REAL ESTATE SALES
(that arise under Oregon realtors' printed forms)

Realtor associations throughout Oregon have collectively designed a printed form of a real estate sale agreement to facilitate sales of residential property and other real property. These form agreements include provisions that require the parties to resolve any future disputes by mediation or arbitration, rather than by formal court litigation. This section explains how those mediation and arbitration procedures work.

MEDIATION: Settlement Negotiation Assisted by Mediator. In mediation, the parties attempt to settle their dispute with the assistance of a neutral third person if direct negotiation between the parties has not resolved the dispute. The neutral person (the mediator) is skilled in helping people settle their own disputes. Any party can terminate the mediation process at any time for any reason (with or without good cause). The mediator does not take sides and does not render a decision. The dispute is resolved only if the parties themselves reach a settlement agreement. The mediator helps each party (in joint and private sessions) to share emotions and different view points in a constructive fashion, to focus on the underlying interests and goals of each party, to develop and refine settlement options, and to use objective standards. The mediation process will settle many disputes privately and quickly.

ARBITRATION: A Binding Decision Rendered by an Arbitrator.

In arbitration, the parties choose an impartial third person to decide the dispute. The parties are bound by the arbitrator's decision after a hearing in which the parties have an opportunity to be heard. The arbitration procedure takes the place of formal court litigation. If the mediation process has not resulted in a settlement, or if one of the parties refuses to take part in a mediation, any party can complete and file a simple claim form with Arbitration Service of Portland. The parties then choose an arbitrator from a list provided by Arbitration Service of Portland (ASP). A convenient hearing date is promptly set so that each side can present its case (with or without an attorney). The hearing (which is not open to the public) usually takes place in a conference room and is conducted in a dignified but informal manner. After listening to the testimony and considering the evidence, the arbitrator decides the dispute. The arbitrator's decision on the facts and the law is final. The arbitrator's written decision is called an "award." The law permits either party to file the arbitration award with the court clerk for confirmation as a judgment of the court. The claimant (the party who filed the claim form to begin the arbitration process) pays the arbitration filing fee. The parties share in paying the arbitrator's fee. Compared with court litigation, arbitration is said to have the advantages of speed, economy, convenience, privacy, finality and in having the dispute decided by a person with expertise and experience.

(Note: Often a claimant starts a mediation and an arbitration simultaneously. If that happens, both procedures move forward, but the mediation takes place well in advance of an arbitration hearing. If the mediation results in a settlement, the arbitration process is terminated. If mediation does not produce a settlement, the arbitration continues to move forward and the parties have not lost any time in having the matter finally decided at an arbitration hearing.)

MEDIATION: Questions and Answers

Q:    How do I start the mediation process?

A:    By completing a form and mailing it to Arbitration Service of Portland (ASP) with a non-refundable mediation filing fee of $200.00. (Call ASP to receive a "Request for Mediation" form or click to Request for Mediation.)

Q:    What happens next?

A:    ASP immediately writes all parties acknowledging your request for mediation. The other party has ten days to refuse or to respond affirmatively by mailing ASP a non-refundable $200.00 mediation acceptance fee.

Q:    What if the other party is not willing to mediate?

A:    The sale agreement conditions the right to obtain attorney fees on a party's willingness to mediate. If the other party refuses or does not respond by the ten day deadline (despite of ASP's attempt to telephone and encourage participation), ASP will confirm such rejection or non-response by a letter to all parties, and you may initiate an arbitration (if you have not already done so).

Q:    What happens if the other party accepts mediation?

A:    ASP tells all parties by letter that mediation has been accepted and identifies the mediator. The mediator then arranges a conference call to set the time and place of the mediation.

Q:    How long does the mediation process take?

A:    After the mediator is appointed, the mediation usually occurs within 30 days (depending on the schedules of the parties and the mediator).

Q:    Who pays the mediator?

A:    The parties jointly share in paying the compensation of the mediator, who will be a retired judge or a real estate lawyer. The mediator charges at his/her regular hourly rate (but not more than $250/hour).

Q:    How does the mediation terminate?

A:    When the mediator completes and mails to the parties a form stating that:
  1. The mediation did not take place because a party failed to participate; or
  2. The parties could not achieve a settlement; or
  3. Mediation succeeded (and enclosing a copy of the settlement prepared by the mediator or the attorney for one of the parties).
Q:    Am I required to have an attorney to represent me in mediation?

A:    No, but consider this: your ability to persuade the other side will often depend upon the strength of your legal position. Whether you decide to hire an attorney to assist you at the mediation may depend on how many dollars are at risk. At the very least, most people see the wisdom of consulting with a real estate lawyer for an opinion on the legal issues and their chances of prevailing.

