I 

110TH CONGRESS 

1ST SESSION H. R. 1519 

To prohibit offering homebuilding purchase contracts that contain in a single 

document both a mandatory arbitration agreement and other contract 

provisions, to prohibit requiring purchasers to consent to a mandatory 

arbitration agreement as a condition precedent to entering into a homebuilding purchase contract, and to provide for the Federal Trade Commission to enforce violations of such prohibitions as unfair and deceptive 

acts or practices under the Federal Trade Commission Act. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2007 

Mr. GONZALEZ introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To prohibit offering homebuilding purchase contracts that 

contain in a single document both a mandatory arbitration agreement and other contract provisions, to prohibit 

requiring purchasers to consent to a mandatory arbitration agreement as a condition precedent to entering into 

a homebuilding purchase contract, and to provide for 

the Federal Trade Commission to enforce violations of 

such prohibitions as unfair and deceptive acts or practices under the Federal Trade Commission Act. 


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•HR 1519 IH

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Homebuyers 

5 Protection Act’’. 

6 SEC. 2. MANDATORY ARBITRATION AGREEMENTS. 

7 (a) IN GENERAL.—No person engaged in the con8 struction of new houses may require a purchaser to enter 

9 into a mandatory arbitration agreement as a condition 

10 precedent to entering into a contract for the purchase of 

11 a new house. 

12 (b) SEPARATE DOCUMENTS REQUIRED.—No person 

13 engaged in the construction of new houses may offer a 

14 purchaser a contract for the purchase of a new house 

15 which includes an agreement on mandatory arbitration 

16 unless such agreement is a separate document which con17 tains only language pertaining to the mandatory arbitra18 tion agreement. The separate document containing the 

19 mandatory arbitration agreement shall also contain the 

20 following statement: ‘‘By Agreeing to Binding Arbitration 

21 You Are Giving Up Your Right To Go To Court’’. 

22 (c) ARBITRATOR.—The mandatory arbitration agree23 ment shall not name an independent arbitrator and shall 

24 contain a procedure that adequately guarantees the pur25 chaser an opportunity to participate in the selection of an 


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•HR 1519 IH

1 arbitrator which shall occur only after a dispute regarding 

2 the homebuilding contract has arisen. 

3 (d) ENFORCEMENT.—In the case of any violation of 

4 subsection (a), (b), or (c), the agreement on mandatory 

5 arbitration involved in the violation shall be of no force 

6 or effect. 

7 SEC. 3. ENFORCEMENT BY FEDERAL TRADE COMMISSION. 

8 (a) UNFAIR OR DECEPTIVE ACTS OR PRACTICES.— 

9 A violation of subsection (a), (b), or (c) of section 2 shall 

10 be treated as an unfair and deceptive act or practice in 

11 violation of a regulation under section 18(a)(1)(B) of the 

12 Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) 

13 regarding unfair or deceptive acts or practices. 

14 (b) POWERS OF COMMISSION.—The Commission 

15 shall enforce this Act in the same manner, by the same 

16 means, and with the same jurisdiction, powers, and duties 

17 as though all applicable terms and provisions of the Fed18 eral Trade Commission Act (15 U.S.C. 41 et seq.) were 

19 incorporated into and made a part of this Act. Any person 

20 who violates such regulations shall be subject to the pen21 alties and entitled to the privileges and immunities pro22 vided in that Act. 

Æ 


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