Home Building Arbitration

Forced arbitration appears in two possible places for an unwary home buyer: 1) The builder's contract; and/or 2) A home warranty policy from a third-party company such as HBW or RWC. Although billed as protection plans the details of warranties often are withheld until closing – when it’s too late for the homeowner to say “No thanks.” Close reading of these documents reveals that they typically do more to protect builders than buyers. Aside from imposing forced arbitration clauses on buyers, new home warranties also exclude from coverage many protections buyers would otherwise enjoy under broad "implied warranty" statutes that apply to any purchase of a new house.

Forced arbitration serves another purpose for these builders and other industries that use this sham legal system: it keeps complaints hidden from public view. Arbitration yields little or no public record. Additionally, clauses in arbitration clauses often include gag orders that prohibit home owners from even talking about their case.