A.L.M.A. has received complaints from clients of the City
of Austin, alleging that some of the affordable housing program contracts may contain a binding arbitration clause.
Binding arbitration means that the right to file suit in a public court has been waived.
If there is a binding arbitration clause and the contract is broken by either the City or its contractor, then the
rights of the consumer / homeowner to seek relief under the law may be restricted. Normally, a privately contracted
arbitrator, is chosen by the other party selling the loan &/or service (i.e. The City). This private arbitrator
rules on the dispute. The rulings are typically final with no option for an appeal.
Public Entities such as The City are afforded certain protections under Sovereign immunity. This can potentially compromise
a client's ability to seek relief under the law also.
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