ARBITRATION: Questions and Answers

Q:    Do I have to arbitrate?

A:    Nearly evey printed form for the sale of residential real estate requires all of the parties (and the real estate brokers and agents that were involved) to arbitrate all disputes arising out of the transaction. The form is used throughout Oregon and requires arbitration of all such disputes if there exists a "professional arbitration company which provides such service to the county where the property is located." (Arbitration Service of Portland (ASP) is a professional arbitration company that provides arbitration services to every county in Oregon.) The current form designates ASP as the arbitration organization that may be used. Therefore, all non-settled disputes must be arbitrated (unless it is a "small claim" less than $10,000)). Oregon and federal law expressly authorize the use of private arbitration in lieu of court litigation and courts routinely enforce agreements to arbitrate.

Q:    How do I begin an arbitration?

A:    By filing with ASP a Statement of Claim form (which ASP will send you upon request, or click to Statement of Claim) and by paying a non-refundable filing fee.

Q:    How much is the filing fee?

A:   

Up to $100,000:
$400 for a two-sided dispute
plus
$100 for each additional party
Over $100,000:
$600 for a two-sided dispute
plus
$200 for each additional party


If the amount in controversy does not exceed $100,000, the dispute will be decided by a sole arbitrator. If the claim exceeds $100,000, then the dispute is decided by a panel of three arbitrators, unless the parties agree to use a sole arbitrator. For example, in a dispute between buyer and seller involving less than $100,000.01, whoever files the claim pays a filing fee of $400.00, and the dispute will be decided by a sole arbitrator.

Q:    What happens when an arbitration claim is filed?

A:    ASP immediately gives written notice to all parties that you have initiated the arbitration, encloses a list of proposed arbitrators, and advises each party how to participate in the selection of the arbitrator(s).

Q:    What if the other party does not respond or participate in the arbitration?

A:    Unlike mediation, the arbitration process will move forward with or without the other side's participation. Even if the other side does not appear, the arbitrator's written award will be binding on all parties (because the parties committed themselves to the arbitration process when they signed the real estate agreement).

Q:    How is the hearing date set?

A:    The parties are sent calendars, which they send to the arbitrator after striking out dates they cannot appear due to a scheduled vacation, business trip, surgery, or some other valid reason. The arbitrator will select the first date that will accommodate all concerned.

Q:    Who pays the arbitrator(s)?

A:    The parties jointly share in paying the regular hourly compensation of the arbitrator (who will be a retired judge or real estate lawyer), but not to exceed $250 per hour.

Q:    How long does the arbitration process take?

A:    Most arbitrations conclude within three months from the date the claim is filed.

Q:    Are parties required to hire attorneys?

A:    No. Each party separately decides whether to be represented by an attorney. One party might have an attorney, while the other side chooses to not use a lawyer. The more money that is at stake, the more likely that parties will hire attorneys because they recognize that:
  1. The arbitrator(s) will decide factual disputes and legal issues based on legal principles;

  2. A lawyer is trained to analyze facts and to understand and interpret the law;

  3. A lawyer is trained to properly present evidence, examine witnesses, understand arbitration procedures, and argue a client's position.



Additional Questions and Answers

Q:    Am I required to mediate or arbitrate a small claim?

A:    The current state-wide realtors' form provides a small claims court exception, and those small claims are to be resolved in a small claims court (and not by mediation or arbitration) if the claim is within the small claims jurisdiction amount (currently, $10,000.00).

Q:    What is Arbitration Service of Portland?

A:    ASP is a neutral, independent, and professional arbitration company that provides mediation and arbitration services to every county in Oregon.

Q:    What does ASP do?

A:    ASP acts as a procedural umpire and provides the disputants with the security of an all-encompassing set of rules so that the process moves forward efficiently and fairly. Created in 1985, ASP has assembled high quality mediators and arbitrators and is the only Oregon company that administers mediations and arbitrations throughout Oregon.

Q:    Is ASP connected with any real estate group?

A:    No. The Oregon Association of Realtors (OAR) has formally endorsed ASP as its preferred provider of mediation and arbitration services, but ASP is not allied with OAR or any other realtor association, business, industry, or profession. ASP has been designated in mediation and arbitration clauses in printed forms used throughout Oregon by banks, title companies, motor vehicle dealers, builders, and other businesses.

Q:    What if I have other questions?

A:    You may call ASP (toll free) with procedural questions, but ASP cannot give legal advice. You should call your lawyer with questions about your legal rights and duties.

Arbitration Service
of Portland, Inc.


620 SW Fifth Avenue
Suite 1010
Portland, OR 97204

www.arbserve.com
Portland Area Tel:
(503) 226-3109

Outside Portland Area:
1-800-423-1216

fax: (503) 226-3072

 

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