It's not what you would call a big thing. Maybe a nagging thing; a bothersome thing. You told the builder at the walk-through of your new home that the job they did on your kitchen tile counter tops did not turn out as you had expected. You accepted the home just the same, but now that you have lived in the house for a while, it bothers you more and more. So, you call the builder's customer service department (your house is still pretty new) and air your complaints. You follow up with faxes, meet with customer service personnel and exhaust all the possibilities there are to remedying what you perceive as poor workmanship on the part of the builder. In the end, the builder says they consider the tile job to be adequate for a production home, and up to industry standards. This incenses you, but it feels as if they've led you down a dead-end path and you just want to do something about it.

So what's the next step? Can you sue them? Take them to court? Drive the salesperson sitting in the model home crazy with your complaints? Call the State Contractor's Licensing Board? The answer may be yes to all of the above (although driving the salesperson crazy won't help), but just how many letters, frazzled nerves, and phone calls will it take? And aren't you sick about hearing how everyone else is sue-happy over just about everything? How can you avoid having to go to such great lengths to settle disputes such as this with a home builder?

Your local State Contractor's Licensing Board is there to help solve issues with builders when they are of the major variety (mostly structural), but usually will not deal with "cosmetic" issue disputes such . The answer may be arbitration. If this word sounds familiar, chances are it was contained within your new home purchase agreement regarding how deposits would be handled in the case of a default. Arbitration in real estate can be used for all sorts of things, however, and if your builder uses it for warranty disputes, it may be a godsend, because it can, to some degree, give everyone a sounding board to "let off steam" when builder and buyer are at an impasse. It's also a lot cheaper than hiring legal counsel and going the way of litigation.

An arbiter, or arbitration board, is a neutral, third party that can intervene and study the both written and verbal representations made by both buyers and sellers and help put everything into perspective. It will use the builder warranty to either back up the builder or the buyer on items in question to lead to a resolution that both parties may be able to live with, and help eliminate the emotion inherent in these disputes as well.

In most cases the builder is bound by the results of the arbitration, but buyers may not be, and can take legal action if they are convinced they still have been wronged. What the process can do, however, is give everyone an open forum to express their understandings and misunderstandings before taking it further and perhaps provide a "cooling off period" when buyers and sellers are in abject disagreement.

Most new home builders pride themselves on "word of mouth" types of referral sales and want to avoid costly and defaming legal battles over real or imagined defects in their homes. It may be a good idea in the long run to the buyer of the new home community you are considering if they offer some kind of warranty arbitration.

For more New Home News & Issues, Click Here

Published: May 12, 1999

Use of this article without permission is a violation of federal copyright laws.