And if all else fails in your conflict resolution plan, put in a mediation / arbitration kicker if things really go afoul.

Our agreement contains the statement that "release of funds will require mutual signed release instructions from buyer and seller, judicial decision or arbitration award." 

This is all in addition to a different plumbing issue that they had to have known about as there was evidence of prior damage and work done.Has anybody ever had experience with arbitration/suits regarding disclosures?  

We are landlords, not counsellors and not arbitrators.

If I issue a "3day pay or quit", I don't need some arbitrator in the process.

I have also filed an insurance claim that was purchased by my bank to cover for damage caused by a contractor, however, they've now determined that it is not covered although they have also concluded he is at fault.My next step will have to be arbitration if I can come up with the $7,000 to file a claim.

I’ve been through a lengthy arbitration process, which is binding, spent almost $60k chasing $19k, got it all back in the end....but it wasn’t fun. 

A majority of the mediation or arbitration hearings involve that from what I understand. 

However, if an issue arise and one of you need to enforce the contract on the other, you will have to seek an arbitration or go to court.

Most of the arbitration ($$$) that happens at the local boards is over who gets commission for bringing a buyer.