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May 20, 2009

Home Builder Used Forced Arbitration to Avoid Accountability

Statement of Michelle Rechtien of Savannah, Ga.

Because of forced arbitration, my husband and I have been stuck with a house riddled with costly defects. The builder we bought our new home from has used arbitration to force complaints against it into a rigged system so it can avoid accountability.

In September 2006, after my husband John returned from a tour of duty in Iraq, we were transferred to Savannah, Ga., where we bought our new home. The day before we moved in, we found numerous defects in the house during our walk through. We used two rolls of painter’s tape to mark all the defects, and the home builder’s customer service representative assured us that the defects would be corrected. The following day, my husband and I closed on our new house.

The house was to be a symbol of our stability and protection for our two children. It turned out to be a nightmare. Shortly after we moved in, the so-called “repair” work began and continued for several weeks; in truth, nothing was adequately repaired.

Over time, we noticed more defects, which we would point out to the home builder company. The customer service representative told us to note them and report them at the one year walk through. Over the course of the next several months we documented numerous defects. Ceramic tiles in our entry way and around the fire place were broken. Water leaked from the master shower and the bath tub. We noticed mold growing on the walls. The list goes on.

We had an appointment for the one year walk through in September 2007, two weeks prior to the one year date. The builder’s representative did not show up. The next day, I was told the representative forgot and made another appointment for three weeks after the one year date. I questioned this and was told, “It will be fine, we will take care of it.”

The new employee sent in to do the one year walk through arrived with one sheet of paper; we informed her that one sheet wouldn’t even get us through the living room. She assured us “whatever doesn’t get written down, put blue painter’s tape on the defects, point them out to the subcontractors, and they will take care of it.”

They did not take care of it. Months passed without a word, let alone a repair. Our original home inspector suggested we have a structural engineer perform a structural evaluation. The structural engineer documented poor workmanship and code violations.

After numerous meetings and conversations with the builder's representatives, we were again told they would repair the defects.

After many failed promises and failed work, in July 2008 we filed the necessary paperwork for arbitration – the only option available to us, thanks to the forced arbitration clause in our warranty. Out of the 182 defects we arbitrated to have the home builder repair, we were awarded 39 by an arbitrator. Of those 39, not one single item has been repaired because we have not received the $3,210 the builder offered to settle the dispute, nor does this amount come close to the $14,000 to $16,000 contractors have estimated we will actually need for repairs. The arbitration decision came down in October, just a few days before John deployed to Iraq again. The decision wasn’t fair or just, and made us both at that time figure out we were going to get nothing out of this process. John deployed and since that time I continue to fight to get our house fixed. 


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