[PA] Arbitration Clauses in Agreement of Sale

[pixelrogue1]

What is the name of your state? PA

On principle I never sign arbitration clauses.

I am in the early stages of buying a pre-constrction town home, and the sellers agreement includes two arbitration clauses.

I do not want to sign any arbitration clauses (not that I expect there to ever be the need,) yet why agree to limit your options.

The builders will likely refuse to adjust, and if I do not sign then I lose the purchase.

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Anyone with insight on how this works? If I want to purchase, and I forced to sign the clause? Is there anything for PA that would legally support the choice to not agree to arbitration? Are they allowed to force it in the agreement of sale?

 

[xylene]

You aren't being forced to do anything in this situation

1. You haven't even asked.

2. It's your principle. Standing on it is not them forcing you to do anything.

3. You are probably right. I wouldn't sign a clause like this on a preconstruction deal. And it isn't detached housing, expanding the risk.

 

[HRZ]

THat agreement was NOT written to protect you....either get skilled counsel on your side in equation before you sign or walk away ...

 

[Taxing Matters]

If I want to purchase, and I forced to sign the clause?

You are not “forced.” It’s like any other contract provision. If the builder won’t budge on the arbitration provision you have a choice of either agreeing to that to buy the property or you walk away.

Is there anything for PA that would negally support the choice to bot agree to arbitration? Are they allowed to force it in the agreement of sale?

I'm not sure exactly what you are asking here. (“Negally” is not a word, which confuses matters.) If you are asking if there is some consumer protection law you can rely upon to reject the clause but still get to buy the home or some law that makes arbitration clauses in such contracts unenforceable, the answer is no. Nor could any state enforce such a law anyway. Under a very old federal law known as the Federal Arbitration Act (FAA) courts must enforce nearly all arbitration agreements and states cannot do much to restrict arbitration agreements. California has tried to do that only to get smacked down by the Supreme Court for doing so.

As a result, the bottom line is what I said in my first paragraph above. If the builder insists on the arbitration clause, you have to decide how badly you want that house — do you want it badly enough to take the arbitration provision as part of the deal?

 

[pixelrogue1]

Yes, we want the house yet we will likely walk if the agreement of sale will not be adjusted.

 

[HRZ]

I repeat my suggestion that you use counsel to review and draft any changes you seek to protect you .....

 

[Taxing Matters]

Yes, we want the house yet we will likely walk if the agreement of sale will not be adjusted.

If you are looking to buy a new home you'd better check out the contracts offered by the major home builders in your area. You may find that pretty much all of them use arbitration clauses in their contracts. If that is the case, then you might find rejecting this home over that provision doesn't get you far.