NEW JERSEY NEW HOME WARRANTY ARBITRATION SERVICES, LLC.
ARBITRATION PROGRAM RULES
Applicability of Rules
These rules apply to arbitrations which arise under New Home Warranties provided to new home owners by either the State of New Jersey Department of Community Affairs (DCA) or by private warranty plans such as “2-10 Warranty” or “Residential Warranty Corporation (RWC).”
2. Arbitration Defined
Arbitration is a process where a neutral third party hears evidence from both sides and then renders a binding decision. The legal rules of evidence do not apply. There is no motion practice or court proceedings. However, the arbitrator can request the production of documents, witnesses and expert reports if he/she deems them necessary in the arbitration hearing. The benefits of arbitration include that it is confidential, informal, efficient, saves money compared to litigation, and has experts in the field deciding the cases.
3. The Role of New Home Warranty Arbitration Services, LLC
The role of New Home Warranty Arbitration Services (hereafter referred to as the “Administrator”) is to administer the arbitration program so that new home construction disputes will be resolved in a fair, prompt and efficient manner. The Administrator is a neutral entity that has no interest in the arbitration proceedings other than ensuring that the above procedural goals are met. Specifically, the Administrator’s role is to receive cases from the NJ State New Home Warranty Program or private warranty providers, send the cases out to qualified arbitrators, and send the final arbitration decision out to the parties and the warranty provider. The Administrator also provides annual training to the arbitrators and ensures that the appropriate qualifications for serving on the arbitration roster are met. The Administrator plays no part in determining the merits of a New Home Warranty claim. That function is solely under the jurisdiction of the arbitrator.
The Administrator will primarily use email to communicate with the parties and the Warranty provider. If a party does not have access to email the Administrator will communicate with that party via regular mail or overnight mail.
4. Initiation of the Arbitration Process
Arbitration is initiated by the homeowner by filing a request for arbitration with the NJ New Home Warranty program or private warranty provider in accordance with rules in the New Home Warranty document and within the time frames referenced in the limited warranty agreement. The NJ New Home Warranty Office or private warranty provider will then submit the dispute to the Administrator. The Administrator will then appoint an arbitrator to the case.
5. Arbitrator Appointment and Qualifications
A single arbitrator will serve in each matter. The arbitrators used to resolve New Home Warranty Disputes must satisfy certain regulations regarding their qualifications to handle new home construction matters. All arbitrators are required to receive annual training provided by the Administrator in order to remain on the roster of neutrals. The Administrator will appoint arbitrators from its approved roster of neutrals. Arbitrator appointment will be based on arbitrator qualifications, location and availability. The arbitrators must have one of the following credentials to serve in this program:
the arbitrator has proof of satisfactorily passing the course of study for building inspector (R.C.S.), as set forth in N.J.A.C. 5:23-5.20(d)1, and examination module 1A-building 1 and 2 family dwelling or
be licensed as a professional engineer or a registered/ licensed architect in any state or
hold a license as a sub code official in the state of New Jersey.
Arbitrators serving in matters involving a major structural defect claim must adhere to the qualifications outlined in N.J.A.C. 5:25-5.5(c)3i(1) and, when appropriate, N.J.A.C. 5:25-5.5(g)3ii, and, must be a licensed professional engineer or a registered/ licensed architect.
6. Conflict of Interest
The arbitrator must maintain complete neutrality at all times. A person appointed as arbitrator must disclose any potential conflict of interest, including any potential bias, financial interest, or any past relationship with any of the parties to the Administrator and parties immediately. This obligation to disclose remains in effect for the entire duration of the arbitration process. The Administrator will make the final determination regarding if a potential conflict of interest disqualifies the arbitrator from serving in a particular case.
7. Scheduling the Arbitration Hearing
The Administrator shall assign an arbitrator to the case and send the arbitrator the case file. The arbitrator will then reach out to both parties in the case by telephone to schedule the arbitration hearing. No discussion of the merits of the claim is allowed by either side or the arbitrator during this scheduling telephone call. All future communication with the parties will be conducted by email. It will be the responsibility of the parties to notify their attorneys and experts, if any, of the pending arbitration proceeding. Arbitration hearings will take place within 30 days of the scheduling calls unless both parties agree to an alternative schedule or unforeseen circumstances arise where the arbitrator or Administrator deems it appropriate to extend this time period. Arbitration hearings will take place during normal business hours on weekdays unless all parties and the arbitrator agree otherwise.
8. Postponement of Hearing
The arbitrator may postpone a scheduled hearing upon agreement of the parties, request of a party for good cause, or upon the arbitrator’s own initiative. All scheduling issues relating to the arbitration shall be decided by the arbitrator and the Administrator.
9. Location of Hearing
The hearing will be held at the house site to allow the arbitrator and the parties to inspect the claimed defects. The homeowner must allow the builder and arbitrator access to the home during the hearing.
10. Attendance at the Hearing
Any person having a direct interest in the arbitration is entitled to attend the hearing. This includes the homeowner, builder, warranty provider and their legal representatives. The arbitrator has the authority to decide if any other person should be allowed to attend the hearing. In state warranty cases, all parties must be present for the arbitration to take place. In private warranty plan cases, the arbitration may proceed without the builder if the builder declines to participate within the 30 day period.
