Attorney's Fees / Lawsuit / Arbitration in California Lease

[Jessica H.]

Hi guys,

I'm working on my lease agreement for my rental property in California and I'm stuck in the legal clause regarding payment of attorney's fees in a lawsuit. I've purchased NOLO's California Landlord's Law Book: Rights & Responsibilities which came with the lease agreement example. In there, Clause 22, states:

However, they recommend against including the attorney fees clause in the lease for various reasons (in CA, courts don't recognize the one-way attorneys' fees contract provision, tenant's lawyers can take advantage of included attorney's clauses in contract to get paid, etc). So now I'm looking into alternative clauses that I can use such arbitrations/meditations. What do you think of this one I found in an agreement on the web? I like it, but I'm confused about this language: "Each party shall bear their own respective fees and cost relative to the arbitration process and attorneys' fees, if awarded shall not exceed $500." How do you understand it?

Thanks so much in advance! Legal language always gives me a headache. :)

Jessica