Homebuilders: Watch Out For The Arbitration Fairness Act

Tomorrow is "Arbitration Fairness Day" in Washington, D.C., when supporters of the Arbitration Fairness Act now pending in Congress will gather at a press event attempting to press this federal legislation forward. Introduced by Congressman Hank Johnson of Georgia, HR 1020 would amend federal arbitration laws to prohibit entering into arbitration agreements before a dispute arises in certain types of situations, including franchise agreements, civil rights disputes, employment, and consumer transactions. "Consumer transactions" are not defined, but could readily be interpreted to include purchase of a condominium unit or single family home. The unintended effect of this bill, if passed as it is now worded, would be to destroy all arbitration clauses in residential construction contracts. Call your congressman before it is too late.