Critics say new rule favors contractors; builders contend it will make complaint process more efficient 
A new law, signed by Gov. John Engler on July 31, makes it mandatory for consumers to go to arbitration if the builder seeks negotiations and provides a third party to conduct them. Previously, the Michigan Department of Consumer and Industry Services handled all consumer complaints by holding formal hearings.

Washington Post: No Suits Allowed - Increasingly, Arbitration Is the Only Recourse
Five weeks after Dawn and Scott Richardson and their family moved into their new $300,000 house in Austin, they moved out. Dawn Richardson says the house had become so contaminated with toxic mold and volatile chemicals -- benzene and formaldehyde and more -- that she and her then-16-month-old daughter suffered bloody noses, rashes, dizziness, shortness of breath and neurological disorders... Richardson is convinced she won't get a fair hearing. "We have not found a single example of a single homeowner who's ever won against a builder in binding arbitration," she said. "Why would an AAA [American Arbitration Association] arbitrator find in favor of the consumer when AAA is Weekley's exclusive arbitration firm? If the arbitrator finds against Weekley Homes, AAA will no longer be on the contract, and the arbitrator may be blackballed from future work."

Mandatory Arbitration Hits Home
Texas and federal courts provide little protection to consumers trapped in arbitration agreements. The recent housing surge in the Lone Star State gave rise to a number of disputes between homeowners and homebuilders. Many homeowners learned, to their chagrin, that during the excitement of signing the contracts for their dream homes, they may have inadvertently signed away the constitutional right to have juries settle complaints against the homebuilders...In April 2002, Texas Lawyer reported an ongoing case of Dawn Richardson, an Austin homeowner, who filed a suit against David Weekley Homes after she learned that her family's new home allegedly was contaminated with dangerous levels of toxic mold and volatile organic compounds such as benzene, benzaldehyde, decane, heptane,formaldehyde, methylbenzene, octane, styrene and xylene.

Texas House panel hears complaints about binding arbitration requirement
Home buyers with horrifying tales of creeping mold, collapsing walls and heaving foundations converged on a Texas House subcommittee Wednesday to complain about how they unwittingly signed sales contracts preventing them from suing the builders they claim are responsible for their woes. "We're stuck with a house on our land that we don't want," Dawn Richardson of Austin told the House Subcommittee on Binding Arbitration. "We did not know that signing a construction contract . . . meant that we forever gave up our constitutional right to a trial by jury for any and all future disputes with our builder."

Moldy 'Lemon' Homes Denied Day In Court
A Texas House panel today will explore if consumers are being hurt by businesses? increasing reliance on ?binding arbitration.? Consumers will decry the privatized ?justice? system that binding arbitration has created, while business interests that give millions of dollars to Texas politicians will rush to the defense of this plaintiff-hostile system.

Private arbitration criticized Report says court often cheaper; supporters say study is misleading
Private arbitration is not as cost effective and time efficient as its proponents have stated, according to a new report conducted by Public Citizen, a consumer organization.The study will be introduced this week to a Texas legislative panel starting a review of the role of arbitration in resolving legal and contractual disputes, according to officials at Public Citizen, which is based in Washington, D.C.The report found that for most low-income individuals, going to court remains cheaper and faster than private arbitration. It also found that many companies use the high cost of filing and pursuing arbitration to keep people from filing claims against them.

Builder Attempts to Compel All Claims to Arbitration
Travis Count Court conducted a hearing to rule on David Weekley Homes' motion to compel arbitration for all claims against them from Richardson. The Richardson's attorney, Mark Smith of Williams Bailey Law Firm responded that the costs to the Richardsons would be unreasonably excessive - well over $24,000 - while court costs in Travis County were only $150. The judge agreed that these excessive fees for arbitration would effectively deny the Richardsons a forum to seek justice.

Beware:Toxic Mold
Sharyn Iler, 52, of the Woodlands, Texas, an upscale suburb of Houston, couldn't figure out what was wrong. Every time she went into her bathroom to put on makeup, her eyes started burning. She felt constantly exhausted, her vision was blurry and she had a dry cough that just wouldn't quit. Diagnosed with breast cancer in 1998, Iler feared the worst. Perhaps after two years of remission, the disease had returned. She never imagined that the source of her troubles might lie buried within the walls of her $300,000 home...

