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Introduction
The following questions and answers are intended to respond to the most commonly asked questions regarding the C.A.R. Interboard Arbitration process. The content provided in this document is not meant to substitute for the California Interboard Arbitration Rules and in the event any inconsistency appears to exist between the information provided in this document and the California Interboard Arbitration Rules, the latter shall control.
Q 1. What is the basis for C.A.R. Interboard Arbitration?
A When an individual joins a local board or association of REALTORS®, he or she signs a membership application, which contains an agreement to arbitrate disputes with other REALTORS® according to the board's or association's bylaws. This includes an agreement to use C.A.R.'s arbitration facilities to arbitrate disputes with REALTORS® who belong to another local board or association.
Q 2. Why does C.A.R. process Interboard Arbitrations?
A Arbitration is a form of dispute resolution used by organized real estate to resolve disputes between its members. Most arbitrations between REALTORS® involve commission disputes and are conducted by local associations. Occasionally, disputes arise between REALTORS® who belong to different associations. Such arbitrations are referred to as "Interboard Arbitration." To avoid creating an appearance of bias, C.A.R. processes Interboard Arbitrations as opposed to a local association where one of the REALTORS® holds membership.
Q 3. Are the rules for C.A.R. Interboard Arbitration different than those for local association arbitration?
A No. The rules used to conduct C.A.R. Interboard Arbitration are substantially the same as those used by local associations.
Q 4. Who are the parties to an Interboard Arbitration?
A The parties to C.A.R. Interboard Arbitration are members of C.A.R. who do not hold membership in a common board or association.
Q 5. Is mediation available as an alternative to C.A.R. Interboard Arbitration?
A Yes, if all parties agree. When a party files a C.A.R. Interboard Arbitration complaint, he/she is asked whether or not they wish to use mediation to resolve the dispute. Similarly, when the complaint is sent to the respondent(s), the respondent(s) is asked whether he/she wishes to use mediation to resolve the dispute. If all complainants and respondents agree to mediation, C.A.R. will schedule a mediation conference with a C.A.R. Interboard Arbitration mediator.
Q 6. Does C.A.R. encourage mediation over arbitration? If so, why?
A Yes. Mediation is a process whereby a mediator works with the parties to facilitate a mutually acceptable resolution of the dispute. In contrast, arbitration is a process whereby the parties submit their dispute to the arbitrator(s) who makes the decision to the arbitrator(s) who makes the decision for them. Since mediation allows the parties to better control the outcome of their dispute, C.A.R. encourages mediation prior to arbitration.
Q 7. What happens if the dispute is settled through mediation?
A If the parties reach settlement of their dispute through mediation, a stipulated arbitration award is made, the arbitration complaint is dismissed, and the filing fee, less two-hundred & fifty ($250) dollars, is returned to the complainant. In addition, the parties are released from any further obligation to arbitrate the dispute through C.A.R.
Q 8. What happens if the dispute is withdrawn?
A If the parties withdraw the Complainant, the arbitration complaint is dismissed, and the filing fee, less two-hundred & fifty ($250) dollars, is returned to the complainant. In addition, the parties are released from any further obligation to arbitrate the dispute through C.A.R.
Q 9. What if the dispute is not settled through mediation?
A Though mediation is highly successful, in the event the parties are unable to resolve their dispute through mediation, C.A.R. will continue processing the arbitration complaint and schedule a hearing.
Q 10. What is the time frame to file a C.A.R. Interboard Arbitration complaint?
A In order for C.A.R. to process an Interboard Arbitration complaint, the complaint must be filed with C.A.R. within one-hundred and eighty (180) calendar days after the close of the transaction, if any, or after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later. In most cases, the relevant date to determine whether a C.A.R. Interboard Arbitration complaint is filed timely is the date the escrow closed in the underlying transaction.
Q 11. Is there a fee to file a C.A.R. Interboard Arbitration complaint?
A Yes. The current filing fee for C.A.R. Interboard Arbitration is five hundred ($500) dollars. C.A.R. Interboard Arbitration complaints cannot be processed without receipt of the filing fee.
Q 12. Can I recover my filing fee if I prevail in the arbitration?
A It depends. All parties to a C.A.R. Interboard Arbitration may request the hearing tribunal to award them certain costs related to the arbitration, including of the filing fee. However, whether a party will be awarded costs is at the discretion of the hearing tribunal.
