Enforceability Status
Arkansas does not have a specific statute addressing monthly payment suppression in builder marketing. The Arkansas Deceptive Trade Practices Act (ADTPA) provides a framework for challenging deceptive business practices, including misleading payment advertising by builders.
Legal Analysis
Monthly payment suppression in Arkansas occurs when builders advertise a monthly payment that excludes predictable recurring costs such as property taxes, HOA dues, and homeowners insurance. Arkansas has a homestead tax credit under Ark. Const. Amendment 79 that provides a property tax credit for homesteads, but this credit has specific eligibility requirements.
The Arkansas Deceptive Trade Practices Act (ADTPA), Ark. Code Ann. Section 4-88-107, prohibits deceptive and unconscionable trade practices. The ADTPA prohibits knowingly making a false representation as to the characteristics or benefits of goods or services. A builder advertising a monthly payment that omits substantial known costs could face liability under this statute.
Arkansas assesses residential real property at 20% of appraised value under Ark. Const. Amendment 79. The Amendment also caps annual increases in assessed value at 5% for homesteads and 10% for other properties. Newly constructed homes are assessed at their full appraised value, and the millage rate applied varies by school district and other taxing jurisdictions.
Federal TILA and RESPA requirements apply to lender disclosures but do not directly regulate builder marketing materials.
The Arkansas Attorney General's Consumer Protection Division has authority to investigate complaints about deceptive trade practices.
Relevant Arkansas Law
Prohibits deceptive and unconscionable trade practices, including false representations about characteristics or benefits of goods and services.
Establishes a 20% assessment ratio for residential property and provides a homestead tax credit, with caps on annual assessment increases.
Federal law requiring creditors to disclose credit terms when advertising credit. Applies primarily to creditors rather than home builders.
Builders in Arkansas Using This Clause
What Arkansas Buyers Should Know
- Verify the homestead tax credit assumptions Arkansas provides a homestead tax credit under Amendment 79. Confirm whether the builder's advertised payment assumes this credit and whether you will qualify for it.
- Request a total monthly cost breakdown Before signing a purchase agreement, obtain a written breakdown including principal, interest, property taxes at the applicable millage rate, HOA dues, homeowners insurance, and any other recurring fees.
- Understand the assessment ratio Arkansas assesses residential property at 20% of appraised value. Confirm what appraised value and millage rate the builder used in any payment estimate.
- File a complaint if advertising was misleading If a builder's advertised payment materially omitted known recurring costs, you may file a complaint with the Arkansas Attorney General's Consumer Protection Division.