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A brief history of settling real estate disputes outside of court

On Behalf of | Jan 29, 2020 | Real Estate Litigation

Not every real estate disagreement has to make its way to a courtroom. There are times when alternative options may provide benefits to both parties. It may help to preserve privacy and protect the reputation of both parties involved. The resolution process is also usually less drawn out and more cost effective. 

Cornell Law School describes this as alternative dispute resolution. It notes that sometimes public courts still get involved to review the final decision. However, very rarely do these entities decide to overthrow agreements made through ADR. Here are some of the most common options available: 

  • Conciliation 
  • Arbitration 
  • Neutral evaluation 
  • Mediation 

While parties often enter into ADRs voluntarily, there are instances when it is mandatory to seek resolutions outside the courtroom first. Some states have begun to put rules for this in place due to the long wait times for disputes as cases pile up in local courts. 

Inc. magazine reports that this is a stark contrast to the earlier days of attempting ADR solutions. Local courts often resisted these efforts because they felt that business owners were infringing on their jurisdiction. These attitudes began to change around the 1980s as new case laws emerged that favored provisions for arbitration. 

By 1998, the Alternative Dispute Resolution Act came into play. This made changes on a federal level in the court systems as to how disputes were handled. The changes affected not just real estate disputes but other business contract disputes as well. Since then, almost every state has made additions to the ADR law to fine-tune the process within their respective jurisdictions.