What happens when REALTORS® in a dispute decide not to mediate according to the NAR Code of Ethics?
When mediation is bypassed, the NAR Code of Ethics requires disputed matters between REALTORS® to proceed to arbitration, where an arbitrator's decision is binding.
Mediation vs. Arbitration
Mediation: Mediation is a voluntary and informal process in which a neutral third party, known as a mediator, helps facilitate communication and negotiation between the parties involved in a dispute. The goal of mediation is to reach a mutually acceptable agreement without the need for a formal decision to be imposed.
Arbitration: On the other hand, arbitration is a more formal process where an arbitrator, who is usually an experienced professional in the field, makes a decision after reviewing the evidence presented by both sides. Unlike mediation, the decision made by the arbitrator is binding and legally enforceable.
NAR Code of Ethics on Dispute Resolution
The National Association of Realtors® (NAR) has established a Code of Ethics that governs the professional behavior of its members, including procedures for resolving disputes between REALTORS®. According to the NAR Code of Ethics, if neither REALTOR® in a dispute wishes to mediate, the next step is arbitration.
Arbitration Process: When a dispute is submitted to arbitration, an arbitrator is appointed to review the evidence and make a decision. The arbitrator's decision is final and binding on both parties, meaning they must abide by the outcome determined by the arbitrator.
Importance of Code of Ethics: Following the NAR Code of Ethics is crucial for maintaining the integrity and professionalism of the real estate industry. By outlining clear guidelines for dispute resolution, the Code ensures that conflicts between REALTORS® are handled in a fair and efficient manner.
In conclusion, when REALTORS® in a dispute choose not to mediate, the NAR Code of Ethics mandates that the matter proceed to arbitration. This process involves the appointment of an arbitrator who will make a final and binding decision based on the evidence presented. Adhering to the Code of Ethics is essential for upholding ethical standards and promoting trust within the real estate community.