Q 13. Is the filing fee refundable if the complaint is later withdrawn?
A Yes. If the complaint is withdrawn, C.A.R. will refund the filing fee less two hundred and fifty dollars ($250). After a hearing occurs, the entire filing fee is non-refundable.
Q 14. Can I file a complaint and place it on "hold?"?
A No. Once a complaint is filed, C.A.R. will process the complaint according to the California Interboard Arbitration Rules.
Q 15. Once I file my complaint, what happens next?
A Once a complaint is properly filed with C.A.R., C.A.R. notifies the named respondent(s) by sending a copy of the complaint and all supporting documentation submitted with the complaint. The respondent(s) has fifteen (15) calendar days in which to submit a written response, if they so choose. If a written response is filed with C.A.R., C.A.R. will mail a copy to the complainant(s).
At the same time the complaint is mailed to the respondent(s), all parties will be mailed list of potential arbitrators, a form to challenge any arbitrators from the list, and a form asking the parties for their availability for a hearing. If the parties have any challenges to potential arbitrators or are not available on any days during the time frame anticipated for scheduling the hearing, they must complete the appropriate forms and return them to C.A.R. After the time frame to submit challenges to arbitrators and to give notice of availability for hearing has lapsed, C.A.R. selects a panel of arbitrators, called the "hearing tribunal," and schedules a hearing for the dispute.
Q 16. Can a respondent(s) claim I owe him or her money?
A Yes, if the respondent's claim is based on the underlying facts and circumstances of the complaint. This action is called a counterclaim. If a counterclaim is filed, the complainant(s) has fifteen (15) days to respond to the counterclaim. The original complaint and counterclaim will be heard together by the same hearing tribunal.
IV. Named PartiesQ17. Who should be named as a respondent(s)?
A The California Interboard Arbitration Rules do not require the complainant to name any specific party or entity as a respondent(s). Also, C.A.R. does not advise parties who should be named as respondent(s). Determining whom to name as a respondent(s) is the responsibility of the complainant. If a complainant is unsure whom to name as a respondent(s), he/she may want to consult an attorney.
Q 18. Who should be named as a complainant?
A The California Interboard Arbitration Rules require that if anyone other than a responsible broker files a complaint in a dispute involving that person's responsible broker, the responsible broker for that individual at the time of the dispute must also join as a complainant. This rule exists because most disputes in Interboard Arbitration are commission disputes and commissions flow through real estate brokers.
Q 19. If I am a salesperson, can I file an Interboard Arbitration complaint without my responsible broker?
A No. Since most disputes in Interboard Arbitration are commission disputes, the dispute will involve that salesperson's responsible broker at the time the dispute occurred. Therefore, in order to file a complaint, the salesperson's responsible broker must also join as a complainant and sign the complaint.
Q 20. What if my responsible broker at the time the dispute occurred does not want to join me as a complainant?
A Since the California Interboard Arbitration Rules require the responsible broker to join, C.A.R. cannot process the complaint if the responsible broker chooses not to join as a complainant.
Q 21. What happens if my responsible broker will join as a complainant, but does not want to attend the hearing?
A While the California Interboard Arbitration Rules require a responsible broker to join as a complainant, they do not require the responsible broker to attend the hearing. However, failure to attend may adversely affect the hearing tribunal's decision and any award rendered will still be binding on the responsible broker despite his/her failure to attend.
Q 22. Will C.A.R. process my complaint if one or more of the persons names as respondents share a common association membership with me?
A Generally, no. C.A.R. only has jurisdiction to process arbitrations between members of different boards or associations. C.A.R. does not have jurisdiction to process an arbitration complaint with a named respondent who shares a common Association membership with the complainant. The jurisdiction for this dispute would be the local association where they share the common association membership.
Having said the above, in some situations to avoid dual arbitration hearings over the same dispute, C.A.R. will process an arbitration complaint even where one of the named respondents shares a common association membership with one of the complainants. However, in order for C.A.R. to do this, all parties must agree to this arrangement.
Q 23. What should I do if I feel I have been inappropriately named as a party in a C.A.R. Interboard Arbitration?
A C.A.R. only processes Interboard Arbitration and does not make substantive decisions on who is a proper party. As long as the named party meets the basic jurisdictional requirement of Interboard Arbitration, i.e., he/she is a member of C.A.R., all decisions regarding whether the named party is "proper" are decided by the hearing tribunal.
