Binding Arbitration in Texas: When It's Worth It

If your formal ARB hearing didn't go the way you wanted, binding arbitration is often the most practical next step, faster and less expensive than district court, and available without hiring an attorney. Here's how it actually works and when it makes sense to pursue.

What Binding Arbitration Is

After an unfavorable ARB order, you can request binding arbitration instead of, or in addition to considering, a district court appeal. A neutral, state approved arbitrator reviews the evidence from both you and the appraisal district, and issues a decision. As the name suggests, the outcome is final. Neither side can appeal an arbitrator's ruling further through this process.

Eligibility

Binding arbitration is generally available for:

• Residential properties, regardless of value
• Other property types below a certain appraised value threshold set by the Comptroller's office

Higher value nonresidential properties above that threshold are typically directed toward the State Office of Administrative Hearings (SOAH) or district court instead. Check the current threshold with the Comptroller's office or your CAD, as these figures can be adjusted.

The Filing Process

1. 1File within the deadline. This is typically 60 days from the date you receive your ARB order. This deadline is firm.
2. 2Submit the required form (Comptroller Form AP-219 or the current equivalent) to your appraisal district, along with the arbitration deposit.
3. 3Pay the deposit. The amount depends on your property's appraised value: homesteads and lower value properties have a lower deposit than higher value properties or properties without a homestead exemption.
4. 4If you win (the arbitrator rules your value should be reduced), most of your deposit is refunded, with a portion retained to cover administrative costs. If you lose, the deposit is generally forfeited to cover the arbitrator's fee.

What Happens During Arbitration

• The Comptroller's office assigns an approved arbitrator from their registry, or in some cases you and the appraisal district can agree on one from the approved list.
• Both sides submit evidence, similar to what you'd present at an ARB hearing: comparable sales, unequal appraisal data, condition documentation.
• The arbitrator may hold a hearing (in person, by phone, or based on written submissions, depending on what's agreed) or, in simpler cases, rule based on the written evidence alone.
• A decision is typically issued within a matter of weeks to a couple of months, considerably faster than most district court timelines.

Arbitration vs. District Court: How to Choose

Arbitration Tends to Make More Sense When

• The disputed value difference is moderate. Large enough to be worth pursuing, but not so large that the cost of an attorney and lengthy litigation is clearly justified
• You want a faster resolution
• You're comfortable presenting your own evidence without legal representation

District Court Tends to Make More Sense When

• The disputed value is very large (common in commercial or high value properties)
• There are legal or procedural issues beyond a straightforward valuation dispute
• You have legal representation and the potential recovery justifies the cost and timeline

A Few Things to Know Before You File

• You generally cannot pursue both binding arbitration and district court on the same protest. You choose one path.
• Make sure your evidence is genuinely stronger or more complete than what you presented at the ARB hearing. Arbitration is not a chance to simply reargue the same case in front of a different audience and hope for a different outcome. A stronger, more complete presentation is what actually improves your odds.
• Keep copies of everything: your ARB order, your arbitration filing, your deposit receipt, and all evidence submitted, until the process concludes.