[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4037 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4037

To prohibit offering homebuilding purchase contracts that contain in a 
   single document both a mandatory arbitration agreement and other 
contract provisions, and to prohibit requiring purchasers to consent to 
a mandatory arbitration agreement as a condition precedent to entering 
                 into a homebuilding purchase contract.


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                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 2005

 Mr. Gonzalez introduced the following bill; which was referred to the 
                    Committee on Financial Services

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                                 A BILL


 
To prohibit offering homebuilding purchase contracts that contain in a 
   single document both a mandatory arbitration agreement and other 
contract provisions, and to prohibit requiring purchasers to consent to 
a mandatory arbitration agreement as a condition precedent to entering 
                 into a homebuilding purchase contract.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Homebuyers Protection 
Act''.

SEC. 2. MANDATORY ARBITRATION AGREEMENTS.

    (a) In General.--No person engaged in the construction of new 
houses may require a purchaser to enter into a mandatory arbitration 
agreement as a condition precedent to entering into a contract for the 
purchase of a new house.
    (b) Separate Documents Required.--No person engaged in the 
construction of new houses may offer a purchaser a contract for the 
purchase of a new house which includes an agreement on mandatory 
arbitration unless such agreement is a separate document which contains 
only language pertaining to the mandatory arbitration agreement. The 
separate document containing the mandatory arbitration agreement shall 
also contain the following statement: ``By Agreeing to Binding 
Arbitration You Are Giving Up Your Right To Go To Court''.
    (c) Arbitrator.--The mandatory arbitration agreement shall not name 
an independent arbitrator and shall contain a procedure that adequately 
guarantees the purchaser an opportunity to participate in the selection 
of an arbitrator which shall occur only after a dispute regarding the 
homebuilding contract has arisen.
    (d) Enforcement.--If any person violates subsection (a), (b), or 
(c), the agreement on mandatory arbitration will be of no effect.
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