Arbitration hearings are often based on:
a. disputes between REALTORS® associated with the same firm.
b. disputes between buyers and sellers.
c. procuring cause disputes between buyers and REALTORS®.
d. procuring cause disputes between REALTORS® associated with different firms.
The Correct Answer and Explanation is :
The correct answer is:
d. procuring cause disputes between REALTORS® associated with different firms.
Explanation:
Arbitration hearings in the real estate industry are primarily convened to resolve disputes involving procuring cause between REALTORS® affiliated with different firms. Procuring cause refers to the actions that lead directly to the successful sale or lease of a property. These disputes commonly arise when two or more REALTORS® claim entitlement to a commission for a transaction, arguing that their efforts were the primary cause of the deal.
The National Association of REALTORS® (NAR) Code of Ethics mandates arbitration as the primary method for resolving such conflicts to promote professionalism and prevent unnecessary litigation. Arbitration hearings are held under the supervision of local REALTOR® associations, with panels comprised of impartial members trained to assess such disputes.
Key considerations in determining procuring cause include:
- Continuity of Effort: The uninterrupted actions of the REALTOR® leading to the completion of the sale.
- Buyer Relationship: The strength of the REALTOR®’s relationship with the buyer throughout the process.
- Interruption or Abandonment: Whether the REALTOR® abandoned the buyer or their efforts were interrupted by another.
Disputes between REALTORS® within the same firm (Option A) are generally handled internally by the firm’s policies. Disputes between buyers and sellers (Option B) do not fall under REALTOR® arbitration and are usually handled in court or mediation. Option C, disputes between buyers and REALTORS®, may involve ethical complaints rather than arbitration.
In conclusion, arbitration hearings focus on procuring cause disputes between REALTORS® of different firms, ensuring fair resolution without burdening the legal system and maintaining the integrity of real estate transactions.