Alternative Dispute Resolution: Avoiding Eviction Court

by |

Dealing with an eviction that makes it all the way to the courtroom is one of the most difficult, expensive, and arbitrary situations for a property manager—thus the need for alternative dispute resolution services. Eviction disputes are considered essentially minor nuisances by most judges, and so the judge will want to absorb only the most relevant details and make a decision almost offhandedly—they rarely last more than 20 minutes if it makes it to the courtroom. (There’s nothing like being saddled with thousands of dollars in back rent just because the judge was in a crap mood that morning.)

But what forms of alternative dispute resolution are there? Actually, there are a few— mediation and binding arbitration being the most common.

Mediation vs. Binding Arbitration

When a dispute is mediated, that means both sides sit down with a professional mediator and discuss the problem in a (theoretically) level-headed fashion. After discussing the matter together, the mediator will then talk to each group individually to get to the ‘bottom’ of any issues that seem to be incomplete or talked-around in the group setting. Mediators may also engage in investigations of their own if they believe either party to be deceitful.

Then, the parties gather in the same room again, and the mediator will guide a second discussion, this time with the aim of getting the two sides to agree on a resolution that will leave everyone equally satisfied. If such a resolution is reached, a contract enforcing that resolution is written up, signed, and everyone goes on their way.

When a dispute is arbitrated, at the beginning of the process, an Arbitration Agreement is written describing the precise nature of the problem and having both parties agree to follow the dictates of an Arbitrator or panel of Arbitrators. From that point, the process looks very much like a courtroom: both sides present their story, the evidence to support it, and the Arbitrator(s) will decide how the problem should be most fairly resolved. In the end, the Arbitrators will create a plan, and present it to a judge, who will (almost always) immediately issue a Court Order that the plan be followed.

Non-Binding Arbitration is similar, but without the Court Order, making it essentially a gentleman’s agreement.

The key difference between mediation and arbitration is that in mediation, the final contract is reached only when both parties agree that it is acceptable. In arbitration, the final contract is decided by a third party, but because the Arbitrator generally spends more time getting to know the story and each side, it is often noticeably less…arbitrary…than that of a harried District Court judge.

Related: 5 Simple Reasons to Use Arbitration Instead of Lawyers

How to Invoke an Alternative Dispute Resolution

Some states allow landlords to include clauses in their Lease Agreements that essentially say “Tenant agrees to use XYZ mediation/arbitration service to resolve any disputes not relating to habitability.” Michigan is not one of them—if you live here or in any state that forbids such clauses, your best bet is also the simplest: ask the tenant. Many tenants can’t afford legal fees, and alternative dispute resolution can potentially save them just as much money as it saves you.

What alternative resolutions have you used to avoid the eviction process? Share your thoughts below.

About Author

Drew Sygit

While in the mortgage business, Drew rose to a VP position at the first broker he worked for and then started his own company. In the pursuit of excellence, he obtained several mortgage designations and joined mortgage & several affiliate association Boards. He also did WebX presentations and public speaking. It was during this time he started personally investing in single-family rentals, leading him to also start Royal Rose Property Management with two partners. He also joined the Board of a local real estate investors association, eventually becoming its President. The real estate crash led to an offer from the banking industry to manage a Michigan bank’s failed bank assets they acquired from the FDIC. The bank acquired four failed banks from the FDIC, increasing from $100M in assets to over $2B while he was there. After that, he took over as President of Royal Rose Property Management. Today, he speaks at national property management conventions and does WebX presentations.


    • Drew Sygit

      @JOHN – Going to court doesn’t always work in all areas.

      For instance, in many areas of the actual city of Detroit, if we start an eviction process it can take 2 months to get a Writ of Eviction, then we have to spend $400 or so for a dumpster, and another $400-600 for bailiffs to remove tenant possessions from the property. Or instead of having to hire bailiffs, the tenants often abandon the property, but help themselves to the copper plumbing, furnace & hot water heater on their way out or do other vandalism.

      Add up the missing rents, repairs and costs, and it is often cheaper to seek alternatives.

  1. Jerry W.

    Hey Drew,
    I hate to disagree with you but of course I will. I think going to arbitration or or mediation instead of eviction is crazy. Perhaps in California where you might take 6 to 9 months to evict it would be better. Most courts have eviction on fast track. In my state it takes usually less than 2 weeks to file and get an eviction ordered. The cost for an attorney would normally be less than $1,000 and often less than $500. The cost of getting a mediator or an arbitrator in my area would be at least a $1,000 and likely more. Plus you have to get the tenant to agree and find a time the arbitrator can meet with both of you. If the tenant feels sick or has to work it might take a month and likely more to do the hearing. Then if the mediator cannot get the parties to agree then its over and you have paid all that money and wasted all that time and still have to file an eviction. Even in arbitration if the arbitrator rules for you and says move out guess what? His order has no legal effect. Now you have to file in court to enforce your contract of arbitration and wait to get a hearing. This hearing date will be harder to get and be set slower than an eviction. You will also have to pay again to go to court. I cannot imagine hiring an arbitrator or mediator would be cost effective for anything less than a $10K case, but I don’t think I have ever seen one used for less than a $100K case. Have you ever used alternative dispute resolution in an eviction case?

  2. Drew Sygit

    @JERRY: no apologies necessary for disagreeing! You bring up excellent issues.

    Our point was to think outside the “norm” and explore other options. Of course, these options have to make financial sense:)

    • Drew Sygit

      @BIG BOB: Yikes! Thanks for sharing.

      We don’t have an issue with contingency attorneys in Michigan, but part of our court fees do fund Legal Aide free attorneys for tenants that meet financial criteria. The first thing they try to do is have the tenants request a jury trial – which is legal extortion as it can take 4-6 months to schedule!

  3. Chris T.

    Interesting article in regards to “thinking outside the box”. If a landlord has to spend $$ and time for a mediator or an arbitrator, it might be easier to offer cash for keys instead. (Although I really hate this idea as well)

    We had our first eviction last year (totally our own fault for not screening properly and giving people a 2nd chance). I had a few deadlines / payment plans with the tenants. Of course they blew past most of them. So much so that that I couldn’t trust their word anymore. (and why I didn’t offer them cash for keys)

    If I had to pay more $$ for a mediator / arbitrator, it will just drag out the process longer. Plus if someone do not keep their previous commitments, they will probably not follow the new contract or plan drawn up by the mediator or arbitrator. Eventually leading back to the eviction path.

    But learning about a new tool to use is always helpful in our RE journey. Thanks for the info Drew! Cheers !

  4. In Florida BEWARE of the contigent fee attorney who represents the tenant “free.” Anything at all with your notice etc can result in thousands out of your pocket for the attorney….and being forced to re-file the same suit, Make sure your lease…and your paperwork is ironclad….checked and double checked, or pay the price. Happened to me……but ONCE was enough.

  5. Kevin Izquierdo

    “your best bet is also the simplest: ask the tenant. Many tenants can’t afford legal fees, and alternative dispute resolution can potentially save them just as much money as it saves you.”

    Motto I live by K.I.S.S.
    Keep It Simple Stupid 🙂

    Very well written article, short sweet and to the point
    Thanks 🙂

    • Drew Sygit

      @KEVIN IZQUIERDO: that usually works with most tenants – except low demographic tenants who tend to either ignore problems hoping they go away or react irrationally to hide their ignorance.

      Thanks for commenting!

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here