An exemption granted recently by the Federal Trade Commission will allow the Home Owners Warrantly Program of th National Association of Home Builders to continue to include conciliation as part of its dispute settlement procedure and to continue use of industry experts as conciliators.
Richard J. Canavan, president of the HOW Corp., said that a letter from the FTC granted an exemption from twor provisions of the Magnuson-Moss Consumer Improvement Act, which establishes mandatory federal standards for warranties on consumer products. These include the separate pieces of equipment sold as part of a new house. The home building industry is required to meet final implementation of that law, passed by Congress on Jan. 4, 1975, as of last Sunday.
An essential part of the HOW program, which was adopted several years ago by NAHB to provided a 10-year protection to new home buyers from insured participating builders, is a dispute-settlement procedure designed to resolve disagreements on warranty coverage between buyers and builders.
This procedure enables a home buyer, who cannot resolve his differences with the builder under the HOW insurance program, to request that a conciliator be appointed to help settle the dispute. The conciliator does not make a decision. Canavan said, but meets with the two parties in an effort to get them to resolve the disagreement between themselves.
Conciliators are drawn from panels of industry experts. The panels are set up by the 93 local HOW councils, including those now operating in Virginia and Maryland, to administer the program. More than 80 per cent of disputes between buyers and HOW builders are settled during this conciliation process, Canavan added.
If either party is not satisfied with the outcome of the conciliation, the buyer of builder may request that the case be submitted to advisory arbitration administered by the American Arbitration Association.
Canavan said that the recent FTC ruling exempts HOW from provisions of the Maguson-Mass legistion that prohibit the use of conciliation as part of a dispute settlement procedure and the use of a seller, servicer or manufacturer of any product in resolving disputes.
John B. Willmann