Q: We are having a serious problem with our builder, who is refusing to honor his warranties. We have consulted with a lawyer who has indicated that we have a good case, but that it would be very expensive for us to take the builder to court. Isn't there any other remedy available to the already financially strapped homeowner rather than filing an expensive lawsuit?
A: In the words of Voltaire, both the rich and the poor have the right to sleep under the bridges of the river Seine.
Unfortunately, it's the same in our legal system. The rich and the poor have access to the courts, but unfortunately it's often only the rich who can afford this expensive -- and time-consuming -- process.
Consider the following possibilities. Discuss a contingency fee with your lawyer. Under this arrangement, the lawyer may take a partial retainer, and if you are successful in the suit, either by way of a judgment or a settlement, the lawyer will take a percentage (between one-third and one-half) of any recovery. This contingency method may be acceptable to your lawyer, and if it is not, you may want to look around for another law firm that is willing to take your case on a contingency basis.
It may also be possible that other people in your area have similar problems with the same developer. This is especially true if you are living in a subdivision, where there is one developer.
Attempt to organize your neighbors so that all of you can join in a lawsuit and utilize the services of one lawyer. You could pool your resources and be able to obtain good legal service.
You may also want to go to the consumer protection office in your area. While many of these offices do not have authority to look into housing-related matters, you may find a sympathetic ear, and perhaps get some assistance. Additionally, the attorney general's office (or the corporation counsel in the District) may be interested in hearing about your complaints, if there are any allegations of fraud or criminal misrepresentations.
Finally, you might want to explore arbitration. This is a procedure whereby both parties agree to be bound by the decision of a neutral arbitrator. The arbitrator should not be selected by the home-building industry or by the real estate industry, but should be under the auspices of a professional organization such as the American Arbitration Association.Both parties must agree, however.
However, here is a tip for home buyers: Insert a provision in your contract that if there is a dispute relating to any matter arising under the contract, including but not limited to warranty items, both sides will go to binding arbitration in accordance with the rules of the arbitration association.
Additionally, your home may be covered under the Home Owners Warranty (HOW) Program, which was begun by the National Association of Home Builders. Read your warranty items carefully, because the HOW program does offer some assistance to people with your kind of problem.