Bureau of Homeowner Protection v. Myles Incorporated

OAL Dkt. No. CAF 4799-99 (Bureau of Homeowner Protection 2000)
  • Opinion Date: January 12, 2000

CONTRACTORS; WARRANTY REGISTRATION—An arbitrator under the New Home Warranty program has the power to suspend a builder’s registration for failure to remedy violations.

A homebuilder constructed a house and the buyer of the house subsequently identified several deficiencies that required repair. The parties entered into arbitration to settle their disputes. Thereafter, the Bureau of Homeowner Protection conducted a follow-up inspection of the property and found that many of the deficiencies had not been repaired and were not in compliance. The homebuilder was given thirty days to remedy the deficiencies. A second inspection of the home, after the thirty days had passed, revealed that none of the deficiencies were remedied. The Bureau then solicited bids for the completion of the work and paid the homeowners the amount necessary for them to have the work completed. The State filed a notice of violation against the homebuilder and ordered suspension of its New Home Builder’s Registration. The homebuilder filed suit and the case was transferred to the Office of Administrative Law (OAL) for a hearing. The OAL held that because the parties submitted their disputes to arbitration, the decision of the arbitrator to suspend the builder’s registration was permissible. It held further that because the arbitrator found in favor of the homeowner, the arbitrator correctly prescribed that the builder correct the defects or make necessary replacements. Finally, it held that in the event that the builder defaulted, the homeowners could request payment from the State New Home Warranty Security Fund to have the repairs made.