We are often asked for advice with regards to commission claims and claims in relation to defects to properties.

The court route is long and tedious, and it can take up to three years for a case to be finalised. Agents often walk away from legitimate claims for commission because they feel they will spend their time and money more effectively in selling more property.

All of this can be avoided by stipulating in the mandate agreement that, in the event of a dispute with regard to the payment of commission, the agency may elect to refer the matter for mediation, and if the dispute remains unresolved, arbitration.

Mediation usually precedes arbitration and an independent third party is tasked with mediating, or negotiating, a settlement of the dispute. If that then fails, the matter is referred to arbitration.

Arbitration is essentially exactly the same as a court case, except that the case is heard by an arbitrator and not a judge or magistrate, and the procedures that are followed are less formal.

An arbitration can easily be finalised within a period of three or four months, and the owner of a property would be legally bound to such an agreement. An arbitrator is appointed jointly by the parties, and if they are unable to agree on the nomination of such arbitrator, the agreement can provide that for example, the Institute of Estate Agents appoint an attorney or advocate with at least 10 years experience to act as an arbitrator. The provisions of the Arbitration Act will usually determine the manner in which such arbitration is conducted.

An order made by the arbitrator is binding on the parties and can be made an order of court. An arbitration award is also not appealable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.