Oklahoma City Home Owner has Doubts About Arbitration
Original Message ----- From: "Cindy Schnackel"
I read your article on arbitration from a link on Homeowners Against Deficient Dwellings, HADD, http://www.hadd.com and would like to relate our experience with a new home warranty, and the company's attempt to force us into binding arbitration.
We purchased a new home in April 2000 built by Richard Fuller Homes, in OKC, OK. Immediately after moving in, we started noticing signs of more serious defects than just the usual punch list items. (Foundation failure, improper grading, and roof leaks.) Then the builder sold off all their remaining lots and took Oklahoma off their website as an area they built in. (Still builds in TX and NM (http://www.fullerhomes.com ) The builder told us alternately that they would take care of the problems, which they didn't do, and that they didn't know, which they did, and then told us they already fixed many of the items, which of course they hadn't. They told us to submit a claim to the warranty company, which we did. The warranty company initially said they had many complaints against Fuller, and that they'd take care of it if he didn't. Well, they didn't keep their promises, either. The warranty company is Home Buyers Warranty and they are backed by National Home Insurance Company.
After nearly a year of the builder and HBW/NHIC passing the buck, ignoring us, and making promises that were never kept, HBW/NHIC tried to force us into binding arbitration--with an arbitrator they pre-hired and we had no say in the matter. I had been doing quite a bit of research on this whole matter, and found out that binding arbitration rarely decides in the favor of a homeowner, that it is unappealable, you can't sue, and you can't even talk about it. Plus, it costs way more than they divulge in the beginning, AND you still need to hire a lawyer at $180 or so per hour. We said "no way!"
Then, I found out from Janet Ahmad of Home Owners for Better Building, http://www.hobb.org that our FHA loan did not allow them to force binding arbitration on us. She gave me a number of a Mr. Ken Walker from HUD in D.C. and he called the vice president of HBW. Suddenly, HBW and NHIC did a 180 degree turn in attitude. They were making promises all over the place, putting them in writing this time, and forgot all about binding arbitration. However, they quickly started to send letters worded such that they may be trying to back out of those promises now.
We are still fighting this, and have filed complaints against these companies with HUD, the Better Business Bureau, builders associations here, and the Attorney General, to name the key ones. I will be filing still more complaints unless they keep their word. They are all still passing the buck, and to confuse things further, the builder claimed his "insurance company," Great American, is taking care of it. He told the attorney general of OKlahoma this, and claimed we knew this was being taken care of. This is not true--he never told US any such thing, nor had any insurance company contacted us up to then. About a week or so later, an indipendent adjuster from GAB Robins called, representing Great American. He made an appt which he broke. Later made a second appt, and kept that, but thought he could take all our original documents with him--our engineering reports, letters, warranty policy, etc. I have about five of those three inch binders full of this stuff, plus more...we said "no way!" He promised to call back with a list of the documents he wanted copies of, but he never called back and has not returned my messages. He is the third person in this mess who's asked for our originals. I find that very inappropriate.
All we've gotten are broken promises, and denial of responsibility from these companies. But even if we did not have an FHA loan, we would not do arbitration. It would be cheaper for us to go deep into debt to fix it ourselves, or just foreclose, than to do arbitration or to sue, then have to fix it anyway. Because, in arbitration, they'd certainly rule against us and never have to explain themselves or why their own engineers report plus two others was ignored--and if we sued, we might never collect. This builder has been sued before in NM that we know of, and we know he did not pay at least some of his subs in TX because we know a customer of his there who's home has a lien put on it by the sub because Fuller did not pay him.) We'd have to pay the lawyer though. So there is no advantage, at least in our case, of agreeing to arbitrate. I certainly don't intend to let them get away with this. The whole thing has outraged me!
Sincerely, Mrs. Cindy Schnackel, Oklahoma City