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Mediation, arbitration and real estate disputes: A primer

Real estate is full of thorny issues that can raise disagreements. Even when a solid contract is in place, parties can still face contentious disputes. Contract disputes are not something that any party involved in a real estate transaction wants. Nonetheless, they can arise at any stage in the transaction.

Some contract disputes are resolved through litigation. Litigation can be a long and expensive process that can bring a homeowner, contractor or other party negative attention in the press. As an alternative, some people attempt to resolve contract disputes through mediation or arbitration.

Understanding mediation and arbitration

Mediation and arbitration are both forms of alternative dispute resolution (ADR). This means that they are used as alternatives to lawsuits when two or more sides are locked in a dispute. In mediation, a neutral mediator—often a business attorney—works with all sides to find a resolution. Arbitration is when the parties submit their dispute to an impartial arbitrator for a final decision.

The pros and cons

Arbitration and mediation have their upsides and downsides when compared to litigation. Every contract dispute is different, and you should carefully consider which option is suitable for your company.


  • Arbitration and mediation are private rather than public.
  • They tend to be less expensive than going to court.
  • They usually resolve a dispute faster than lawsuits.


  • It can be hard to appeal arbitration decisions, even if the arbitrator made a mistake.
  • One party may have more experience with ADR than the other.
  • There is no judge or jury, which can work against your favor.

The legal implications

You should carefully consider whether to resolve your real estate contract dispute through mediation, arbitration or litigation. Before selecting a method, it is important be aware of each option’s legal implications. The method by which you choose to resolve your real-estate contract dispute could have a major impact on the outcome.

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Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

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