Mandatory binding arbitration clause
Mandatory arbitration forces disputes out of court and into a process that often favors landlords. Some states ban it in residential leases.
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What it actually means
Arbitration is private, usually binding, and the arbitrator may be chosen by the landlord. You lose the right to a judge and jury.
Some claims (fair housing, security deposit) may still go to court despite arbitration clauses. But you'll have to fight for it.
What it looks like in a lease
"Any dispute arising under this Lease shall be resolved by binding arbitration under AAA rules."
What to watch for
- Whether small claims is excepted
- Who pays arbitration fees
How to negotiate it
'Please remove mandatory arbitration. I want access to small claims court.'
When it crosses into a red flag
- Binding arbitration with no exceptions
- Tenant pays arbitrator fees
Frequently asked questions
Is arbitration always bad?
Not always — but forced arbitration removes your choice. Opt-out if you can.
Related clauses
General information, not legal advice. Clauses are interpreted differently across states and courts. For a binding interpretation of your specific lease, consult a licensed attorney in your state.
