How to File an Arbitration
Only brokers can file a request for arbitration. We will need the following information from the broker in order to begin the process:
- Name of the two brokers
- Name and address of the two brokerages
- Name of any agents with a financial interest in the transaction
- Date of Settlement/Lease signing
- Address of the property
- Amount of commission in dispute
Once we receive this information, we will then create the paperwork necessary to file the claim. When the requesting broker submits the completed paperwork, accompanied by a $500 check and supporting documentation, we will forward the paperwork to the responding broker.
Once we receive the responding broker's response, the case will be forwarded to the Grievance Committee for initial screening.
Mandatory vs. Voluntary
REALTORS® are not obligated to use arbitration services to resolve disputes. REALTORS® may resolve disputes themselves or submit the dispute to other venues including courts. However, if one party who is eligible to use the association's Arbitration services submits the claim, then the other party may be obligated to participate in arbitration and abide by the arbitrators' decision if the case is classified as mandatory.
In arbitrable cases, the Arbitration Committee convenes a panel of impartial, unbiased, and experienced REALTORS® to consider your case. Designed to ensure that the due process rights of all parties are protected, claimants and respondents may be represented by attorneys, call witnesses, present evidence, and challenge the qualifications of the panel members selected to hear the case.
The parties also enjoy a limited right to request a procedural review or file a legal challenge to the decision if they believe that there were procedural deficiencies or other irregularities that constitutes a deprivation of due process. However, this is not an appeal on the decision itself, only the procedures used in conducting the hearing.
In addition to arbitration services, we also offer Mediation as an alternative for resolving commission or other business disputes. Mediation has become a popular alternative to arbitration because it is quicker, easier and provides the parties with more control over the final resolution of the dispute.
Mediation allows members to negotiate a mutually agreeable solution by providing an impartial third party to facilitate discussion between the parties. It is a process that is generally faster and less expensive than arbitration. Mediation also allows members to avoid the confrontational and adversarial nature of an arbitration hearing. The goal is to foster dialog and reach an understanding that allows the parties to find a middle ground to resolve the conflict.
Mediation vs. Arbitration
In arbitration, the parties are generally more concerned with testifying to the panel than talking through their dispute. Arbitration awards are generally an "all or nothing" proposition where one party is awarded money and the other is left with nothing. Feedback indicates that REALTORS® emerge from successful mediations with a higher level of satisfaction with the result than REALTORS® who participate in arbitration. Therefore, the Member Services Department urges you to consider mediation as an alternative when filing an arbitration request. If mediation is unable to resolve the dispute, the parties can proceed to an arbitration hearing without delay.
Mediation is optional before the case gets forwarded to the Grievance Committee for initial screening. However, once the Grievance Committee has reviewed the case and if it determines that the case is arbitrable and a mandatory arbitration, then the parties will have to attempt to resolve their business dispute via mediation before they can go to an arbitration hearing.
Mediate, don't arbitrate!
Watch NAR's one-minute video, which provides a brief summary of the benefits of mediation.
Membership & Professional Standards Director