Arbitration Clause in Builder Buyer Agreement

When you purchase a home from a builder, you sign a builder buyer agreement that outlines all the terms and conditions of the purchase. One of the most important clauses in this agreement is the arbitration clause.

An arbitration clause is a provision in a contract that requires any disputes between the parties to be resolved through arbitration. This means that if there is a disagreement between the buyer and the builder regarding the purchase, they are required to submit the dispute to an arbitrator rather than to a court of law.

Arbitration is an alternative form of dispute resolution that is often faster and less expensive than going to court. The arbitrator is a neutral third party who will hear both sides of the dispute and make a binding decision. The decision of the arbitrator is final and cannot be appealed.

The arbitration clause in a builder buyer agreement is meant to protect both parties. For the builder, it ensures that any disputes will be resolved in a timely and cost-effective manner. For the buyer, it ensures that they have a fair and unbiased forum in which to resolve disputes.

However, it is important for buyers to understand the implications of the arbitration clause. By signing the agreement, they are giving up their right to bring a lawsuit against the builder. Instead, any disputes must be resolved through arbitration.

It is also important for buyers to understand the terms of the arbitration clause. For example, the clause may specify the number of arbitrators who will be involved, their qualifications, the location of the arbitration, and the rules that will be followed. Buyers should review these terms carefully to ensure that they are comfortable with them before signing the agreement.

In conclusion, the arbitration clause in a builder buyer agreement is an important provision that helps to ensure a fair and efficient resolution of disputes. It is important for buyers to understand the implications of the clause and to review its terms carefully before signing the agreement. A knowledgeable real estate attorney can assist in reviewing the agreement and advising on any potential disputes.