Rhode Island Property Owner Faces Arbitration Agreement Dispute

Rhode Island property owners are generally allowed to seek damages through state courts from contractors who fail to uphold the terms of a contract for repairs or improvements. Certain claims may not be best suited to be heard by a superior court, and the law has provisions to allow for simplified proceedings in some cases. For disputes concerning $5000 or less, parties can pursue a small claims proceeding in the district court. Small claims cases are not as complicated as superior court cases, and the simplified rules of procedure allow parties to represent themselves more effectively in such proceedings.

Claims for amounts over $5000 are generally heard in the superior court; however, the parties may agree to seek binding arbitration in the event of a dispute. Arbitration is a semi-judicial and binding proceeding where a private arbiter is chosen to decide contractual disputes instead of a court. Arbitration proceedings are simplified and often result in fewer legal expenses for the parties involved. If both parties agree in writing upon entering into a contract that disputes will be resolved through arbitration, then they must abide by the agreement and cannot file a lawsuit in the superior court over a dispute. A Rhode Island superior court recently addressed a claim by a landlord against a contractor for breach of contract where an arbitration agreement had been previously made.

The plaintiff in the recently decided case is a property owner and landlord who entered into a contract with the defendant to complete repairs and improvements on a home. The parties entered into an arbitration agreement upon signing the initial contract. After the defendant allegedly failed to perform the contract, the plaintiff sought administrative relief through the Contractors’ Registration and Licensing Board, a state agency. As part of the CRLB proceedings, the parties agreed in writing to waive the arbitration agreement and allow the CRLB to handle the dispute. Once the arbitration agreement was waived, the plaintiff filed suit against the defendant in the Superior Court for breach of contract.

The defendant disputed the plaintiff’s filing, claiming that the arbitration agreement was still in effect, and was only waived partially to allow for the CRLB proceedings. The plaintiff responded that the waiver was made in writing and was not limited to the CRLB proceedings and that the plaintiff was now entitled to seek relief through the courts. The court agreed with the plaintiff’s arguments and ruled that the arbitration agreement had been fully waived. As a result of the ruling, the plaintiff’s claim will proceed toward a trial in the superior court.

Are You Handling Disputes with Contractors Effectively?

If you are a Rhode Island property owner or landlord, using contractors to have work performed on your property may feel like a risky endeavor. Contractors often have the upper hand against their customers when disputes arise, and they may use tricks such as arbitration agreements to give them even more of an advantage. If you are in the middle of a contractor dispute, contacting the knowledgeable Rhode Island real estate lawyers at Bilodeau Capalbo can help you take the best course through the dispute. Our qualified attorneys understand all the issues that property owners and landlords face, and we can advise you on how to best proceed. Contact us to schedule a free consultation with a qualified Rhode Island real estate attorney by calling 401-300-4055 today.