ARBITRATION IS WHAT COMES NEXT WHEN MEDIATION FAILS.

It is not a good sign when you realize the home you purchased only a few months ago is literally taking on water after a period of serious rain. You discover the source of the problem is a runoff stream from your neighbor’s yard, an issue was not mentioned in the disclosure document signed by the seller at the time of purchase. You need answers now and someone to take responsibility to pay for the repairs to your home.

Arbitration requires due diligence.

When you discover a defect like this after the fact, there are actions to take with the seller to resolve the matter. In California, if you bought your home and used the California Association of Realtors’ California residential purchase agreement and joint escrow instruction document, you must start with mediation

When mediation fails to deliver a satisfactory outcome, if you signed the clause of the home purchase document requiring arbitration, it is your only option. It is critical for you to have a knowledgeable real estate attorney to defend your interests in arbitration. Depending on what clauses you signed at closing, what documents your agent filled out and what materials defects about the home the seller disclosed, you could be at a disadvantage from the start: How these documents apply to your issue needs to be carefully scrutinized by a real estate attorney

What the process of arbitration involves.

Prior to the arbitration hearing, your attorney will carefully review all your signed documents, gather  every piece of relevant information, conduct limited discovery, and then submit a brief to the arbitrator. The arbitrator is a neutral, third party—not a judge. The brief will identify the parties involved, a description of the facts, and any applicable case laws or statutes. The hearing will be private; both sides will have an opportunity to present their respective evidence and witnesses.

Disadvantages of arbitration.

To be blunt, arbitration involves cost and risk. Tricky arbitration involving “dug in” adversaries and/or contractual fine print which can cloud legal issues and lead to months of mounting expenses involving just the expense of the arbitration process. Remember you do not appear before a jury of hopefully sympathetic peers – arbitration is private and takes place in an office building, not in superior court

The arbitration outcome.

There is risk to arbitration. The decision made by the arbitrator will be binding. Therefore, both parties agree to accept the arbitrator’s decision as final—there are no appeals of the decision, except in extremely limited circumstances.

Arbitration is a process authorized by law in California.  It is essential to consult with an experienced real estate attorney before signing the purchase document of your new home.  The benefits of an arbitration decision in your favor, made with legal assistance to repairs your new home, is your goal to getting damages for your home.

Know Your Rights. Protect Yourself.