‘Insider’s game’ in real estate arbitration law

Perspective: Buyers, sellers may miss significance of court rulings

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Any active real estate litigator has suffered the frustration of an arbitration award that is flat-out wrong on the law. The decisions of California courts are full of examples of arbitration awards that were confirmed by the courts even though there was an error of law. Many frustrated real estate litigators will receive a California Supreme Court decision on the matter as a welcome change. Contracting parties in the real estate industry in California now have the option of providing for judicial review of errors of law in arbitration awards. But the catch is that contracting parties must clearly agree that legal errors are reviewable by the courts or the general rule that the merits of an arbitration award are not reviewable will prevail in any litigation over the award. The California Supreme Court expressly advised parties to arbitration agreements to explicitly and unambiguously provide for judicial review if they wish to avoid protracted and expensive litigation over...