BBB real estate Binding Arbitration

The Better Business Bureau Serving Northern Indiana can assist buyers and sellers in resolving real estate transaction issues using Binding Arbitration processes. This process is an alternative to going to court; it is informal, user-friendly, and helps to resolve common real estate transaction disputes that may arise.

How Binding Arbitration works

Our BBB location offers Binding Arbitration for buyers and sellers involved in a real estate transaction.

In Binding Arbitration, BBB will provide a professionally trained arbitrator who will listen to both sides, weigh the evidence presented and make a decision on how to resolve the dispute that is binding on all parties.

Advantages of real estate arbitration

Lower Cost: The fees relating to arbitration can be waived if you qualify for BBB’s free arbitration services.

To qualify, your realtor must be a member of one of the following organizations:

•Upstate Alliance of REALTORS (UPSTAR)
•Northwest Indiana REALTORS Association (NIRA)
•Your realtor’s office location is BBB accredited.

Please contact the Better Business Bureau Serving Northern Indiana for more information regarding fees if your realtor does not meet the above criteria. 

Time-efficient: Depending on both parties' timeliness in completing the necessary arbitration steps and communicating with our office, arbitration cases last six to eight weeks. This timeline may be extended at the BBB's discretion.  

Additionally, the arbitration hearing lasts an hour or less, and most hearings are held virtually via teleconference. 

Informal: Our arbitration process allows for informality and the hearings are held in a relaxed, yet professional setting. While parties do not need to be legally represented in the arbitration process, they may decide that it is in their best interests to do so. Keep in mind that legal representation may assist with your case, the Indiana Alternative Dispute Resolution Addendum (ADR) states that the arbitrator may not award attorney fees. Parties are required to provide the BBB with their legal representation’s contact information should they retain counsel. 

Convenient: BBBs will try to schedule arbitration hearings at the parties' convenience.

Arbitration: If conciliation and/or mediation efforts are not successful, arbitration may be the next step. The parties state their views at an arbitration hearing, offer evidence and let an impartial arbitrator make a decision that will end the dispute.

If you have a contract that requires the parties to use BBB arbitration to resolve any disputes, you can initiate arbitration by submitting a Demand for Arbitration to BBB. If you are not contractually bound to BBB arbitration but wish to arbitrate an existing dispute, BBB will ask both parties to sign an Agreement to Arbitrate that briefly describes the specific issues involved and the scope of the arbitrator's authority in your case. This agreement sets the groundwork for the arbitration hearing.

BBB staff will arrange for an arbitrator to hear your case at an arbitration hearing.

In arbitration, the arbitrator is asked to consider all relevant factors and to make what the arbitrator considers a fair decision. While the parties in dispute are free to argue legal principles, the arbitrator does not have to follow them strictly in making a decision.

The arbitration hearing

An arbitration hearing usually takes one to two hours and is less formal than a courtroom session.

Most arbitrations take place virtually via Teams or in a conference room at BBB. Please review the BBB Rules of Real Estate Binding Arbitration for further information about a hearing's location.

At a hearing, you have the opportunity to state your case, ask and answer questions from the responding party, and summarize your position in a brief closing statement.

The arbitrator will listen to both sides and weigh the evidence presented at the hearing. After the hearing is over, the arbitrator will make a decision about the dispute. BBB will then send the decision to all parties.

Your legal options
If you participate in binding arbitration, the arbitrator's decision cannot be reviewed by a court except under very limited circumstances.
 
Additionally, if you choose to be represented at the hearing by legal counsel, the Alternative Dispute Resolution Addendum (ADR) states that the arbitrator may not award attorney fees. You must provide your legal representation's contact information to our office as soon as possible to prevent delays in your case.

Glossary of arbitration terms

Arbitration is a process in which two or more persons agree to let an impartial person or panel make a decision to resolve their dispute.

Arbitrator is the individual or panel selected to conduct an arbitration and make a decision.

Parties is in reference to the buyer and seller of the Purchase Agreement.

Originator is the party (Buyer or Seller) that initiated the arbitration case.

Respondent is the party (Buyer or Seller) that receives notice that the originator had initiated the case with BBB.

Decision is the written document in an arbitration that is signed by the arbitrator and mailed to the parties.

Purchase agreement is the document that was completed to make the offer to purchase real estate. The Purchase Agreement is the contract between the buyer and the seller.

Alternative dispute resolution addendum is another document that may have been completed during the real estate transaction process. This document from the Indiana Association of Realtors states that in the event that either party defaults in the performance of obligations in the Purchase Agreement or in the event that there is a dispute between buyer and seller with respect to their obligations arising out of the purchase and sale of the property, their dispute shall be submitted to binding arbitration, as long as it remains under the $6,000 limit. 

Starting real estate arbitration 
 
Review the Rules of Arbitration prior to filing your BBB Real Estate Arbitration case.

Ensure you have copies of the signed documents listed below prior to filing your case:

Purchase Agreement
Real Estate Sales Disclosure
Alternative Dispute Resolution Addendum

Arbitration FAQs

Q: How long does the arbitration hearing last?

A. Typically, an arbitration hearing lasts an hour or less.  

Q: Who is the arbitrator? 

A. BBB arbitrators are professionally trained community members approved by BBB, who do not necessarily have specific expertise on the issues being arbitrated, but can call upon the assistance of an expert when necessary for the case. Arbitrators swear to make an impartial decision and do not have any affiliation with either party in the dispute.   

Q: When will the arbitration be scheduled?

A. BBB will consult with the parties and the arbitrator in scheduling an arbitration hearing. While most cases require only a single hearing, additional hearings may be scheduled if the arbitrator deems it necessary. Typically, an arbitration can be scheduled within 6 weeks of receiving completed forms from the buyer and the seller. 

Q: Do I need legal representation?

A. While parties do not need to be represented by a lawyer in the arbitration process, they may decide it is in their best interest to do so. Legal representation may assist with understanding the rules of arbitration, awards a party may seek through arbitration, or how to best present their case during the hearing. 

The Alternative Dispute Resolution Addendum (ADR) states that the arbitrator may not award attorney fees.

Parties are required to provide the BBB with their legal representation's contact information should they retain counsel. 

Q: Who should attend?

A. The buying and selling parties should attend. All others, such as realtors or witnesses, are not required to attend.

Starting real estate arbitration

To proceed with filing your real estate arbitration case, please complete the BBB real estate dispute form in full: Real Estate Arbitration Cognito Form.
Notice: Because we send all documents electronically to make communication more efficient and cost-effective, we require the originator of the dispute to provide all contact information for the responding party. If you do not have the required respondent's contact information, to proceed with completing the form, you may need to refer to the following sources: social media, the Tax Assessor’s Office, the respondent’s realtor, or you may wish to contact a process server.

Additionally, all the documentation and contact information requested in the form at the link above is required. If you do not have the documentation or respondent’s contact information needed to complete the form in its entirety, you may wish to contact your realtor for assistance.
We will confirm receipt of your completed form via email. 

For further questions, please contact the Better Business Bureau Serving Northern Indiana.