Q 24. How long does it take for a complaint to get to a hearing?
A Usually complaints are heard within three (3) months after they are filed with C.A.R. However, depending on a variety of factors, such as whether continuances are requested and granted and the availability of the parties and arbitrators, it may take longer for a complaint to be heard.
Q 25. Where is the arbitration hearing held?
A C.A.R. Interboard Arbitration hearings are heard at local associations where none of the parties hold membership. C.A.R. selects associations for the hearings that are conveniently located to the parties and the hearing tribunal members.
Q 26. Who are the arbitrators that hear and decide the arbitration?
A The arbitrators who hear and decide C.A.R. Interboard Arbitrations are REALTORS® who serve, or have served, as arbitrators at their local association and have qualified to serve as C.A.R. Interboard Arbitration Arbitrators.
Q 27. How are the arbitrators selected?
A Prior to the hearing, a list of potential arbitrators is sent to the parties. Each party has the opportunity to challenge any potential arbitrator on the list. Challenges must be made within fourteen (14) days from the date the list of potential arbitrators was mailed. From the remaining unchallenged arbitrators on the list, C.A.R. selects three to serve on the hearing tribunal who do not share a common association membership with any of the parties.
Q 28. How is the hearing conducted?
A The hearing process is similar to that of an arbitration hearing at a local association of REALTORS®. Each party first makes opening statements. After opening statements, first the complainant and then the respondent present their cases. Each party may call witnesses and the other parties have the right to cross-examine any witness called by the other party. After the conclusion of the parties' cases, each party makes a closing statement to the hearing tribunal. Then, the hearing panel dismisses the parties from the room, goes into deliberation and renders an award based on the evidence and testimony presented at the hearing and arguments made by the parties. The award is then mailed by C.A.R. to the parties.
VI. Continuance RequestsQ 29. Can a party request a continuance of a scheduled hearing date ?
A Yes. A party may request a continuance but such request must be in writing, for cause, and include the appropriate filing fee.
Q 30. What does "for cause" mean?
A Continuance requests are generally granted if the request is made "for cause." Usually, such occurrences as sudden illness, accident, death of a family member, improper notice of hearing, improper notice of other party having legal counsel at the hearing, and inability to review evidence submitted at the hearing are considered "for cause." However, excuses such as inconvenience, vacation, business meetings, or sporting events are usually not sufficient cause to grant a continuance request.
Q 31. Who considers continuance requests?
A If the continuance request is made more than five (5) business days prior to the scheduled hearing date, C.A.R. considers the request. Otherwise, the hearing tribunal considers all continuance requests.
Q 32. Can I request a continuance during the hearing?
A Yes. All parties may request a continuance during the hearing For example, situations where a party may wish to request a continuance are improper notice of other party having legal counsel at the hearing and inability to review evidence submitted at the hearing. The hearing tribunal will decide continuance requests made at the hearing.
Q 33. Is there a fee to request a continuance?
A A party's first continuance request is free, however, all additional continuance requests must be submitted with the appropriate fee. Currently, the continuance fee is one hundred ($100) dollars.
Q 34. Can a party be represented by legal counsel at the hearing?
A Yes. Fundamental to due process is the right to be represented by legal counsel. Any party to a C.A.R. Interboard Arbitration may be represented by legal counsel at any time during the arbitration process. If a party does retain legal counsel to represent them at the hearing, he/she is required to provide written notification to C.A.R., all other parties and the hearing tribunal at least ten (10) calendar days prior to the hearing. If a party fails to comply with this notice requirement, the hearing tribunal may grant a continuance and the party will be responsible for the continuance fee and other costs associated with the continuance.
Q 35. Can someone other than legal counsel represent a party at a hearing?
A No. However, a party may authorize a nonlegal representative to be present at the hearing on his/her behalf, e.g., office manager, authorized agent, etc. Any purported authorization allowing a nonlegal representative to be present at the hearing on behalf of a party must be in writing, noticed to C.A.R., all parties, and the hearing tribunal and must indicate that the nonlegal representative has the authority to bind the party to the arbitration award rendered.
Q 36. Can a family friend or relative attend the hearing with me?
A No. Only named parties and their authorized representatives are allowed to be present during the hearing. Witnesses can also be present at the hearing, but only while testifying.
Q 37. Are subpoenas available for C.A.R. Interboard Arbitration?
