Home Warranties Under Fire in South Carolina

May 27, 2009

A coalition of about 70 consumer and justice groups have sent a letter to South Carolina Attorney General Henry McMaster asking him to investigate home warranties they think violate state law.

Fair Arbitration Now says builders often give homeowners a warranty as a gift, but the agreements often exclude large classes of defects and force the homeowners into arbitration if they have a dispute.

The group says the practice violates a part of state law that prohibits forced arbitration in insurance contracts. The organization has also sent letters to officials in 16 other states.

National Association of Home Builders legal affairs vice president David Jaffe says the warranties are voluntary and arbitration saves money and time over lawsuits.