David Weekley Homes' Hypocritical Donations Incite Families Hurt by Homebuilder
David Weekley Homes has hurt many families making them homeless, hurting them financially, and sometimes even injuring them physically. In the meantime, they have just given $50,000 to a national charity that provides homes to the temporarily homeless. This is beyond hypocritical - it is cruel and egregious that they would take hardworking families' money and build them houses so full of construction defects and contamination that they are unsafe to live in and then turn the other way refusing to take FULL responsibility for the economic damages, injuries, and pain and suffering they have caused.

Faulty construction, mold-attracting materials, builder shortcuts hazardous to new homes Willard and Cinda Thomas say their dream house almost killed them. Only four years after moving into the 3,000-square-foot model home in Keller, Cinda had joint pain to the point where she could barely walk. Willard became weak, depressed, asthmatic and arthritic...Mold may be the last thing home buyers think of on moving day. But home inspectors and some homeowners have found that new homes are not exempt from sometimes devastating mold infestation. Faulty building techniques, builder shortcuts during the construction boom and some materials that serve as food for mold are being blamed for mold moving into some new homes as fast as the new owners do.

New Weapons In The War On Toxic Mold
In March, the Richardsons sued the builder, David Weekley Homes, claiming that their negligence during the construction process created the optimal environment for the growth of toxic molds and compounds, many of which produce poisonous chemicals that cause chronic and acute health problems, including cancer.

Read the Fine Print
"We had no idea that by signing a contract we were giving up the right to ever have our story heard by a jury," says homeowner Dawn Richardson. "You never imagine that the people building your home are trying to hurt you." In March 2001, Dawn and her husband Scott filed suit against David Weekley Homes, claiming their new $300,000 Austin house was contaminated with toxic mold resulting from a water leak that began the previous year, just days after they moved in. Though the family spent only five weeks living in their new home, Dawn Richardson says both she and her young daughter suffered neurological damage that physicians diagnosed as environmental toxic exposure, which may be irreversible...Reggie James, director of Consumers Union's Southwest Regional Office, compared binding arbitration to a bullet: It does the same amount of harm to consumers whether they see it coming or not.

On April 26, 2001 an 18-wheeler ran off of I-30 and crashed into our home when its driver had a heart attack. We had lived in our new home for only one day when the accident occurred, which rendered it uninhabitable. The truck driver's insurance refused to pay for the repairs to our home claiming that the driver's heart attack was an act of God, and therefore, not covered.

Link: http://www.texaswatch.org/hallofshame_share_consumerlaw_story.asp?insurid=135

On April 26, 2001 an 18-wheeler ran off of I-30 and crashed into our home when its driver had a heart attack. We had lived in our new home for only one day when the accident occurred, which rendered it uninhabitable. The truck driver's insurance refused to pay for the repairs to our home claiming that the driver's heart attack was an act of God, and therefore, not covered.

Link: http://www.texaswatch.org/hallofshame_share_consumerlaw_story.asp?insurid=135

Deficient building practices cited in high home insurance rates
In May, Richardson, who has filed a lawsuit against the builder, testified in front of the Texas House of Representatives Committee on Business and Industry and has also testified for the Civil Services Committee. "I've talked to so many home owners and it's simply a really pervasive problem," she said. "We had pieces of wood in the homes that were put in moldy during the construction process." An uneducated work force, a premium placed on affordability, and a lack of statewide regulation are some of the factors officials cite in home problems that lead to increased insurance claims. "We need to build affordable housing, but the ramifications of affordability are costing us tons of money as a society in terms of insurance premiums, maintenance costs, water penetration costs, and lawsuits," said the national program manager of a Collin County building supplies company who spoke under the condition of anonymity. "Water penetration is caused by a dysfunctional process that uses poor quality materials and often has design flaws."

Deficient building practices cited in high home insurance rates
Dawn and Scott Richardson received an unwanted glimpse into the homebuilding and insurance industries after being forced out of their $300,000 Austin-area home last year. Just five weeks after construction in 2001, Richardson said the home had become so contaminated with toxic mold and chemicals that she and her baby daughter began suffering health problems that included nausea, neurological problems, and allergic reactions... And as a pitched political battle continues over how to remedy soaring statewide home owner's insurance rates, some building officials and consumer activists have begun to echo Richardson's sentiment, pointing to deficient construction practices as a significant factor in insurance rates that have doubled and in some cases tripled in the past year.

You may have unknowingly waived your constitutional right to a trial by jury when you purchased you new home, used your credit card or made a long-distance phone call. Today, mandatory arbitration agreements are found in almost all consumer contracts, and they are successfully being used by big corporations to block access to courts by consumers who have been treated unfairly. Go to www.texaswatch.org to learn more about arbitration and its pitfalls for consumers.