How Ashton Woods Uses This Clause
Ashton Woods purchase agreements have been documented to include deposit forfeiture / earnest money trap provisions. The contract permits the builder to retain the buyer's earnest money deposit if the buyer cannot close for reasons outside the agreement's limited contingencies. In a documented case, an Orlando buyer lost a $33,000 deposit after losing her job and failing to qualify for a mortgage; Ashton Woods offered only a future credit toward another home purchase within one year. Source: WFTV Action 9 investigation; BBB complaint records. This clause has been the subject of litigation, including WFTV Action 9 Investigation — Orlando Deposit and Contract Terms.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Ashton Woods's scale means contract templates are largely standardized across its operations. A clause identified in one market's contract is likely present in other markets' contracts, though local addenda may modify the terms.
Builder-Specific Details
Combined with Mandatory Arbitration
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Standard Form Contract
This clause appears in Ashton Woods's standard purchase agreement, which is generally presented on a take-it-or-leave-it basis. Buyers typically have limited ability to negotiate individual terms, though making the request in writing is still advisable.
Legal History
The following cases involve Ashton Woods's use of this clause type.
WFTV Action 9 Investigation — Orlando Deposit and Contract Terms
WFTV's Action 9 unit investigated complaints from buyers who signed Ashton Woods contracts and lost deposits of up to $33,000 when they could not close. The investigation documented the builder's mandatory arbitration clause, class action waiver, and the binding effect of contract terms on successive homeowners. A real estate attorney who reviewed the contract confirmed it was drafted to protect the builder with no deposit refund for mortgage denial. Source: WFTV Action 9.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Ashton Woods's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Deposit forfeiture clauses in new construction contracts are generally enforceable in Texas when... |
| Florida | Likely Enforceable | Florida courts generally enforce deposit forfeiture provisions in new construction contracts when... |
| Georgia | Likely Enforceable | Georgia courts enforce liquidated damages provisions when the amount is a reasonable pre-estimate of... |
| Arizona | Likely Enforceable | Arizona courts enforce deposit forfeiture clauses as liquidated damages when the amount is... |
| North Carolina | Likely Enforceable | North Carolina courts enforce liquidated damages provisions, including deposit forfeiture in new... |
| South Carolina | Likely Enforceable | South Carolina courts enforce liquidated damages provisions in real estate contracts when the amount... |
Related Clauses in Ashton Woods Contracts
This clause often works in combination with other provisions in Ashton Woods's purchase agreements.
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Incentives tied to using the preferred lender may be lost if the buyer switches lenders, and the deposit terms may reflect this.
Closing penalties can create pressure to close quickly, and failure to close may trigger deposit forfeiture.
Buyers who discover hidden costs after signing may face deposit forfeiture if they attempt to cancel.
What Buyers Can Do
- Understand exactly when your deposit becomes non-refundable. The contract may specify triggers that make the deposit non-refundable before you expect. Read the forfeiture conditions carefully.
- Know the cancellation provisions. Review what happens to your earnest money if you need to cancel. Ashton Woods's contract may allow deposit retention even in circumstances beyond your control.
- Review the WFTV Action 9 Investigation — Orlando Deposit and Contract Terms case. The WFTV Action 9 Investigation — Orlando Deposit and Contract Terms ruling may be relevant to your situation. If you are buying a Ashton Woods home in a state with similar legal protections, this precedent could affect the enforceability of this clause.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Ashton Woods contracts that collectively limit buyer remedies. A contract scan can identify all of them.