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Seller Representation

Arbitration Article Update

July 2010

By: Stephen J. Nash
Nash Law Firm

Each month after the newsletter goes out, I receive a number of e-mails asking questions or challenging something that was stated in an article.  I would encourage anyone who has a question or concern to feel free to e-mail me, even if you just want to tell me that I'm dead wrong about a certain issue.  Normally, I just respond to the individual who asks the question or states a concern.  The article in last months newsletter; however, produced a much higher than normal and many people asked the same questions or expressed the same concern so I thought I would address some of the questions and concerns in this months newsletter.

Don't the Rules of Professional Responsibility Require That I Agree to Arbitration?

The article was not addressing whether you as a real estate professional should or are required to agree to arbitration.  The focus of the article was on whether a buyer or seller should agree to arbitration.  Even if the Rules of Professional Responsibility did require that you as a real estate agent or broker agree to arbitration, they do not apply to the buyer or seller.  

Ultimately, the buyer or seller must decide if arbitration is in their best interest.   

Arbitration worked well for me, so what's the problem?

I never asserted that every arbitration result is a poor decision but one good result does not mean that that one case is representative of all arbitrations.  Some of the examples of provided to me of arbitrations that worked were over 10 years old.  Unfortunately, many changes have taken place over the years that have effected arbitration.  In my experience, the arbitrators today are not as qualified as they were in the past.  Quite often the arbitrator has no legal knowledge and no practical residential real estate experience.  

Finally, the article was more about the arbitration process itself.  If arbitration makes it easier to bring a claim, why would a seller agree to arbitration when he will never get the benefit of the ease bringing a claim but by agreeing to arbitration he has just made it easier for the buyer to bring a claim against him?  If arbitration requires less proof to prove a claim, why would a seller see this as an advantage?  Why would the seller agree to arbitration that does not require the arbitrator to follow the law when that law is the sellers protection?