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Two recent decisions from the Fourth Appellate District of the California Court of Appeal held that (i) the court, not an arbitrator, can decide whether the arbitration provision in an HBW 2-10 Warranty is enforceable, and (ii) the arbitration provision in an HBW 2-10 Warranty was unconscionable and thus unenforceable. In light of these recent decisions, homebuilders should have their sales agreements reviewed by an attorney to make sure that any HBW 2-10 Warranty arbitration provisions are as legally enforceable as possible. Otherwise, if a homebuyer asserts a claim against a homebuilder for construction defects, that dispute will likely be resolved in a court of law before a judge and a jury, and not through arbitration.
