Understanding Arbitration

The information listed below will give you an insight on filing an arbitration request, as well as a FAQ section.  To access further information from the National Association of REALTORS® regarding arbitration, CLICK HERE

In the event of monetary disputes between REALTORS® arising out of their relationship as REALTORS®, the GSCBOR provides Arbitration to settle the dispute.  The Arbitration process is a mandatory requirement of membership for REALTORS® of different firms.

A majority of Arbitration requests are to determine the procuring cause of a sale or lease.  Although the process can also be used to determine the amount of a commission when there is no dispute over procuring cause.  Procuring Cause is defined as the uninterrupted series of events that leads to a successful transaction.  Many factors go into determinining procuring cause and it is important to understand that the decision does not hinge on just one factor.  A Request  and Agreement to Arbitrate, Form A-1, must be initiated by the principal broker of an office and must be filed within 180 days after the closing of the transaction, if any, or within 180 days after the facts constituting the matter could have been known in the exercise of reasonable diligence, whichever is later.

Instructions for Filing an Arbitration Request

Your Request and Agreement to Arbitrate, Form A-1, needs be completed and signed by the principal broker, (sales agent may join in on complaint also).  Complaint must be in writing with any supporting documentation or chronological summary of the events that occurred. The form, letter of complaint, supporting documents and a deposit in the amount of $500 payable to GSCBOR, must then be sent to the Board office.

When the Request and Agreement to Arbitrate is received by the GSCBOR, mediation is  offered to both the complainant and respondent prior to it being reviewed by the Grievance Committee.  What is Mediation?  Mediation is a form of facilitated negotiation in which an impartial third party attempts to help disputing parties attain a mutually satisfactory solution to their problems.  Participation in mediation is strictly voluntary on the part of both the complainant and respondent.   Should either party decline the mediation process, the  case is sent to the Grievance Committee for a review. This committee’s responsibility is to review the case and determine if the case should be referred to the Professional Standards Committee for a hearing or dismissed.

If the case is referred to the Professional Standards for  an arbitration  hearing, the respondent is required to respond to the request within 15 days and also post a $500 deposit. (The prevailing party at a hearing will receive their deposit back.)  A Professional Standards hearing panel will be appointed to hear the case and determine how the commission dispute should be resolved.  Both parties will have ample opportunity to present their case.  Arbitration is binding.

If referred to hearing, this process usually takes about 3-4 months since we must allow reasonable time for responses, for action by the Grievance Committee, scheduling, etc.

NOTE – Many difficulties between REALTORS® result from misunderstanding, miscommunication, or lack of adequate communication.  If you have a situation or problem with a REALTOR®, you may want to speak with them or with a principal broker in the firm.  Open, constructive discussion often resolves questions or differences, eliminating the need for further action.

Click here for Form #A-1

 Factors Considered in Procuring Cause

FAQs – Arbitration 

Q: Is there a statute of limitations for filing arbitration requests?
A: Yes. 180 days from the time that you could have known there was a dispute or property settles.

Q: I’d like to file a complaint, but am worried about confidentiality.
A: All arbitrations are kept strictly confidential. Only staff involved in the administration of cases, along with the assigned members from the Grievance Committee and Professional Standards Hearing Panel, have access to arbitration cases.

Q: Is there a special form I should use when filing a request for arbitration?
A: File an arbitration request using Request and Agreement to Arbitrate A-1.  Form A-1 should include signature of broker, letter of complaint in writing, any supporting documentation and a $500 filing fee deposit.

Q: Where do I submit the arbitration request?
A: If your request for arbitration is with another member of GSCBOR, submit the request to the GS Board office.  If your request for arbitration is with a member of another Board/Association, it should be filed at the Board/Association where that member holds their primary membership.  (This is considered an Interboard)

Q: Is there a cost to request arbitration?
A: Yes. Both parties submit a $500 filing fee deposit.  Should a hearing occur, the prevailing party’s fee is returned, and the remainder is used to cover the cost of the hearing. If the case does not go to hearing, filing fees are returned, minus an administrative fee from both parties.

Q: How do I know whether to file an ethics complaint or request arbitration?
A: Ethics complaints are filed about behavior; arbitration is requested when there is a commission or monetary dispute

Q: Can I file an arbitration request and an ethics complaint at the same time?
A: Yes. Both case types can be filed at the same time. However, if the cases go to a Professional Standards hearing, arbitration hearings are always held first.

Q: Will the person who I’m filing against be notified of my complaint?
A:  Yes. When your complaint is submitted to GSCBOR, a courtesy copy of the complaint will be sent to the respondent.  If the Grievance Committee moves the complaint to PS for a hearing, a response from the respondent is then required.

Q: Who governs the rules that GSCBOR follows in handling arbitrations?
A: GSCBOR is required to follow the rules of the Code of Ethics and Arbitration Manual of the National Association of REALTORS®.

Q: How long does the process take?
A: If arbitrations go to a Professional Standards hearing, the process may take 3-4 months. This is because of the time that must be allowed for responses, proper notification, scheduling, etc.  If the request is considered “interboard”, the process may take longer.

Q: Is arbitration binding?
A: Yes. Members agree to abide by the Code of Ethics, which includes binding arbitration.