Janet Ahmad

Progress on Curbing Mandatory Arbitration in Texas

As predicted this year is shaping up to be one of the best in many years, for the restoration of consumer protection rights. The filing of a bill

(HB1686) by Representative Ruth Jones McClendon of Texas last week has to rank as one of the most exciting news events thus far.

The McClendon bill would effectively ban the use of binding mandatory arbitration (BMA) agreements in contracts for new homes as well as home repairs.

For the first time in history home improvement contractors would be regulated; which is an important issue that AARP has been promoting for sometime. Additionally, for the first time a salesperson that negotiates a sales contract on behalf of a builder would be regulated.

Builders could be disciplined for misrepresentation, abandoning or willfully failing to perform on a contract, disregarding plans or specifications or engaging in fraud. A recovery fund for homeowners would be created and all builders would be required to carry insurance and be bonded. Finally, the McClendon bill would create a private cause of action against any builder who violates the Texas Residential Construction Commission (TRCC) rules, and most important buyers would not be subjected to binding arbitration.

Please take a few minutes to write a note to thank Representative McClendon at, ruth.mcclendon@house.state.tx.us. It’s up to us to support the bill and ultimately the wisdom of our elected officials.

Press Release: Texas Representative McClendon HB 1686

Posted at 3:15 PM, Mar 02, 2007 in Permalink | Comments (0) | TrackBack (0)