How Drees Homes Uses This Clause
Drees Homes purchase agreements have been documented to include mandatory binding arbitration provisions. Disputes must go to private arbitration instead of court, typically using an arbitrator selected through a process the builder influences. Buyers lose their right to a jury trial, public proceedings, and in many cases the ability to appeal an unfavorable decision.
Mandatory arbitration is one of the most consequential provisions in a homebuilder contract because it determines the forum in which all other disputes will be resolved. If a buyer later discovers a defect or contract violation, the arbitration clause controls how that dispute is handled.
Because Drees Homes operates across multiple states, the enforceability of the arbitration clause varies by jurisdiction. Some states have examined arbitration provisions in homebuilder contracts and found them unconscionable under certain circumstances.
Builder-Specific Details
Determines Dispute Resolution for All Claims
The arbitration clause affects every other contract provision. If a dispute arises about habitability, warranty coverage, or deposit forfeiture, the arbitration clause determines where and how that dispute is resolved.
Combined with Class Action Waiver
The arbitration clause typically works in conjunction with the class action waiver, requiring each buyer to pursue claims individually in a private forum rather than joining with other affected homeowners.
Standard Form Contract
This clause appears in Drees Homes' standard purchase agreement. Buyers typically have limited ability to negotiate the arbitration terms, though requesting modifications in writing is advisable.
Legal History
The following cases involve Drees Homes's use of this clause type.
Construction Defect Arbitration Disputes
Court records document instances where Drees Homes has moved to compel arbitration in construction defect disputes. The outcomes of these motions depend on the specific contract language and applicable state law.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Drees Homes's operating states.
| State | Status | Note |
|---|---|---|
| Ohio | Likely Enforceable | Ohio generally enforces arbitration agreements under the Federal Arbitration Act, though courts examine unconscionability based on the totality of circumstances. |
| Kentucky | Uncertain | Kentucky courts enforce arbitration under the FAA, but the Kentucky Constitution includes a right to trial by jury that courts have weighed against adhesive arbitration provisions. |
| Indiana | Likely Enforceable | Indiana generally enforces arbitration clauses consistent with the Federal Arbitration Act and the Indiana Uniform Arbitration Act. |
| North Carolina | Likely Enforceable | North Carolina enforces arbitration agreements under both the FAA and the North Carolina Revised Uniform Arbitration Act. |
| South Carolina | Uncertain | South Carolina courts have examined arbitration provisions in homebuilder contracts and found some unconscionable, particularly when combined with other one-sided terms. |
| Texas | Likely Enforceable | Texas generally enforces arbitration clauses under both the Federal Arbitration Act and the Texas General Arbitration Act. |
| Maryland | Likely Enforceable | Maryland courts enforce arbitration agreements under the FAA and the Maryland Uniform Arbitration Act, though unconscionability may be examined. |
| Virginia | Likely Enforceable | Virginia courts enforce arbitration agreements under the FAA and the Virginia Uniform Arbitration Act. |
| Florida | Likely Enforceable | Florida courts enforce arbitration agreements under both the FAA and the Florida Arbitration Code, though unconscionability may be examined. |
Related Clauses in Drees Homes Contracts
This clause often works in combination with other provisions in Drees Homes's purchase agreements.
The class action waiver works with the arbitration clause to force individual dispute resolution in a private forum.
Disputes about the habitability waiver must be resolved in arbitration, limiting the buyer's ability to challenge it in court.
Deposit disputes must be resolved in arbitration rather than court, which may affect the buyer's ability to recover forfeited funds.
What Buyers Can Do
- Understand what you are giving up. By agreeing to mandatory arbitration, you waive your right to a jury trial, public proceedings, and in most cases the ability to appeal. Understand these trade-offs before signing.
- Request that the arbitration clause be removed or modified. Drees Homes may decline, but making the request in writing creates a record and demonstrates that the clause was not voluntarily agreed to.
- Review the arbitration provider and rules. The contract may specify a particular arbitration organization and set of rules. Research the costs, procedures, and track record of the specified provider.
- Consult an attorney before signing. A real estate attorney can explain how the arbitration clause interacts with other contract provisions and your state's laws, and advise on your options.