Streamline real estate disputes with arbitration
Buying or selling a home is often the largest financial transaction a person will make in their lifetime. While most real estate deals go smoothly, disputes can occasionally arise between buyers, sellers, agents, and other parties. When disagreements occur, arbitration can provide an efficient alternative to resolving real estate conflicts compared to lengthy court battles. This article explores using arbitration to streamline real estate disputes.
The benefits of arbitration
Arbitration offers several advantages over traditional litigation when real estate deals go sour. First, arbitration is usually much faster than court cases, which routinely drag on for months or years. Arbitration hearings are typically scheduled within a few weeks or months of filing the claim. This allows all parties to resolve issues quickly and move forward.
Arbitration is also less expensive than litigation. Attorney fees, expert witnesses, depositions, paperwork and other court costs can be staggering. Arbitration eliminates much of this financial burden through simpler procedures and rules of evidence.
Further, arbitration provides a private, confidential process away from the public nature of courts. Real estate disputes often involve sensitive issues like finances, property conditions, contracts and more. The privacy of arbitration shields parties from airing dirty laundry in a public forum.
Additional reading: Is it better to engage only one, or more than one property agent?
How arbitration works
Arbitration involves hiring a neutral third-party arbitrator to resolve the real estate disagreement. All parties present evidence and make arguments at a hearing. The arbitrator then issues a binding decision to settle the matter.
Parties in arbitration have flexibility in choosing the arbitrator and setting parameters like location, rules of evidence, and arbitration style. Arbitrators are often real estate attorneys familiar with typical property issues and disputes. Their expertise leads to fair, informed decisions the parties are obligated to follow.
Arbitration is voluntary unless a prior agreement compels it. Many real estate contracts mandate arbitration for future conflicts. These provisions are generally enforceable. If arbitration is optional, parties must mutually agree to the process. Even without a contractual clause, arbitration still provides an efficient alternative to court when both sides are willing to participate.
Is arbitration right for you?
Arbitration is not ideal for every scenario. Claims seeking to set broader legal precedents or enact social change may be better suited for court. The confidential nature of arbitration also precludes notifying other impacted parties like in a class action lawsuit. However, for most real estate disputes between the principal parties, arbitration offers a quicker, cheaper and more private route to resolve issues.
If faced with a real estate disagreement, consider proposing arbitration as an effective way to streamline the process and get back to business. The simplicity, speed and cost savings of arbitration can be a “win-win” over the alternative of a draining court battle. Thoroughly weigh all options and consult qualified local counsel for guidance when evaluating the best path forward to resolve real estate conflicts.
