Arbitration is an alternative dispute resolution program that is offered as a service to REALTOR® members which provides a forum for resolving business disputes in lieu of litigation. Arbitrations are completely separate from ethics hearings. Arbitrations are held when both agents acted legally and ethically, but a legitimate dispute still arose between the agents. It usually involves compensation disputes between brokers in two different firms. Arbitration is not about sanctioning agents for bad behavior - it exists to resolve business disputes involving REALTORS® in the event that the REALTORS® have been unable or unwilling to resolve the dispute themselves.
Mandatory vs. Voluntary Arbitration
REALTORS® are not obligated to use their Local Board/Association’s arbitration services to resolve disputes. REALTORS® may resolve disputes themselves or submit the dispute to other venues including courts. However, if one party who is eligible to use the association's Arbitration services submits the claim to their local board, then the other party may be obligated to participate in arbitration and abide by the arbitrators' decision if the case is classified as mandatory.
Mandatory vs. Voluntary Arbitration (NAR)