Parties seek agreement
A neutral mediator helps the parties explore settlement. The mediator does not impose a decision, and the dispute ends only if the parties reach an agreement.
Paragraph 19 · Addendum BB
If mediation fails, the dispute may leave the courthouse and move into binding arbitration.
When both buyer and seller initial Addendum BB, contract disputes unresolved through Paragraph 16(b) mediation are decided through binding arbitration under the selected rules.
What Addendum BB does
It changes the forum for resolving a dispute after mediation fails.
The purchase contract already contains a dispute-resolution process. Addendum BB does not erase the mediation step. Instead, it directs an unresolved dispute into binding arbitration after the Paragraph 16(b) mediation process does not produce a resolution.
Because arbitration replaces ordinary courtroom litigation for covered disputes, both buyer and seller should understand the procedural and strategic consequences before initialing the provision.
The dispute path
Unresolved dispute → mediation → binding arbitration.
The rider creates a sequence, not an immediate shortcut directly to an arbitrator.
16(b)Mediation comes before arbitration
Arbitrator decides
If mediation does not resolve the dispute, Addendum BB sends the covered matter to a private decision-maker whose award is binding, subject to applicable law.
Six arbitration mechanics
Mutual initials activate a different dispute-resolution system.
Both parties initial
The arbitration provision applies only when both buyer and seller initial the BB section.
A contract Dispute exists
The covered controversy must fall within the contract’s defined dispute provisions.
Mediation occurs first
The parties follow Paragraph 16(b) and attempt to resolve the dispute through mediation.
Arbitration rules apply
The rider selects the Real Estate Industry Arbitration Rules of the American Arbitration Association.
Discovery is allowed
The parties may conduct discovery in accordance with the Florida Rules of Civil Procedure.
A binding award follows
The arbitrator decides the unresolved matter within the contractually limited authority.
Mutual initials matter
Including the rider in the document package is not enough by itself.
Addendum BB states that both buyer and seller must initial the arbitration provision. Those initials show mutual agreement to incorporate the clause and use arbitration for an unresolved covered dispute.
A missing or disputed initial can create a threshold fight over whether arbitration was ever agreed to. The transaction file should preserve a clear, legible and fully executed copy.
Never assume arbitration applies merely because “BB” is checked in Paragraph 19. Confirm that both parties actually initialed the arbitration provision.
Rules and procedure
The rider supplies default arbitration rules—but the parties retain one joint choice.
Addendum BB selects the American Arbitration Association’s Real Estate Industry Arbitration Rules. The buyer and seller may mutually agree to use different arbitration rules.
That alternative requires agreement between the parties. One side cannot unilaterally replace the selected process after a dispute begins. Legal counsel should review any proposed rule change and document it in writing.
1
Default rules
AAA Real Estate Industry Arbitration Rules govern under the rider.
2
Mutual alternative
Buyer and seller may agree together to use another set of rules.
3
Arbitrator selection
The governing rules and party agreements shape the appointment process.
4
Hearing and award
Evidence is presented and the arbitrator issues the binding decision.
Limits on the arbitrator
Binding authority is powerful—but it is not unlimited.
The rider places two express boundaries on what the arbitrator may do.
No rewriting the deal
The arbitrator may not alter the terms of the purchase contract.
No new remedy
The arbitrator may not award a remedy that the contract itself does not provide.
Discovery is permitted
The parties are allowed discovery in accordance with the Florida Rules of Civil Procedure.
Arbitration versus court
Both can resolve a dispute, but the process and review structure differ.
Neither forum is automatically faster, cheaper or better in every case. The consequences depend on the dispute and governing rules.
Private arbitration
A private arbitrator hears the matter under the selected rules. There is discovery, but procedure may differ from a civil trial. Judicial review of an award is generally limited by applicable law.
Court litigation
An unresolved dispute proceeds under the contract and applicable law through the public court system, with a judge or potentially a jury, formal procedural rules and ordinary appellate structures.
Before choosing arbitration
Buyer and seller should evaluate the same practical questions.
Potential considerations
- Privacy compared with a public court record.
- Availability of a real-estate-experienced decision-maker.
- Arbitrator, filing, facility and administration fees.
- Attorney and expert-witness expenses.
- Discovery scope and scheduling under the selected rules.
- Hearing location and anticipated timeline.
- Contractual limits on available remedies.
- Limited grounds for judicial review of an award.
Document checklist
- Confirm both buyer and seller initialed Addendum BB.
- Keep the complete executed contract and every rider.
- Preserve notices, inspection reports and communications.
- Document compliance with Paragraph 16(b) mediation.
- Identify the rules governing arbitration.
- Preserve amendments selecting different rules.
- Consult litigation counsel promptly after a dispute arises.
- Calendar every mediation and arbitration deadline.
A practical dispute timeline
The contract determines the route before anyone knows what the dispute will be.
Both parties initial BB
Buyer and seller agree in advance to arbitrate covered disputes after mediation.
Controversy arises
The parties preserve evidence, review the contract and obtain legal advice.
Mediation is attempted
The parties work with a neutral mediator but do not reach settlement.
Arbitration proceeds
Discovery, hearing and a binding award follow under the governing rules.
Frequently asked questions
Florida Addendum BB, in plain English.
Does Addendum BB eliminate mediation?
No. It applies to a dispute not resolved through mediation under Paragraph 16(b), making mediation the required preceding step in the rider’s sequence.
Must both buyer and seller agree to arbitration?
Yes. The BB provision states that both buyer and seller must initial it for the binding-arbitration language to apply.
Which arbitration rules apply?
The rider selects the Real Estate Industry Arbitration Rules of the American Arbitration Association unless the parties mutually agree to use other rules.
Can one party choose different arbitration rules?
Not unilaterally under the rider. Using other arbitration rules requires mutual agreement between the parties.
Is discovery available in arbitration?
Yes. Addendum BB states that the parties will be allowed discovery in accordance with the Florida Rules of Civil Procedure.
Can the arbitrator rewrite the contract?
No. The rider states that the arbitrator may not alter the contract’s terms or award a remedy the contract does not provide.
Can an arbitration award ever be reviewed by a court?
Binding arbitration generally has limited grounds for judicial review under applicable law. Parties should obtain legal advice about the specific award rather than assume review is either freely available or completely impossible.
Is arbitration always less expensive than court?
No. Arbitration may avoid some litigation procedures, but arbitrator, administration, attorney, discovery and expert costs can still be substantial.
Considering the arbitration rider?
The time to understand binding arbitration is before a dispute exists.
DW&Co. can help coordinate the correct contract documents and connect the parties with appropriate Florida legal professionals for advice about dispute-resolution provisions.
Talk with DW&Co. Real Estate