How to File an Arbitration
Please note that only a broker member of a REALTOR® Association may file an arbitration request against another broker member of a REALTOR® Association. To verify if both brokers involved are a member of a Association of REALTORS®, please contact the GAR Administrator listed below. Once confirmed, you will receive the necessary paperwork to file a Request for Arbitration.
A Request for Arbitration must be filed: 1) after the real estate transaction giving rise to the dispute has been completed; 2) within six months after the facts constituting the Arbitration matter could have been known in the exercise of reasonable diligence; 3) by the broker of a real estate agency.
Mandatory vs. Voluntary
If both brokers involved in the commission dispute are members of a Association of REALTORS®, then they must arbitrate through the Association rather than litigate the matter per Article 17 of the Code of Ethics.
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.
GAR Association Administrator
Legal Affairs Specialist