11. Representation
Any party may be represented by counsel or other authorized representative. A party must give notice to the Administrator, arbitrator and other parties in the case seven days prior to the arbitration if an attorney or other professional will be attending the arbitration hearing.
12. Communication with Arbitrator
The arbitrator is not allowed to speak to any party in the matter without the other party being present. Any phone calls involving a party must have all other parties on the call as well. All scheduling matters must be conducted through email and copied to all parties in the case. Any evidence or documentation sent to the arbitrator must be copied to the other parties in the case. The arbitrator shall determine if these items shall be sent via email or by another method. After the arbitration hearing is concluded, any requests for clarification, modification or reopening of the hearing must be made in writing by email directly to the Administrator and copied to the other parties in the case and the arbitrator.
13. Submission of Evidence
The arbitrator will be provided with the case file and all documents sent to the Administrator by the NJ New Home Warranty Program or private warranty provider. Parties may choose to submit additional documents, pictures, videos or other evidence for the arbitrator’s consideration. This evidence must be submitted to the arbitrator and copied to the other parties in the case and the Administrator ten days prior to the hearing. If the evidence mentioned above is submitted late or not copied to the other side, the arbitrator has the discretion to disregard it in making his/her arbitration decision.
14. Confidentiality
The arbitration hearing will be confidential, and no stenographic record or other recording of the hearing will be allowed. However, the parties and their representatives may take notes during the arbitration hearing.
15. Conduct of Arbitration Hearing
The arbitration hearing will be conducted in a manner which will permit the parties a fair and efficient presentation of each of their cases. In cases involving a state issued warranty, the arbitrator will only conduct the hearing if both parties are present at the home in question. In cases involving a private warranty plan, the arbitrator may proceed without the builder present if the builder declines to participate within the 30 day period. The arbitrator has sole discretion to decide if a party, witness or expert can participate by phone or phone video.
The arbitrator will first ask the homeowner to present their evidence regarding the alleged defects and to show the arbitrator and builder where the alleged defects exist in the house. The builder (or Warranty Plan Representative if standing in the shoes of the builder), will then be asked to respond. Thereafter, witnesses and representatives may be heard at the discretion of the arbitrator.
16. Consideration of Evidence Presented
The arbitrator has the sole authority to determine the admissibility, relevance and weight that should be given to all evidence presented and may exclude evidence deemed by the arbitrator to be irrelevant or repetitive.
17. Concluding the Arbitration Hearing
The arbitrator will close the hearing once all parties have been heard in a fair and efficient manner. This determination shall be made solely by the arbitrator. In addition, the arbitrator has the discretion to end the arbitration hearing if a party is not participating in good faith or the arbitrator believes that a party or the arbitrator might be at risk of physical harm.
18. Post Arbitration Hearing Submissions
A party or parties may request that the arbitrator accept post arbitration submissions or evidence. This request must be made by email to the arbitrator and copied to all parties and the Administrator. It is the arbitrator’s sole discretion to determine if post arbitration submissions or evidence will be allowed. Under no circumstances will post arbitration submissions or evidence be allowed once the arbitration decision has been issued and sent out by the Administrator.
19. Arbitration Decision
After the arbitration hearing is concluded the arbitrator will consider all the evidence presented and issue a written arbitration decision which will be sent to the Administrator. The Administrator will then email a copy of the final decision to the NJ New Home Warranty Program or private warranty program and the parties. The arbitrator’s decision will be binding on both parties and is only reviewable to the extent provided by applicable state and federal arbitration laws.
20. Clarification or Modification of the Arbitration Decision
Within 10 days of the date of the emailing of the award, the homeowner, builder, or state warranty office may request a clarification or modification of the award by giving the Administrator written notice by email of the request and copying all parties and the arbitrator. The arbitrator is not empowered to reconsider the merits of any claim already decided but may clarify or modify the award if the arbitrator finds that the award is unclear or contains a clerical, typographical or computational error.
21. Interpretation and Application of the Rules
The Administrator has the sole authority to administer, interpret and amend these rules.
22. Court Review and Enforcement of Arbitration Decisions
Arbitration decisions cannot be appealed to the Administrator, NJ State New Home Warranty office, or private warranty provider. State and Federal arbitration laws govern the ability of a party to appeal an arbitration decision in court. Judicial enforcement of arbitration awards is also governed by state and federal arbitration law.
23. Subsequent Legal Proceedings
The Administrator and arbitrator shall not be considered a necessary or proper party in any judicial proceedings relating to the arbitration. Parties to an arbitration may not call the arbitrator or the Administrator as a witness in litigation or any other legal proceeding relating to the arbitration.
24. Entering Judgement in Court
Parties to an arbitration shall be deemed to have consented that judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.
25. Exclusion of Liability
Parties to an arbitration shall be deemed to have consented that neither the Administrator nor the arbitrator shall be liable to any party in any action for damages or injunctive relief for any act or omission in connection with any arbitration. Arbitrators are deemed to have quasi-judicial immunity and are independent contractors.