How Beazer Homes Uses This Clause
Beazer Homes purchase agreements have been documented to include monthly payment suppression / hidden costs provisions. Beazer previously operated Beazer Mortgage Corp., which was central to the DOJ's False Claims Act allegations. The DOJ found that Beazer Mortgage fraudulently charged interest discount points without reducing rates and funded improper down payment gifts through charities to inflate purchase prices. Buyers should scrutinize any affiliated lender arrangements and compare terms with independent lenders. This clause has been the subject of litigation, including United States v. Beazer Homes USA, Inc. (False Claims Act).
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because Beazer Homes operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
Beazer Homes'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 Deposit Forfeiture
Buyers who discover true costs after signing face forfeiting their deposit if they back out.
Standardized Across Markets
Beazer Homes's scale means contract templates are largely standardized across its operations. This clause identified in one state's contract is likely present in other states' contracts, though local addenda may modify the terms.
Standard Form Contract
This clause appears in Beazer Homes'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 Beazer Homes's use of this clause type.
United States v. Beazer Homes USA, Inc. (False Claims Act)
Beazer Homes and Beazer Mortgage Corp. agreed to pay $5 million plus contingent payments of up to $48 million to resolve False Claims Act allegations. The DOJ alleged Beazer Mortgage originated fraudulent FHA-insured mortgages by charging discount points without reducing interest rates, funding improper down payment gifts through charities to inflate home prices, and concealing branches involved in fraud from the FHA. A Deferred Prosecution Agreement provided for restitution to homeowner victims. Source: DOJ press release; FBI Charlotte field office.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Beazer Homes's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Uncertain | Texas does not have a specific statute addressing monthly payment suppression in new construction... |
| Florida | Uncertain | Florida does not have a specific statute addressing monthly payment suppression in builder... |
| Arizona | Uncertain | Arizona does not have a specific statute addressing monthly payment suppression in builder... |
| California | Likely Unenforceable | California has some of the strongest consumer protection statutes in the country, and its Mello-Roos... |
| Georgia | Uncertain | Georgia does not have a specific statute addressing monthly payment suppression in builder... |
| North Carolina | Uncertain | North Carolina does not have a specific statute addressing monthly payment suppression in builder... |
| South Carolina | Uncertain | South Carolina does not have a specific statute addressing monthly payment suppression in builder... |
| Indiana | Uncertain | Indiana does not have a specific statute addressing monthly payment suppression in builder... |
| Tennessee | Uncertain | Tennessee does not have a specific statute addressing monthly payment suppression in builder... |
| Virginia | Uncertain | Virginia does not have a specific statute addressing monthly payment suppression in builder... |
| Maryland | Uncertain | Maryland does not have a specific statute addressing monthly payment suppression in builder... |
| Nevada | Uncertain | Nevada does not have a specific statute addressing monthly payment suppression in builder marketing.... |
| Delaware | Uncertain | Delaware does not have a specific statute addressing monthly payment suppression in builder... |
Related Clauses in Beazer Homes Contracts
This clause often works in combination with other provisions in Beazer Homes's purchase agreements.
Buyers who discover true costs after signing face forfeiting their deposit if they back out.
Closing penalties discourage buyers from delaying to investigate payment discrepancies.
The affiliated lender may present suppressed payment estimates, and incentives encourage buyers to use that lender.
What Buyers Can Do
- Independently verify your projected monthly payment. Do not rely solely on estimates from the builder's affiliated lender. Get a loan estimate from at least one independent lender for comparison.
- Ask about temporary rate buydowns. Determine whether any quoted rate includes a temporary buydown that will expire, causing your payment to increase after the introductory period.
- Review the United States case. The United States v. Beazer Homes USA, Inc. (False Claims Act) ruling may be relevant to your situation. If you are buying a Beazer Homes 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 Beazer Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.