What Is The Difference Between Arbitration, Mediation and Ethics?
Mediation and Arbitration are options available to Managing Broker members to address commission disputes. Complaints alleging possible violations of the 2021 Code of Ethics and Standards of Practice are available to REALTOR® members as well as the public.
Mediation is a less formal process that involves the two Managing Brokers meeting with a trained Mediator to work out a solution on how a commission dispute can be resolved. A successful Mediation is often referred to as a win-win for the parties because the parties craft their own agreement with the Mediator present to simply facilitate the conversation if it hits any bumps in the road. The Mediator is a neutral party that can see past the emotion of the deal. Mediation is binding if a resolution is reached, but if the parties cannot agree then they may proceed to Arbitration.
Arbitration is the formal process of determining who is the procuring cause and other factors of a sale. The awards are rarely “split”. More commonly there is a prevailing party and a non-prevailing party. An Arbitration Hearing is held after a Grievance Committee determines that it is a properly arbitrable issue and meets all other criteria that would send the request to a hearing.
In an Ethics proceeding, a member of the public or another REALTOR® member files a Complaint alleging a violation of one or more Articles of the Code of Ethics by a REALTOR® member. The complaint is sent to the Grievance Committee to determine if the facts taken on their face could represent a possible violation of the Code. The Grievance committee is responsible for a determination to send or not to send the complaint forward to a hearing by a panel of the Professional Standards Committee.
Additional Online Resources for Members and the Public