Arbitration is the resolution of a real estate business dispute by the decision of an arbitration hearing panel. It may take place between REALTOR® principals of different firms or between a REALTOR® principal and another party. Frequently, the dispute involves entitlement to compensation for real estate services. Arbitration may also involve REALTORS® other than principals or REALTOR-ASSOCIATES®, provided that the REALTOR® principals with whom they are affiliated join in the dispute.
Arbitration can take place between REALTORS® and REALTOR-ASSOCIATES® from the same firm if all parties voluntarily agree to be bound by the decision. Or, arbitration may take place between a REALTOR® principal and a customer, provided both voluntarily agree to it in writing. It may take place on a voluntary basis between a REALTOR® principal and non-member broker.
Boards/associations are not required to provide arbitration facilities in the last three circumstances, although many do.
WHO IS ENTITLED TO ARBITRATION?
REALTORS® or non-resident member principals of different firms.
REALTORS® or non-resident members other than principals or REALTOR-ASSOCIATES® in different firms, provided the REALTOR® or non-resident principals with whom they are affiliated join in.
A client of a REALTOR® or non-resident member principal provided the client agrees in writing to arbitrate the dispute arising out of their agency relationship and the matter is found to be properly arbitrable.
WHO IS ENTITLED TO REQUEST VOLUNTARY ARBITRATION
(IF PROVIDED BY THE BOARD/ ASSOCIATION)?
REALTORS®, REALTOR-ASSOCIATES® and non-resident members who are or were affiliated with the same firm, if each party voluntarily agrees in writing and if the board/association finds the dispute properly arbitrable.
A REALTOR® or non-resident member principal may request arbitration with a non-member broker, providing that each party agrees in writing to arbitration and providing the board/association finds the matter properly arbitrable.
A REALTOR® or non-resident member principal and a customer provided that a written contractual relationship has been created between the customer and a client, the customer and the REALTOR® or nonresident member agrees in writing to arbitrate the dispute and the matter is found to be properly arbitrable.
MUST THE BOARD/ASSOCIATION ARBITRATE ALL DISPUTES?
No, the board association may decline to arbitrate if its’ Grievance Committee determines that (1) the dispute is not properly arbitrable, or (2) the amount involved is too small or too large, or (3) the legal complexity of the dispute is too great.
The filing of litigation and refusal to withdraw from it by the REALTORS® in a arbitrable matter constitutes a refusal to arbitrate. (Adopted 2/86) in accordance with Article 17, Standard of Practice 17-1 of the NAR Code of Ethics).
Sometimes a local board/association is unable to provide an impartial or unbiased arbitration or to provide a hearing by knowledgeable peers, as is the case of members engaged in special fields. In such cases, the association can request that the state association arbitrate the matter. If the state cannot, members are released from their obligation to arbitrate.
HOW TO FILE AN ARBITRATION REQUEST
Detailed information can be found in section 47,Manner of Invoking Arbitration, of the Code of Ethics and Arbitration Manual of NAR, or in local board/association bylaw provisions that are the counterpart of Section 47 of the NAR Manual. You may read this at the association office, or the association may supply you with a copy of the appropriate section.
You can also obtain information on filing an arbitration request by calling the Professional Standards Staff of the Greater Las Vegas Association of REALTORS®. Requests must always be filed in writing, signed, and accompanied by the required deposit within one hundred eighty (180) days after the closing of the transaction, if any, or within one hundred eighty (180) days after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later.
Parties to a hearing are entitled to all information provided to or received from any other party. A party to the hearing is entitled to challenge any potential panel member for cause. A party is entitled to legal counsel, to call witnesses, to advance notice of witnesses to be called by the other party, to testify and introduce evidence, to cross-examine opposing parties and their witnesses, and to receive an impartial hearing.
REALTORS® other than principals are entitled to at least one arbitrator from the membership classifications of REALTORS® other than principals or REALTOR® Real estate specialists are entitled to a hearing before a panel of members who are knowledgeable in the relevant field.
An arbitration award is made in writing, signed by as least a majority of arbitrators and states only the amount of the award, if any. A signed award is valid and binding, absent any appeal on the basis of an alleged deprivation of due process.
The Association, at its option, may call for either paying the award within ten (10) days or escrowing the award amount in a special association escrow account, if the non-prevailing party plans to initiate legal challenge of it. Failure to pay the award or make the required deposit may result in disciplinary action.
REQUEST FOR PROCEDURAL REVIEW BY DIRECTORS
The arbitration award is not subject to review or appeal, except with respect to alleged irregularities that may have deprived the party of due process. If there is no request for procedural review, the award is final after a specified time.
JUDICIAL ENFORCEMENT OF ARBITRATION AWARDS
If the non-prevailing party does not promptly pay an award, the association will inform the party(s) that the NATIONAL ASSOCIATION OF REALTORS® also has a legal defense fund to which a REALTOR® may apply for assistance, with grants made on the merits of each such application.