Binding Arbitration
A binding arbitration is a way to solve disputes without going to court.
An alternative to the more expensive and lengthy legal procedures, a binding arbitration is basically the process of two parties agreeing (binding themselves) to the decision of an assigned impartial third party that will act as the judge of their dispute.
When a real estate dispute is to be solved by a binding arbitration, this impartial arbitrator – or a panel of arbitrators - must listen to the arguments of the two parties before issuing its judgment; which both parties must comply with. The ruling of a binding arbitration rarely gets reversed later in the court of law.
The whole binding arbitration process starts with a binding agreement in which both parties select the arbitrator (or panel of arbitrators) and the procedures or rules that will govern the judging of possible future grievances. After that, the binding parts can engage in a time-period called “discovery”, where both parties produce factual evidence to protect themselves in the case of a future dispute. That is: they can invoke documentation from the opposing party and even require witness statements regarding specific subjects to be recorded in front of the arbitrator. This is done and recorded as part of the binding arbitration as a way to outline everyone’s view of the case prior to any possible problem arising. With this material serving as evidence, should something happen, all parties can guide themselves toward a fair resolution.
Although most binding arbitrations are voluntary by nature, there are some states - Minnesota, New York and New Jersey, for example - that have adopted obligatory arbitrations on specific cases - mostly dealing with insurance - as a way to clear up litigation workload from courtrooms and speed the traditional legal justice system as a whole.
In many ways, binding arbitrations trumps litigation. It’s more efficient by being faster and less expensive, and has more way room to decide over things that lack legal jurisprudence.
Although once signed you’re basically on your own, it’s a good idea to have a real estate agent and a real estate lawyer to advise you when drafting the binding agreement. Find the best one for you in The OFFICIAL Real Estate Agent Directory®.
Popular Real Estate Terms
Act of forcing an individual or business to do something against their will. It is a legitimate defense in court to reserve the effect of the compelled act. ...
That part of a roof which projects beyond the sides of the building. The eaves keep rain overflow of the sides of a building structure and seal the roof rafters. ...
Broadly speaking, a commission is a remuneration a person receives after acting on someone else’s behalf.In the real estate world, you’ll usually hear the term “sales ...
Tax credit aimed at encouraging the conservation of natural resources, as well as the development of alternative resource. ...
A triangular shaped end of a building where a double sloped roof meets at the top of the triangle. A gable begins at the eaves of a roof and terminates at the roof ridge. ...
Services provide to a parcel of land public utility companies, such as gas, water, electricity. ...
(1) Flooring in a structure. (2) Open structure with flooring erected outside a main building. A deck can have different levels with direct access to the main structure. It is usually ...
To secure a listing by a real estate agent for a certain parcel of property. For example, a real estate broker wishes to list as many properties a possible to built an inventory of future ...
Mortgage for residential property. ...
Have a question or comment?
We're here to help.