Arbitrating Real Estate Disputes

Arbitrating real estate and leasing disputes is becoming more popular as parties seek knowledgeable decision makers and speedier, more efficient resolution of disputes. Arbitration clauses in leases for determination of rent renewal rates are common. Similarly, complex commercial agreements relating to land including joint venture and cost sharing agreements, shared facilities agreement with neighboring condominium corporations, joint venture and other syndication agreements all seem to require arbitration rather than traditional litigation for dispute resolution. Finding an experienced arbitrator with not only knowledge of the law and the practice and procedure of real estate transactions and related real property agreements but also experience in conducting an effective hearing may be a challenge to many clients and their counsel.

An expert appraisal witness once told me of his experience after spending 3 days as a witness in a trial where the issue was the value of property on a per square foot basis. For 3 days of evidence, gross floor area was referred to by its acronym, GFA. On the afternoon of the third day of evidence, the judge hearing the case asked to be reminded what GFA stood for.

An appreciation of the basic terminology and familiarity with the issues might therefore be a factor in selecting a decision maker. Understanding context, how a deal works, what the terms of an agreement of purchase and sale mean and how they are implemented, understanding appraisal evidence and reports, how documents get registered on title, what a mortgagee’s statutory and contractual rights are, lease negotiations and lease provisions, the role of mortgage commitments, and land use planning, for example would expedite the dispute resolution process and establish focus on the issues in an expeditious way. ​

Among other topics, I have conducted arbitrations related to:

  • lease renewal rights and the timeliness of the exercise of such rights
  • Valuation of rental properties for division of property in a family law dispute
  • ground lease renewal rates
  • commercial lease renewal rates
  • industrial lease renewal rates
  • default rights under a mortgage
  • claim under the Tarion warranty
  • rights under an agreement of purchase and sale
  • understanding appraisal evidence and reports