If you are dealing with a real estate dispute, mediation or arbitration might be in your future. So, what are these two processes, and how do they differ?

Mediation and arbitration are both alternative dispute resolution methods that can be used to deal with various real estate disputes. Mediation is relatively informal compared to arbitration. With a neutral third party to facilitate, mediation involves negotiations and discussions between those involved in the dispute. Arbitration also involves a third party, the arbitrator. This individual will act similarly to a judge and consider arguments and evidence from both sides. The arbitrator will then come to a decision which may be legally binding. This aspect of arbitration can make it somewhat risky. While they differ, arbitration and mediation can keep real estate disputes out of the courtroom, allowing matters to be resolved faster.

To schedule a confidential and free review of your case from the real estate transactions and disputes lawyers at the Heyman Law Firm, call us now at (410) 305-9287.

How Do Mediation and Arbitration in Real Estate Disputes Differ?

Disputes regarding security deposits or modifications to be made to a property during escrow are not uncommon during real estate transactions. In such circumstances, the involved parties might enter into mediation or arbitration. As a buyer or seller, it is important to understand the differences between these alternative dispute resolution methods and how they can help you reach your ultimate end goal.

Mediation

Mediation is typically the first step to follow a real estate dispute after informal negotiations. During mediation, parties will be joined by a neutral third party, a mediator. This individual will not make a decision regarding the dispute itself but facilitate discussions between involved parties. The reason for this is to settle the matter without the need for court proceedings. Discussions and negotiations will be had, contracts and agreements will be reviewed, and, hopefully, a resolution will be met.

Engaging in mediation can save considerable time and money for buyers, sellers, or anyone else involved in a real estate dispute. Mediation might be written into a real estate agreement prior to a dispute arising so that both parties are required to engage in some sort of negotiation before possibly elevating the matter. While the mediator helps to facilitate a resolution, the ultimate agreement is made between the two parties and often involves concessions on both sides. Because mediation is informal, you might be able to walk away at any time. When mediation is successful, all parties tend to walk away having had some of their needs or wants met.

Arbitration

Arbitration is more similar to litigation. When real estate disputes rise to the level of arbitration, a third party, an arbitrator, will get involved. Both parties should agree to an arbitrator. This person acts similarly to a judge, though the case will not be carried out in a court setting. Both parties can present their evidence regarding their position to an arbitrator at this time. Often, an arbitrator’s final decision is legally binding, meaning that it will be the end of the matter entirely. Because of this, entering into arbitration when not required can be somewhat of a risk.

Arbitration is more adversarial than mediation. Furthermore, neither party can force the other to enter into arbitration unless arbitration was specifically written into a contract before the dispute arose. Arbitration does not involve negotiations as mediation does. In arbitration, decisions are made based on facts, not the feelings or needs of involved parties.

Similarities Between Mediation and Arbitration in Real Estate Disputes

While there are considerable differences between mediation and arbitration in real estate disputes, there are still several similarities between these two alternative dispute resolution methods. For example, either route can allow you to avoid litigation. Furthermore, both mediation and arbitration can keep you out of the courtroom.

Going to court over a real estate dispute can be a time-consuming and sometimes unnecessary process. Depending on the situation, mediation or arbitration can help you avoid a lengthy trial and allow you to settle a dispute without using significant resources or taking too much time.

Additionally, both mediation and arbitration involve a neutral third party. This can allow for greater insight into a dispute and let both parties see one another’s perspective without the added pressure of a courtroom or trial. Furthermore, arbitration and mediation are often much more private than trials.

Should You Enter Mediation or Arbitration Over a Real Estate Dispute?

If you are involved in a real estate dispute, it is important to learn whether or not mediation or arbitration is worth it compared to your chances at trial.

Often, real estate disputes do not have to go to trial. Furthermore, if alternative dispute resolution methods are written into your real estate contract, you might have to engage in mediation or arbitration before ever going to court.

Before you enter into arbitration, our real estate transactions and disputes lawyers will explain the implications of a binding decision by an arbitrator. Depending on the situation, willfully entering into arbitration might be ill-advised. In such situations, it might benefit you to go to trial and share your case with a judge and jury. This will allow for a more formal analysis of the facts of your case and may lead to a more favorable judgment for you.

While alternative dispute resolution methods such as mediation and arbitration can help involved parties avoid litigation, that might not always be in your best interest. It is important to carefully consider all aspects of a case before deciding whether to engage in mediation or arbitration or go to court over a real estate dispute.

Call Our Lawyers About Your Real Estate Dispute Today

Call (410) 305-9287 to get a free case assessment from the real estate transactions and disputes lawyers at the Heyman Law Firm.