Commission Disputes
DISPUTE RESOLUTION PROCESS
REALTORS® have an obligation under the Code of Ethics to arbitrate commission disputes through MIBOR, rather than filing litigation to resolve the matter. If a dispute is found to be arbitrable by the MIBOR Grievance Committee, a hearing panel will award the disputed commission based on a determination of procuring cause.
However, because MIBOR has adopted a mandatory mediation policy, you will first be required to participate in a mediation session if the MIBOR Grievance Committee forwards a Request for Arbitration. Mediation is offered to assist members in resolving commission disputes. Reaching a settlement in mediation is voluntary and a decision is not imposed upon the parties. Rather, it provides the forum for members to work together toward a mutually agreeable decision.
If mediation is requested absent a request for arbitration, the time limits for requesting arbitration remain unchanged. Parties may want to consider filing an arbitration request instead which will require that the matter be mediated prior to an arbitration hearing.
Arbitration
REALTORS® agree as a condition of membership to arbitrate commission disputes through MIBOR as provided for in Article 17 of the NAR Code of Ethics, rather than filing litigation to resolve the matter. If a dispute is found to be arbitrable by the MIBOR Grievance Committee, a hearing panel will award the disputed commission based on a determination of procuring cause.
However, MIBOR has adopted a mandatory mediation policy so you will first be required to participate in a mediation session. Mediation is offered to assist members in resolving commission disputes, but coming to a settlement agreement is voluntary so a decision is not imposed upon the parties. See above for more information about mediation.
Instructions and Requirements
Please have the following prepared in order to fill out the Request for Arbitration form below:
- A written request (online or printed form) for arbitration signed by the Managing Broker as the Petitioner
- The name of the Managing Broker of the firm you are requesting arbitration with under Respondent (also include the agent’s name if they are not the Managing Broker).
- A summary of events (recommended: include copies of any pertinent or relevant documents such as the purchase agreement, listing agreement, etc.)
- Nature of the controversy
- Amount in dispute
- Filing fee payment ($100.00)
If the Complainant (originator of the arbitration) is successful and the Professional Standards Committee so determines or the dispute is resolved prior to hearing, the filing fee shall be returned to the Complainant. NOTE: A request for arbitration is not considered filed until the $100.00 filing fee is received.
Important Note Regarding Filing Arbitrations:
When arbitration occurs between two or more cooperating brokers and where the listing broker is not a party, the amount in dispute and the amount of any potential resulting award is limited to the amount paid to the respondent by the listing broker. Alternatively, the arbitration request may be brought against the listing broker who may name the first cooperating broker as a party to the arbitration.
Filing Deadline
Requests for arbitration must be filed within 180 days after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence or within 180 days of closing of the transaction, whichever is later.
Arbitration Worksheet
We highly recommend printing and using the arbitration worksheet. This worksheet is intended to assist Hearing Panels in identifying relevant issues and facts in determining questions of entitlement to disputed funds. It is intended to supplement—and not replace—a comprehensive list of questions.
Procedure
Once the arbitration response is received at MIBOR, the request is forwarded to the Chairman of the Grievance Committee for the determination of the Committee as to whether the matter is subject to arbitration.
The function of the Grievance Committee is to make only such preliminary investigation and evaluation of the request for arbitration as required to determine:
- whether the matter is properly arbitrable
- whether the proper parties are named in the request, and
- whether the arbitration is mandatory or voluntary according to the Code of Ethics and Arbitration Manual.
If the Grievance Committee finds the matter properly arbitrable, the Chairman will refer it to the Professional Standards Committee for a hearing. However, because MIBOR has adopted a mandatory mediation policy, a mediation session will be set prior to hearing. If you have any questions regarding the procedure or the requirements, please contact our Professional Services Department at 317-956-1912 Opt. 4.
Mediation
Mediation is a form of facilitated negotiation in which an impartial third party attempts to help disputing parties reach a mutually satisfactory solution to their problems. MIBOR is happy to offer our members the opportunity to use mediation to resolve conflicts, and we ensure that the process is fair, flexible, and confidential.
There are numerous benefits to choosing mediation. Because the mediation process is collaborative, not adversarial, it can help resolve issues while preserving positive relationships between all parties. Additionally, mediation often takes far less time and money than formal litigation.
The goal of a successful mediation is to have both parties come to a mutual agreement in writing upon the mediation's conclusion. Once the agreement is signed, parties are legally bound to abide by its terms.
Deadlines
Please note that the filing deadline for both mediation and arbitration is one hundred eighty (180) days after the closing of the transaction, if any, or within one hundred eighty (180) days after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later.
Initiating Mediation
Follow the link below to complete the Petition for Mediation form. Upon receipt, staff will transmit the Petition for Mediation to the party named along with the Notification of a Petition for Mediation informing the Respondent that a request has been filed. The Mediator selection process then begins.
For more information on the full mediation process, click the link below.