Posted by Wes Johnson Are points like this a big deal? Does the company really intentionally mislead you – that is, are they genuinely aware of the legal realities? Maybe you feel that possibly the employees don’t understand the meaning of the language themselves. When we later had problems with our home, however, and threatened to seek out legal remedies when company representatives had abused our trust repeatedly, the Clayton Homes Regional Manager literally laughed at me and told me point blank: "You signed a legal contract. You can’t sue us." I've no more space to delve into this further other than to add a quote from John Taylor's website (The American Internet Society of Manufactured Home Owners, or TAISMHO: http://www.taismho.com/) by one of our founding fathers, James Madison, "In suits at common law, between man and man, the trial by jury, as one of the best securities to the rights of the people, ought to remain inviolate." That pretty well puts the matter into perspective -- these large companies are taking our most fundamental rights away, and our government is letting them. Other aspects of the negotiations were troublesome as well. The transaction is set up to "encourage" you to use their services. Our dealership refused to take a letter of acceptance from a bank, which in effect forced us to use Vanderbilt Mortgage (a subsidiary of Clayton Homes) to finance our home or spend thousands of extra dollars. Then, to get the best rate, we had to take out not only insurance with the HomeFirst Agency (another Clayton subsidiary), but buy a Home Buyer Protection Policy through them as well. That’s right, if we didn’t use the insurance products they suggested to us, we would be punished with a substantially higher mortgage rate which would have again cost us thousands of dollars. We felt like we were being blackmailed. Of course we would be paying interest on the costs of all this insurance as well – more money which would wind up in Clayton’s coffers. At first the Clayton Homes’ insurance quote (HomeFirst/Voyager) looked pretty competitive. When we actually received the policy and read the fine print, however, we found out it was terrible! The bank (in this case Clayton Homes) was well protected, but the home buyer was not. For example, where most companies will normally group personal effects into jewelry, silverware, electronics, CD collections, firearms, computers/software, and so on into categories which each has a cap such as $500 (and optionally let you pay more to increase this amount), our HomeFirst policy put a $250 cap on each individual category and a $500 total limit on all of them. If someone came in and stole every personal item in the home listed above, the policy would pay $500 minus the $250 deductible, or just $250! If someone came in and just stole a $2,000 wedding ring, your $500 college ring, and whatever other jewelry they could find, because of the caps and the deductible the insured would be entitled to nothing. I’ll briefly discuss the subject of actual physical problems we had with our home(s) now. Lest you feel I’m being overly pessimistic attitude at the outset, allow me to explain what our manufacturer’s Regional Manager told us after we had encountered numerous quality problems in our new home and after we had complained repeatedly about false promises. This manager stated with a wide grin in a rare moment of candor – "What do you expect us to tell you [when you’re shopping for a home on a Clayton lot], we are trying to sell you something." The grinning was especially irksome because we were standing in our new kitchen next to a pool of water several feet in diameter on the floor, while more water dripped down out of the ceiling through a light fixture. This Regional Manager not only showed disdain for our plight, he seemed to revel in it. He had the money, he had won and we had lost. His smirk seemed to indicate "so what if they now know the horrible truth about how we do business? We got ‘em." That leak resulted from the dealership refusing to cover up vents which were knocked off during the home’s delivery for weeks – despite the fact we reminded them about the missing vents repeatedly. Within two weeks of the water entering our roof cavity, our ceilings began to split open in numerous places. (The dealership assured us no damage was done, however!) In the replacement home we eventually had to receive, we had five more water leaks in addition to several more leaks in the septic lines under the house because the septic’s end caps weren’t tightened (allowing a rather unpleasant smell to surround our new home). These leaks included a major roof leak (which let many gallons of water into our bathroom floor and the exterior wall during one hard rain storm), a leak around the shower stall, a loose fitting on the refrigerator water line, a defective faucet (which sprayed water into the wall cavities) in the guest bath, and a leak in a water line under the home caused when a staple or nail had penetrated the line at the factory. This latter leak didn’t show up for over a week; I spotted it while inspecting for problems underneath the home. Many more gallons of water had accumulated in our "belly board" (in the plastic which holds the insulation under the floor), soaking our insulation and soaking the floor joists. The only clue was the sound of a slow drip under the house. I couldn’t visually spot it until my knee sank into several inches of water which had amassed under the vapor barrier over the ground. The result of this negligence? Mold, mildew, and ruined insulation. During our "walk-throughs" to check for potential problems, we found a number of bathroom cabinets that had edges which appeared to be very rough. We only were able to notice them because of our flashlights. (Walk-throughs are usually done with no electricity.) We complained about the appearance to Spanky (not his real name), the Regional Manager. On our next walk-through Spanky told us a crew came all the way to South Carolina from Tennessee and replaced the entire cabinets for us. They did look much better. However, we compared digital photographs we had taken using flashlights and the camera flash on the first walk-through to photos of the "new" cabinets. The cabinets were identical, right down to every swirl in the wood grain! The only difference was that they had added the missing trim pieces which covered the rough edges. I asked Spanky if he was positive the cabinets had been totally replaced, and he assured me with a smile he had personally supervised the change!
Link: The Manufactured Home Buyer's Handbook
on 3/8/2005, 2:43 pm
209.215.39.7
In short, the customer is waiving substantial legal rights in signing the contract, giving up "judicial relief" for binding arbitration. The company is giving itself a safety blanket, avoiding any chance of costly litigation/lawsuits no matter what actions they might take or omit to take in the sale and set up of the home. Furthermore, the buyer is agreeing to settle any disputes by an arbitrator of the seller’s choice. At the same time, note that the seller (in this case Clayton Homes, Inc.) carefully reserves the right to sue the customer. It’s pretty obvious which of the two parties involved crafted this document. We complained to the dealership’s General Manager when he glossed over this point in going over the contract with us; we made it known we didn’t like the provision. Apparently, someone else had complained before because he had a ready-made spiel: "This is America. Everybody has the right to sue!" He went on to explain that this provision was mainly to keep the customer’s cost down in the event there was a problem, so they wouldn’t need to hire attorneys. He added that if we weren’t happy with the results of arbitration, we were free to take the manufacturer or the dealership where we purchased the home to court and sue them. He insisted this was the case even when we asked him to explain what "binding" arbitration meant. In other words, the general manager looked us straight in the eye and unequivocally lied to us regarding this legal document. When it came time to record our understanding and agreement, we kept trying to get his "clarification" of the arbitration language on tape (ie. that we did in fact have the right to take them to court if they were dishonest or negligent), but he didn’t want to record that part. 
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