Buying And Selling: Arbitrate This!

Courtesy of ConsumerAffairs.Com, we have the news that a Texas judge has ruled that KB Home's arbitration contracts are unenforceable:

The settlement means that all binding arbitration clauses in KB Home agreements are invalid and homeowners can now sue KB Home in a court of law rather than being forced into binding arbitration over construction defects.

Laredo District Court Judge Solomon Casseb approved the class action settlement that prohibits KB Home from requiring any past, present or future customers to consent to mandatory binding arbitration in the settle of warranty claims.

This is fantastic news. The real estate world is replete with tales of angry homeowners who have been forced into expensive, pointless, and horribly biased arbitration procedures to get any kind of redress for breaches of contract. KB Home, in particular, has been a major player on that front, so anything that smacks them makes me happy. Ah, I remember the glory days of KB Homes Sucks well....

Here's a great article that explains the pros and cons of arbitration. The problem with "alternative dispute resolution" is that it's often every bit as costly as a traditional legal settlement, and much more of the costs are borne by the consumer, with a far lower chance of redress. And these clauses are tucked deeply into almost every service agreement you can think of these days. Major corporations know that most people don't read the fine print, and don't realize what rights they're giving up.

HOBB has a list of list of home builders that include binding arbitration in their contracts. (WARNING: I make no claim as to the accuracy of this list. You are encouraged to investigate for yourself.)

You have the right as an American citizen to have your grievances heard in a court of law. As silly and frivolous as our lawsuit-happy culture can be at times, I'd rather have that than people suffering in silence with no way to seek justice for wrongs done to them. Remember, if buying a home of any kind, READ THE ENTIRE CONTRACT LIKE YOUR LIFE DEPENDED ON IT. Because if the builder or realtor slips something in there that ends up screwing you, it just might be the case.

Posted at May 19, 2006 03:56 PM

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Courtesy of ConsumerAffairs.Com, we have the news that a Texas judge has ruled that KB Home's arbitration contracts are unenforceable: The settlement means that all binding arbitration clauses in KB Home agreements are invalid and homeowners can now sue KB Home in a court of law rather than being forced into binding arbitration over construction defects. Laredo District Court Judge Solomon Casseb approved the class action settlement that prohibits KB Home from requiring any past, present or future customers to consent to mandatory binding arbitration in the settle of warranty claims. This is fantastic news. The real estate world is replete with tales of angry homeowners who have been forced into expensive, pointless, and horribly biased arbitration procedures to get any kind of redress for breaches of contract. KB Home, in particular, has been a major player on that front, so anything that smacks them makes me happy. Ah, I remember the glory days of KB Homes Sucks well.... Here's a great article that explains the pros and cons of arbitration. The problem with "alternative dispute resolution" is that it's often every bit as costly as a traditional legal settlement, and much more of the costs are borne by the consumer, with a far lower chance of redress. And these clauses are tucked deeply into almost every service agreement you can think of these days. Major corporations know that most people don't read the fine print, and don't realize what rights they're giving up. HOBB has a list of list of home builders that include binding arbitration in their contracts. (WARNING: I make no claim as to the accuracy of this list. You are encouraged to investigate for yourself.) You have the right as an American citizen to have your grievances heard in a court of law. As silly and frivolous as our lawsuit-happy culture can be at times, I'd rather have that than people suffering in silence with no way to seek justice for wrongs done to them. Remember, if buying a home of any kind, READ THE ENTIRE CONTRACT LIKE YOUR LIFE DEPENDED ON IT. Because if the builder or realtor slips something in there that ends up screwing you, it just might be the case.