Mobile Home Mania? Protecting Procedurally Fair Arbitration in a Consumer Microcosm

Abstract

Consumers' lack of warranty remedies prompted Congress to enact the 2000 Manufactured Housing Improvement Act (MHIA). Under the Act, the Office of Housing and Urban Development (HUD) must develop a program for resolving MH warranty disputes by the end of 2005. This article provides input regarding that program. It also calls for broader protection of procedural fairness in arbitration of disputes regarding warranties for mobile or manufactured homes (referred to in the article as MHs for ease of reference). Although HUD's program aims to create a process for resolving warranty disputes among manufacturers, dealers and installers, this article proposes that Congress expand the MHIA to require minimum fairness standards for arbitration of MH consumer claims. More importantly, perhaps, the article suggests arbitration reforms that may be appropriate not only in the MH microcosm, but also in other uneven bargaining contexts.

Keywords: arbitration, consumer protection, warranties, manufactured housing, dispute resolution

JEL Classification: K40, K41, K23, K11