By RAY ADLER
Ask Adler
It is time to build your dream home.
You find a local company that has built numerous other homes. It has a welcoming model home and a smooth-talking sales agent. You and your spouse are going to have a new home that is done your way with all the features that you desire.
The construction contract seems to be very thorough as you walk through the options with the agent and put down a significant deposit. The salesman indicates that they have related title, insurance, and finance companies that will make the process seamless.
But then things start going wrong.
Lately, we have seen cases where regional and national builders have not complied with the terms of their own agreement. Furthermore, many of these construction contracts require meditation and/or arbitration. Often an arbitration clause limits your rights to go to court and gives up your right to a jury trial.
Exactly what is an arbitration agreement? An arbitration agreement is a legally binding term in a contract that provides an alternative method of resolving a legal dispute. Namely, utilizing the services of an independent third party who resolves the dispute. Arbitration claims to be faster, more flexible, affordable, and private, and many of the evidentiary rules found in the court system are relaxed or do not apply.
However, for the consumer, arbitration rarely results in a level playing field.
Despite the claims of its informality and faster resolution, arbitration is quite expensive. In addition to the attorney fees one will likely incur, the arbitrator also charges for his or her services and arbitrator fees are not cheap! In reality, arbitration clauses are used to discourage litigation and usually are detrimental to the consumer.
If you are preparing to purchase a home from one of the numerous home builders in the area, carefully read through your construction contract and be sure to understand what rights you might be giving up by signing the contract.
Educational material and not legal advice, written by the team at Adler attorneys. Email andrea@noblesvilleattorney.com with questions or comments.