Investment propertyArbitrate, Don"t Litigate with Builders!
It"s not what you would call a big thing. Maybe a nagging thing; a
bothersome
thing. You told the builder at the walk-through of your new home that the
job they did on your kitchen tile counter tops did not turn out as you had
expected. You accepted the home just the same, but now that you have lived
in the house for a while, it bothers you more and more. So, you call the
builder"s customer service department (your house is still pretty new) and
air your complaints. You follow up with faxes, meet with customer service
personnel and exhaust all the possibilities there are to remedying what you
perceive as poor workmanship on the part of the builder. In the end, the
builder says they consider the tile job to be adequate for a production home,
and up to industry standards. This incenses you, but it feels as if they"ve
led you down a dead-end path and you just want to do something about it.
So what"s the next step? Can you sue them? Take them to court? Drive the
salesperson sitting in the model home crazy with your complaints? Call the
State Contractor"s Licensing Board? The answer may be yes to all of the
above (although driving the salesperson crazy won"t help), but just how many
letters, frazzled nerves, and phone calls will it take? And aren"t you sick
about hearing how everyone else is sue-happy over just about everything? How
can you avoid having to go to such great lengths to settle disputes such as
this with a home builder?
Your local State Contractor"s Licensing Board is there to help solve issues
with builders when they are of the major variety (mostly structural), but
usually will not deal with "cosmetic" issue disputes such . The answer may be
arbitration. If this word sounds familiar, chances are it was contained
within your new home purchase agreement regarding how deposits would be
handled in the case of a default. Arbitration in real estate can be used for
all sorts of things, however, and if your builder uses it for warranty
disputes, it may be a godsend, because it can, to some degree, give everyone
a sounding board to "let off steam" when builder and buyer are at an impasse.
It"s also a lot cheaper than hiring legal counsel and going the way of
litigation.
An arbiter, or arbitration board, is a neutral, third party that can
intervene and study the both written and verbal representations made by both
buyers and sellers and help put everything into perspective. It will use the
builder warranty to either back up the builder or the buyer on items in
question to lead to a resolution that both parties may be able to live with,
and help eliminate the emotion inherent in these disputes as well.
In most cases the builder is bound by the results of the arbitration, but
buyers may not be, and can take legal action if they are convinced they still
have been wronged. What the process can do, however, is give everyone an
open forum to express their understandings and misunderstandings before
taking it further and perhaps provide a "cooling off period" when buyers and
sellers are in abject disagreement.
Most new home builders pride themselves on "word of mouth" types of referral
sales and want to avoid costly and defaming legal battles over real or
imagined defects in their homes. It may be a good idea in the long run to
the buyer of the new home community you are considering if they offer some
kind of warranty arbitration.
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