A Yes. However, subpoenas for C.A.R. Interboard Arbitration can only be used to require the attendance of witnesses or the production of books, records, documents and other evidence at the hearing. They are not available for prehearing discovery, such as depositions. C.A.R. provides the parties with subpoenas upon request. Each party is responsible for properly completing and serving the subpoena at his/her own expense.
IX. Legal Complexity and Magnitude of Amount Involved
Q 38. Can C.A.R. or the hearing tribunal dismiss my complaint?
A Yes. C.A.R. or the hearing tribunal may dismiss a complaint if it is determined that the matter is too legally complex or the amount in controversy is too great for them to hear. If C.A.R. or the hearing tribunal makes this decision, the parties are released from their obligation to arbitrate and may seek any other remedies available to resolve their dispute.
Q 39. Can the decision of the hearing tribunal be appealed or reviewed by C.A.R.?
A Yes, but only on very limited grounds. Under the California Interboard Arbitration Rules, any party may request a "Director's Review" of an award but the basis for such review is limited to allegations that a lack of due process occurred during the hearing process, e.g., a party was given improper notice of the hearing, not allowed to present all relevant evidence and testimony at the hearing, etc. The review is not a rehearing and should not be used in an attempt to have the merits of the dispute reconsidered.
Q 40. Is there a fee to request a Director's Review?
A Yes. To file a request for review, the current filing fee is one-thousand ($1,000) dollars. The filing fee is refundable if a new hearing is ordered, but nonrefundable if the hearing tribunal's award is confirmed.
Q 41. Can new evidence be presented at the Director's Review?
A No. As mentioned above, the grounds for a review are limited to allegations of lack of due process. A party should not attempt to submit new evidence in an attempt to have the merits of the arbitration award reconsidered.
Q 42. Can I be represented by legal counsel at the Director's Review hearing?
A Yes. If a party does elect to be represented by legal counsel at the Director's Review hearing, they are required to provide written notification to C.A.R., all other parties, and the Director's Review tribunal at least fourteen (14) calendar days prior to the review hearing.
Q 43. How is the request for a Director's Review processed?
A A request for a Director's Review is processed similarly to how the complaint was processed. Once the request is properly filed with C.A.R., the other parties are noticed and given an opportunity to respond. All parties are also given lists of potential review panelists, a form to challenge such potential panelists, and a form to indicate their availability for a review hearing. Once the time frame for submitting these forms has lapsed, C.A.R. selects panelists not challenged to serve on the Director's Review tribunal and schedules a hearing. At the hearing, the parties make arguments to the Director's Review tribunal regarding whether or not there was a lack of due process.
Q 44. Can continuances be requested prior to or during a Director's Review hearing?
A Yes.
Q 45. Can the Director's Review tribunal change or issue a different award?
A No. The review panel has only two options in reviewing the hearing: (i) adopt the recommendation of the hearing tribunal; or (ii) remand for a new hearing. The review panel cannot modify or change the award.
Q 46. If the review tribunal confirms the award, are there any other appeal or review rights outside of C.A.R.?
A Yes, but they are also very limited. Under California law, a court may vacate an arbitration award on certain narrow grounds. If a party wishes to pursue a court action to vacate the decision of the hearing tribunal, he/she is advised to seek the advice of an attorney as to the appropriateness of such an action.
Q 47. What should I do if the other party fails to abide by the award?
A If a party fails to abide by an arbitration award, the party wishing to enforce the award can petition a court to confirm the award. Under California law, a party seeking confirmation of an arbitration award has four years after the date of service of a signed copy of the award upon the respondent in which to do this. A party seeking confirmation of an arbitration award may recover his/her attorney's fees as part of the confirmation proceeding.
Once an arbitration award is confirmed, other legal procedures are available to collect or enforce the award. For example, the award can be reduced to a lien on the assets of the party refusing to pay the award and foreclosed upon. Since the legal procedures involved in enforcing an award are detailed, a party may wish to seek the advice and assistance of an attorney.
XII. Where to Get Further Information
Q 48. How can I get further information about C.A.R. Interboard Arbitration?
A To get further information on C.A.R. Interboard Arbitration or to file an Interboard Arbitration complaint with C.A.R., please contact Monique McCord or Yolanda Gillette C.A.R. Interboard Arbitration Administrators, at (213) 739-8354 or (213) 739-8279.
Copyright© 2012 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reprint and use this material for non-commercial purposes provided credit is given to the C.A.R. Legal Department. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.
