Most residential Real Estate purchase contracts for new homes contain an arbitration provision.  The provision generally precludes a homeowner from filing a lawsuit, and mandates that they pursue any claims through arbitration.  Are these provisions enforcable?   No definitive answer can be given to this question.  Unfortunately, it depends on the contract and the circumstances.  However, it can be stated that in a number of situtations, the mandatory arbitration provision is found to be not enforcable. For example, if the arbitration provision terms are not clearly set forth, they may not be enforcable.  This is a common dispute in many construction defect cases, and many mandatory arbitration provisions are found to be invalid.

     A recent case, Anders v. Superior Court (Meritage Homes) is instructive.  In the Anders case, the purchase had a very onerous pre litigation process and mandatory arbitration procedure.  The Court found that these provisions were invalid.  The developer then attempted to utilize the pre litigation procedures outlined in the California Civil Code.  The Court found that by attempting to utilize its own onerous contract provisions, the developer had waived its right to proceed under California's pre litigation procedures.  The homeowner's were free to file their lawsuit.

     If you have a construction related problem, call us at 1-619-398-8379, or 1-866-870-2020.