Real Estate Arbitration

Definition of "Real Estate Arbitration"

Flor Lopez real estate agent

Written by

Flor Lopezelite badge icon

Charles Rutenberg Realty

The real estate arbitration definition is an alternative way to settle disputes when the parties involved want to avoid a trial. There are some significant differences between an arbitration and a trial that we’ll cover in this explanation. Still, the evidence is presented in such the same way, statements are recorded, and witnesses can be heard. You need to know from the beginning that there is no judge during an arbitration, no jury, and the decision is final without the possibility of appeal.

What does Arbitration Mean?

As we already established that arbitration doesn’t work as a court trial, let’s see how it does work. Through an arbitration, unlike a mediation, an intermediary is the decision-maker, not a judge or a jury, and there is no possibility of an appeal if the decision isn’t satisfactory. There are, however, benefits to arbitration. 

 

Decisions of an arbitrary dispute are not public, and the press or any outside parties do not have access to any information shared during the arbitration. Another benefit of arbitration comes from the fact that they are less formal proceedings, resulting in a quicker procedure. Unlike a trial, arbitration is much more likely to end in mutually beneficial results, because it involves open discourse and communication between the parties involved. Compromises are more accessible than the strict reading of the law would allow. 

 

The one downside of arbitration is that the parties involved have only one shot at resolving their dispute. This can lead to higher costs on the parties involved as they want to ensure they have the best defense and experts that money can buy.

What is Arbitration in Real Estate?

When it comes to the real estate market, any type of disagreement between two parties can be resolved through arbitration. Some examples of issues that can be solved through this time-saving practice are costs of repairs, repair and inspection issues, money disputes and incorrect claims about the property’s condition, the state of appliances or fixtures, and so on. The NAR also has procedures that can be used in disputes between realtors or any ethical complaints that a realtor can receive from a client.

 

It is important to take into account that if there is an accusation of criminal conduct, arbitration shouldn’t be used. When criminal conduct or acts occur, a criminal trial should be the way to go. Also, when the dispute is dealing with complex issues of a legal manner or involving property rights, the legal process of litigation in Civil Court would help the parties involved.


DISCLAIMER: The information presented above should not be taken as legal advice. If you encounter any legal situation or arbitrary disputes, contact a real estate attorney, lawyer, or legal advisor. Every situation can be unique, and the law can differ from one state to another.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Book value is a quintessential term used in the financial world and the real estate business. Though, there are slight differences in its interpretation in these two areas of ...

Burdens one parcel of land (the servient estate) for the benefit of another parcel (the dominant estate). ...

When it comes to the subsurface rights definition, the meaning needs to be defined from the US perspective as these rights are not a default elsewhere on the planet. In general, in the US, ...

Property that is zoned for industrial use, including manufacturing, research and development purposes, factory office and warehouse space, and industrial parks. ...

The substitution of one person or business for another when the substituted person or business has the same rights and obligations as the original party. An insurance company can surogate ...

Generally, a tight market does not offer too much opportunity for negotiations.  More precisely, a tight market means a trading environment where the spreads between the asking and ...

Where property is sold to the highest bidder. ...

Insurance protection for the replacement cost of damaged property. Thus, the accumulated depreciation is not subtracted in determining the amount of reimbursement. ...

Group of rental occupants acting together. ...

Popular Real Estate Questions