Enforceability Status
Mandatory arbitration clauses in Florida new construction contracts are likely enforceable. Florida has adopted the Florida Arbitration Code (Fla. Stat. Ch. 682), which mirrors the pro-arbitration framework of the Federal Arbitration Act. Florida courts have consistently enforced arbitration provisions in residential construction agreements.
Legal Analysis
The Federal Arbitration Act (FAA), 9 U.S.C. sections 1-16, applies to arbitration agreements in contracts involving interstate commerce. National homebuilders operating in Florida engage in interstate commerce, bringing their purchase agreements within the FAA's scope. The FAA preempts state laws that would place arbitration agreements on unequal footing with other contracts.
Florida's Arbitration Code, codified at Fla. Stat. Ch. 682 (revised in 2013 to align with the Revised Uniform Arbitration Act), provides a comprehensive statutory framework supporting the enforcement of written arbitration agreements. The statute establishes that arbitration agreements are valid, irrevocable, and enforceable except upon grounds that exist at law or in equity for the revocation of any contract.
Florida courts have addressed arbitration in construction disputes on multiple occasions. In Seifert v. U.S. Home Corp. (Fla. 4th DCA, 2000), the court enforced an arbitration provision in a new home purchase agreement, finding that the buyer had agreed to the terms and that no recognized defense to enforcement existed. Florida's appellate courts have generally rejected broad unconscionability challenges to arbitration clauses in builder contracts.
Florida's statutory framework for residential construction defects, found in Fla. Stat. section 558.001 et seq. (the Florida Construction Defect statute), establishes a pre-suit notice and cure process. This statutory process operates alongside contractual arbitration provisions. Buyers should be aware that complying with Chapter 558 notice requirements may be necessary before initiating arbitration.
Relevant Florida Law
Establishes a national policy favoring arbitration and preempts state laws that discriminate against arbitration agreements.
Provides that written arbitration agreements are valid, irrevocable, and enforceable, subject to generally applicable contract defenses.
Establishes pre-suit notice and opportunity to cure requirements for residential construction defect claims. Compliance may be required before initiating arbitration.
Related Cases
The court enforced an arbitration clause in a new home purchase agreement, rejecting the buyer's argument that the clause was unconscionable.
The court addressed the enforceability of class action waivers in arbitration agreements, finding them enforceable under the FAA framework.
Builders in Florida Using This Clause
What Florida Buyers Should Know
- Comply with Chapter 558 Pre-Suit Requirements Florida law requires buyers to provide written notice to the builder and allow an opportunity to inspect and cure defects before filing a construction defect claim. This requirement may apply before initiating arbitration proceedings.
- Review the Arbitration Provision Carefully Determine the scope of disputes covered, the designated arbitration provider, and any limitations on remedies. Some clauses restrict the types of damages recoverable in arbitration.
- Assess the Fee Structure Arbitration filing fees and arbitrator compensation can be significant. Review whether the contract allocates costs and whether the builder has agreed to bear a portion of the expenses.
- Document All Construction Issues Thoroughly Maintain detailed records of construction defects, communications with the builder, and any inspection reports. Documentation is critical in arbitration proceedings where formal discovery may be limited.