How Kolter Homes Uses This Clause
Kolter 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.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because Kolter Homes operates in Florida and South Carolina, the enforceability and practical impact of this clause varies depending on where the home is located.
Kolter Homes uses standardized contract templates across its luxury and active-adult communities. A clause identified in one community's contract is likely present in other communities' contracts, though local addenda may modify the terms.
Builder-Specific Details
Combined with Habitability Waiver
Challenges to the habitability waiver must be pursued in arbitration rather than court.
Luxury and Active-Adult Communities
Kolter Homes focuses on luxury and active-adult communities. Higher-value disputes may make arbitration costs more significant relative to the amounts at stake.
Standard Form Contract
This clause appears in Kolter Homes' standard purchase agreement, which is generally presented on a take-it-or-leave-it basis. Buyers typically have limited ability to negotiate individual terms, though making the request in writing is still advisable.
Legal History
The following cases involve Kolter Homes's use of this clause type.
Kolter Homes Arbitration Disputes (Florida)
Court records document disputes involving Kolter Homes and the enforceability of arbitration provisions in Florida. Florida courts generally enforce arbitration clauses, though provisions found to be unconscionable may be invalidated.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Kolter Homes's operating states.
| State | Status | Note |
|---|---|---|
| Florida | Likely Enforceable | Mandatory arbitration clauses in Florida new construction contracts are likely enforceable. Florida courts generally uphold arbitration agreements under the Federal Arbitration Act and Florida's Arbitration Code, though provisions that are unconscionable may be challenged. |
| South Carolina | Uncertain | The enforceability of mandatory arbitration clauses in South Carolina new construction contracts is uncertain. The South Carolina Supreme Court has found arbitration agreements in adhesion contracts unconscionable when there is an extreme imbalance of bargaining power between the builder and individual homebuyers. |
Related Clauses in Kolter Homes Contracts
This clause often works in combination with other provisions in Kolter Homes's purchase agreements.
Challenges to the habitability waiver must be pursued in arbitration rather than court.
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
Disputes over deposit forfeiture must be resolved through arbitration, where the cost of pursuing a claim may exceed the deposit amount.
What Buyers Can Do
- Understand the arbitration process before signing. Review which arbitration provider is specified, who selects the arbitrator, and whether you have any right to appeal. These details significantly affect the fairness of the process.
- Research the arbitration provider's track record. The specified arbitration provider may have a history with builder disputes. Understanding the provider's procedures and typical outcomes can help you prepare.
- Request removal of the arbitration clause. Kolter Homes may decline, but making the request in writing creates a record of your objection, which could be relevant if the clause is later challenged.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Kolter Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.