Traditionally, real estate industry disputes rely on negotiation for solutions. If negotiation fails, litigation is often initiated. Mediation involves the skillful intervention of a third-party professional to help resolve disputes that arise between two or more parties.Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts. The parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters,” or “arbitral tribunal”), whose decision (the “award”) they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.
Pros and Cons of Arbitration
• Faster and cheaper than a court trial
• The parties choose the arbitrator
• The arbitration is not public, so lacks transparency
• If the arbitration is binding, there is no appeal process
Pros and Cons of Mediation
• Faster and cheaper than a court trial
• The parties can talk directly to each other
• The mediator does not make a decision, but helps both sides come to a mutually agreeable outcome
• A mediation agreement is not legally enforceable
For additional information regarding Arbitration and Mediation, please visit the nar.realtor website