We've discussed how mandatory arbitration clauses and similar sneakwrap terms can cause problems in everything from computers to cars, but a reader warns about another area where one should look over the fine print very closely. Few of us will build a new house more than once or twice in our lifetime, so you don't want to learn through bitter experience how eager some home developers are to take advantage of you with their contracts.
"I have never had to sue anyone, but I do reserve the right to do so, because it keeps people honest," the reader wrote. "So when I bought my new home, I walked away from a half-million dollar sales contract, only to be stopped at the door at the last minute by the builder, who agreed to put a great big red 'X' through the arbitration clause. I also insisted on crossing out the user-not-permitted-to-inspect-until-final-walkthrough clause and the we-may-make-any-changes-we-deem-suitable clause from the boilerplate as well. Thank God I did."
The contractor attempted to deliver far less than had been promised to the reader. "We would have had a different lot than we'd selected, twice as far from my work and at a different school for my daughter," the reader wrote. "There were missing doors and others things that I caught during the walk-through. And, the real deal killer, it didn't have the handicapped access we required."
When the reader complained after his final walkthrough of the house, he was told there was nothing he could do because, basically, the arbitration clause would not allow him to sue. "This very smug woman who managed the builder's office was telling me in a teacher-to-child voice that the missing features had been deleted from the plans at their discretion," he recalls. "'I really understand that you might be upset,' she was saying to me, 'but that's the way it is and you really can't do anything about it.' She was a bit shocked when I pointed out that my sales contract in fact didn't include the arbitration clause, and even more shocked when I called the builder directly and cancelled the contract for non-performance. That afternoon they began adding the promised features, even though they had to tear it down a bit to do so."
The lesson is that making sure you have the right to sue can be the best way to make sure you don't have to sue. "People do not buy new homes often enough for the contractors to have their repeat business threatened when they walk away from their agreements," the reader wrote. "'Trust us' means nothing if one party in the contract has the upper hand like that, and every financial reason not to perform."
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