In a Move Opposed by NAHB, House Passes Anti-Arbitration Bill

Acting against the strong opposition of NAHB, the House today voted largely along party lines to narrowly approve the Forced Arbitration Injustice Repeal Act (H.R. 963), legislation that would prohibit two parties from including in a contract a pre-dispute arbitration agreement. NAHB strongly supports the use of alternative dispute resolution (ADR), including binding arbitration, in consumer contracts.

NAHB has found that ADR is often the most rapid, fair and cost-effective means to resolving trade disputes – for the both the builder and buyer – arising out of the construction and/or sale of the home. In contrast, litigation is expensive, time consuming and unlikely to produce the desired result – getting the problem repaired.

For the home buyer, the use of arbitration also provides them with certainty that any dispute will be resolved in a quick, fair and less costly manner than litigation.

NAHB members have priced their products based on an agreed-upon contract. Because arbitration allows businesses to contain their legal costs, those savings are often included in the price of the product.

Prior to the House vote, NAHB sent a letter to House members detailing our concerns with the bill and designated opposition to the legislation as a “key vote” because of its importance to the housing community. The Senate is not expected to act on a companion bill.