Commercial real estate disputes are not uncommon — and disagreements over contracts, landlord tenant matters, and construction can quickly escalate. Importantly, court isn’t the only option available to resolve these types of conflicts. In many cases, arbitration is an efficient and cost-effective alternative to litigation that can be used to resolve a real estate dispute.
What is Arbitration?
Arbitration is a form of alternative dispute resolution where a neutral third party called an arbitrator helps to resolve a conflict between two or more parties outside of court. While it is conducted like a “mini trial,” the hearings are private — unlike litigation in a public courtroom. Arbitration is also less formal than litigation and the procedures can be tailored to the needs of the parties. The process is often faster than going to court and results in a binding decision.
Is it Better to Use Arbitration or Litigation to Resolve Real Estate Disputes?
There are many advantages to using arbitration to resolve a real estate dispute. In fact, a real estate contract could even contain a mandatory arbitration clause. In these cases, arbitration may not only be a good option — it might be the only option.
Here are some benefits of arbitrating a commercial real estate dispute, rather than going to court:
- Speed – In many real estate disputes, time is of the essence. If the conflict is delaying building, leasing, refinancing, or selling a property, arbitration can help the parties reach a resolution faster than they would in litigation, which can sometimes take years. With arbitration, the parties can schedule hearings sooner, rather than wait for the court to schedule them, and receive a decision more quickly.
- Confidentiality – Real estate disputes often involve sensitive financial information and property details that can be kept confidential in arbitration proceedings, rather than become part of the public court record. The parties involved may also want to maintain privacy to help safeguard their reputations, especially if they are high profile commercial landlords or developers.
- Cost-effectiveness — With arbitration, the parties can avoid lengthy and drawn-out court proceedings. They can also prevent substantial attorney fees and high court costs from accumulating. In addition, arbitration usually costs less than litigation due to limitations on discovery in arbitration forums.
- Control — The parties have more control over the resolution of the dispute when using arbitration. In contrast with litigation, they can select an arbitrator who has extensive knowledge of commercial real estate matters and tailor the rules and procedures to the needs of the case.
Contact an Experienced New York Commercial Real Estate Attorney
If you are a party to a commercial real estate dispute, a real estate attorney can evaluate your case and advise you whether arbitration is right for your situation. Offering knowledgeable counsel to commercial landlords, tenants, real estate developers, investors, and other parties involved in real estate transactions, Barnes & Barnes, P.C. provides representation for a wide range of real estate matters across New York. Contact us at (516) 673-0674 to schedule a consultation.
