stakeholder relationships. Using a doctrinal approach, it analyses legal frameworks like RERA, 2016, the Arbitration and Conciliation Act, 1996, and CPC Section 89, alongside case studies from MahaRERA (500+ resolutions in 2023), UP RERA, and Delhi High Court mediation (MahaRERA, 2023; UP RERA, 2024). Despite mediation’s success, challenges like low awareness, mediator shortages, and non-binding outcomes limit its adoption (Kumar, 2018). Recommendations include mandatory ADR clauses, enhanced mediator training, Online Dispute Resolution (ODR) platforms, and public awareness campaigns, drawing on Singapore’s model (Singapore Mediation Act, 2017). By reducing litigation and fostering amicable resolutions, mediation strengthens India’s real estate sector. This study advocates for reforms to integrate mediation into standard practices, contributing to judicial efficiency and sectoral resilience.