Required: Mediation Before Arbitration
According to Section 44 of the National Association of REALTORS® Code of Ethics and Arbitration Manual, an arbitrable matter exists when there is a monetary dispute between two managing brokers of two separate offices as it relates to co-op commissions. By becoming and remaining a member of the Chicago Association of REALTORS®, every member agrees to submit to arbitration by the Board’s facilities as defined in Article 17 of the Code of Ethics. Keep in mind that C.A.R. requires mandatory mediation prior to arbitration. Therefore, once our Grievance Committee has determined that an arbitrable matter exists, a mediation conference will then be scheduled. If the conference is not successful, an arbitration hearing will then be scheduled. As we have realized a 90% success rate for mediations, we hope that we can avoid arbitration!
What do I need to include to file for Arbitration?
- So that our Grievance Committee can properly review your complaint, please ensure the following:
- A timeline of events leading up to the closing are included
- Dates of events are included so that Grievance can determine if the request is filed on time
- All appropriate parties are named
- The Managing Broker is filing and signing the complaint
What will happen to my case next?
Your case will go to the Grievance Committee who acts as a grand jury and reviews each case to determine if it should go to a hearing. You will need to supply enough information for the Grievance Committee to determine if a co-op (between two brokerages) dispute exists and or to determine if there was unethical conduct on the part of the REALTOR® you are complaining about.
Mandatory Mediation Information
The C.A.R. Board of Directors has now adopted the National Association of REALTORS® mandatory mediation requirement which requires that all parties who file for mandatory arbitration attempt to resolve their dispute through mediation prior to going to arbitration. As we have seen an over 90% success rate in resolving commission disputes through mediation, we are extremely excited for this new change.
Mediation allows for an informal conversation and an opportunity for each side to understand the other parties’ position. Often an agreement is reached which is acceptable to both sides. If an agreement cannot be reached, an arbitration hearing will be scheduled. Learn more .
File for Arbitration
The Request and Agreement to Arbitrate form, is a form that will assist members in filing for arbitration where they believe that they are the procuring cause. It is important to know the aspects of the form, what you are agreeing to and filing it correctly so that the dispute may be swiftly resolved.
Please use this guide to assist you in understanding and accurately filing for arbitration.
- Each member when joining an Association of REALTORS® agrees that they will use the Association’s dispute resolution services (arbitration and mediation) instead of taking the matter to court. The signature on the form indicates acknowledgment of this paragraph.
- Each member of the Association is a member in good standing unless otherwise noted by the Association. The signature on the form indicates acknowledgment of this paragraph.
- Paragraph 3 allows the complainant to indicate which REALTOR®/company they are filing their arbitration request AGAINST. This is where the complainant would list the REALTOR® Principal or Broker that they are filing the arbitration against (i.e. the listing broker if they are holding the money, the other co-operating broker if they were paid). A name or company name is required.
- Paragraph 4 is where the complainant indicates the amount in dispute, or the amount that they are seeking through arbitration. NOTE: The Association arbitrates business disputes and is not a court of law, therefore, the filing fee or attorney fees may not be added to this amount. It is simply the amount the complainant believes that they were to be paid. Additionally, the complainant may indicate who is holding the commission, if known.
- The Association follows the most recent version of the National Association of REALTORS® Code of Ethics and Arbitration Manual. The signature on the form indicates acknowledgment of this paragraph as well as compliance with any decision rendered.
- A filing fee of $500.00 is due at the time of filing. An arbitration request without a filing fee is not considered filed. The Hearing Panel assigned to any arbitration hearing will determine if the filing fees of the parties are to be returned. If the dispute is dismissed or settled between the parties via mediation or otherwise, the filing fee will be refunded.
- Each party has the right to be represented by legal counsel; notice is required to the Association and the other parties fifteen (15) days prior to the hearing. If there is a failure to notify, the hearing may be postponed. The signature on the form indicates acknowledgment of this paragraph. Each party has the right to call a witness(es) to testify on their behalf; notice is required to the Association and the other parties fifteen (15) days prior to the hearing. If there is a failure to notify, the hearing may be postponed. The Association is not responsible for any party’s witness(es). The signature on the form indicates acknowledgment of this paragraph. If there are REALTOR® Non-Principals or Agents in the complainant’s office that are affiliated with the dispute who have a financial interest in the outcome of the arbitration hearing, their names may be listed in this section. At times it is necessary to allow REALTOR® Non-Principals or Agents to tell the story to the Hearing Panel, as they have first-hand knowledge of the transaction.
- The complainant must present truthful information to be considered by the Grievance Committee. Arbitration should be filed 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. The signature on the form indicates acknowledgment of this paragraph.
- Each party has the right to appeal the decision made by the Grievance Committee. This appeal must be received within twenty (20) days of the decision rendered. No new information may be submitted. The signature on the form indicates acknowledgment of this paragraph.
- Indicate if the circumstances involved in the dispute are also subject to civil litigation. NOTE: If civil litigation is also pending regarding the dispute, more information may be requested.
- If the arbitration request is filed against another cooperating broker (where the listing broker is not named) the amount of any award is limited to the amount that the respondent received at closing. The signature on the form indicates acknowledgment of this paragraph.
- The property address related to the dispute is required.
- The closing date or date that the lease was executed is required (see #8).
- The signature on the form indicates acknowledgment of this paragraph.
The form is signed by the REALTOR® Principal or Broker as the complainant. Since payment is made broker to broker, a mandatory arbitration is between brokers. NOTE: REALTOR® Non-Principals or Agents DO NOT sign the form.