Arbitration Clauses And Class Action Waivers In Residential Leases: Are They Enforceable?

Landlords and property managers are increasingly adding arbitration clauses with class action waivers to their residential leases. These lease provisions can protect landlords from the significant time and costs associated with litigating claims brought by residents, including potential class claims that present high exposure risk for multifamily owners and managers. But the enforceability of these types of provisions remains an open question in many states.

Arbitration Clauses in Residential Leases

Arbitration—the out-of-court resolution of a dispute through a formal process—is typically faster, less expensive, and less complex than traditional litigation. Many contracts include provisions requiring disputes arising out of the contract to be resolved through arbitration.Residential leases are contracts and can include such provisions.