Texas release report on the abuse of arbitration in new home construction

[johncoby2]

Texas Builders Commission release new report on the abuse of arbitration in new home construction.

Further Information Contact:
John R. Cobarruvias
President Homeowners Against Deficient Dwellings Texas
[e-mail]
281-486-5203 H
281-483-9357 W
281-222-2754 C
 
Summary: The newly created Texas Residential Construction Commission (TRCC) has released yet another report on the abuse of arbitration in the home building industry. This is the 4th report on arbitration in the past 3 years from the State of Texas.

Houston TX. January 24, 2005 The Texas Residential Construction Commission (TRCC), created by the Texas Legislature in 2003, has released yet another report on the abuse of arbitration in the home building industry. This report, although thorough continues to lack the necessary recommendations to correct the blatant abuse of arbitration.

The Arbitration Task Force initially stacked with members of the homebuilding and arbitration industry, was created as part of the 2003 legislation. The composition of the task force was changed to add four consumer representatives after a Senate hearing on the abuse of arbitration and the American Arbitration Association.

The Task Force was to study the abuse of arbitration which is mandatory in new home contracts and provide recommendations to the 2005 Legislation session. These recommendations include education of the potential homebuyer, full disclosure of the mandatory arbitration clause, a warning on the cost of arbitration, and public disclosure of arbitration awards.

"The report fails to recognize a simple, inexpensive, solution to the abuse of arbitration in the new home building industry." states the Texas President of Homeowners Against Deficient Dwellings, John Cobarruvias. "Instead of regulating the American Arbitration Association, our rights to the Constitution which guarantees a civil trial should be preserved, and arbitration should remain a true alternative and optional. This would avoid the bureaucracy of regulation and preserve the secrecy of the arbitration process."

The abuse of arbitration, the Texas homebuilding industry, and the American Arbitration Association has been the subject of four studies by the Texas House, Senate, and the TRCC. Each has raised serious questions about the extreme cost to the consumer and the heavy bias in favor of the building industry. Contrary to popular belief, arbitration in the home building industry has been found to be extremely expensive and grossly unfair to the consumer.


The arbitration report can be found at:
http://www.trcc.state.tx.us/publications/050104%20Arbitration%20Report.pdf