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5665 147th St. N.
Hugo, MN 55038


Arbitration Agreement in Real Estate Purchase Agreements

I have arbitrated many cases related to allegations that a home seller has failed to disclose a material fact in the course of the sale of a home.  As part of your purchase agreement for a residential property I am 99% certain you were given the option to agree to arbitrate any disputes that arise from the transaction.  The question is, should you agree to arbitrate?

Pursuant to the standard residential real estate purchase agreement, arbitrations are governed by a set of rules imposed on the parties by a third-party arbitration administrator in Michigan.  My personal experience has been that the administrator's services are deficient.  I also am in significant disagreement with its rules and procedures.  For those reasons, I am against the arbitration agreement offered with residential purchase agreements.

But, the arbitrators utilized by the administrator generally are some of the best real estate lawyers in Minnesota.  I, along with most other real estate practitioners, know who these lawyers are and have the utmost respect for them.  

For those who want to secure the speed and efficiency of arbitration for real estate disputes, the answer is to avoid the template arbitration form and agree in a separate writing to arbitration and the basic logistics of the arbitration.  That way, you can avoid the shortcomings of the deficient administrator, still get the advantages of arbitration, and still select a decision maker you trust.

Residential real estate purchases are a huge decision.  The risks are high, the rewards are high, and while you hope a dispute never arises after closing, you need to plan for that scenario while negotiating your purchase.  I can help with that and with any disputes that do arise after closing.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.


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Dan has handled formation of international corporations through single member LLC’s looking to invoke all the corporate protections enjoyed by the most complex companies in the world.


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