NEW YORK — The American Arbitration Association announced June 1 the launch of its Home Construction Arbitration Rules and Mediation Procedures, a new process implemented specifically for residential construction. AAA said that as its residential construction caseload continues to grow, these rules have been put in place to better address issues and disputes between builders and homeowners. The rules incorporate the Consumer Due Process Protocol, a set of principles that establish benchmarks for conflict resolution processes involving consumers.
"The home construction rules are the first of their kind, designed specifically for home construction disputes," Senior Vice President India Johnson said. "These rules will provide both parties with fair and costeffective mediation and/or arbitration of their dispute with processes in place that result in significant cost and time savings as compared to traditional litigation."
Rules are designed specifically for home-construction disputes. Neutrals serving in these disputes are construction and real estate law experts. Claims filed by homeowner signatories to the contract, for purpose of the arbitration, are considered one claimant or one counterclaimant.
Claims and counterclaims are divided into three levels so that the process can fit the size of the claim, saving time and money for all concerned, AAA said. They are:
Level 1 claims — No claim or counterclaim exceeds $10,000. For Level 1 claims, either party can opt to file its claim in Small Claims Court if the claim or counterclaim is within the jurisdictional limits of such a court.
Level 2 claims — Claims or counterclaims are greater than $10,000 but not more than $75,000.
Level 3 claims — Claims or counterclaims are greater than $75,000 or are non-monetary.
Arbitration options include documents-only hearings, telephone and in-person hearings.
Additional information is available at www.adr.org; click on "Rules Updates."