In our last post, we discussed how real estate disputes don’t have to end up in court. Real estate mediation can be a great alternative, and it can help you craft a mutually-beneficial solution. However, reaching agreement through a mediation isn’t always possible. So, let’s explore another option: real estate arbitration in Grand Rapids.
What is Real Estate Arbitration?
Real estate arbitration is a dispute resolution method outside of the court system. The case is not resolved by a judge or jury. Instead, both parties submit their information to an arbitrator, who reviews the case, listens to both sides, and makes a decision.
This process is less formal than court, but more rigid than real estate mediation. Since more than a million disputes go to arbitration each year, there are several large companies that offer arbitration services. Both sides can also agree to an independent arbitrator if they choose.
Typically, the parties will agree on a neutral space, such as a conference room, to hold the arbitration. The ‘rules’ of the proceeding may be determined by a contract or by mutual agreement, so the specifics can vary quite a bit.
What are some of the key elements?
Mandatory or Voluntary?
Real estate arbitration may be mandatory or voluntary. Many contracts include an arbitration clause, which requires the parties to resolve their disputes through this method. Typically, they give up their right to sue in court, or be a part of a larger lawsuit.
Other real estate arbitrations are voluntary. Since it can be a faster, less expensive alternative to court, many people will decide to try their case in front of an arbitrator.
Binding or Nonbinding?
In some cases, the real estate arbitration is the end of the road. Once both parties agree to abide by a binding decision, the ruling is final. It may not be overruled or overturned in court, except in extreme cases (such as fraud or misuse of power).
This can be a good route when both sides want to avoid court and get faster results.
However, real estate arbitration can also be nonbinding. In this case, either party can reject the ruling, and proceed to court instead.
Will lawyers be involved?
Possibly. In some real estate arbitration cases, lawyers advocate for their clients. This is especially common when there is a lot of money involved, or one of the parties is a corporation.
Generally, lawyers are not required for the proceedings, and you are free to present your own case.
How will the arbitrator decide?
Unlike a judge, an arbitrator makes their decision based on their opinions of what is fair and just. They are not bound to make their decision based on case law or past precedents.
In most cases, they will submit a written decision to both parties. This document reduces confusion, and should clearly lay out the reasons for the ruling.
While timelines vary, most arbitrators work to have their decisions ready in a few days.
Remember, not all conflicts need to end in a nasty lawsuit. Strongly consider all of your options for dispute resolution. You may save yourself time, money, and headache!