How D.R. Horton Uses This Clause
D.R. Horton purchase agreements have been documented to include daily closing penalty provisions. If the buyer cannot close by the specified date, the contract imposes per-day financial penalties that can accumulate rapidly. These penalties apply even when the delay is caused by the builder's own lender or last-minute changes to closing documents. This clause has been the subject of litigation, including Santiago v. D.R. Horton.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because D.R. Horton operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
D.R. Horton'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
Together these create dual financial pressure — daily penalties plus potential deposit loss — to force closing.
Standardized Across Markets
D.R. Horton'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 D.R. Horton'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 D.R. Horton's use of this clause type.
Santiago v. D.R. Horton
A RICO case in which the plaintiff alleges that monthly mortgage payments increased by nearly $1,000 less than a year after closing. The complaint alleges the builder and affiliated lender structured the transaction to conceal the true cost of homeownership.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects D.R. Horton's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Daily closing penalty clauses in Texas new construction contracts are generally enforceable when... |
| Florida | Likely Enforceable | Daily closing penalty provisions in Florida new construction contracts are generally enforceable... |
| South Carolina | Likely Enforceable | Daily closing penalty clauses in South Carolina are generally enforceable as liquidated damages when... |
| North Carolina | Likely Enforceable | Daily closing penalty provisions in North Carolina new construction contracts are generally... |
| Arizona | Likely Enforceable | Daily closing penalty clauses are generally enforceable in Arizona when structured as liquidated... |
| Georgia | Likely Enforceable | Georgia generally enforces per-diem closing penalty provisions when structured as liquidated... |
| Colorado | Likely Enforceable | Colorado courts generally enforce per-diem closing penalty provisions when they qualify as... |
| Nevada | Likely Enforceable | Daily closing penalty clauses in Nevada are generally enforceable as liquidated damages when the... |
| California | Uncertain | California applies heightened scrutiny to liquidated damages provisions in residential real estate... |
| Virginia | Likely Enforceable | Virginia courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Tennessee | Likely Enforceable | Tennessee courts generally enforce per-diem closing penalty provisions when they qualify as... |
| Alabama | Likely Enforceable | Alabama courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Maryland | Uncertain | Maryland applies careful scrutiny to liquidated damages provisions in residential contracts.... |
| Louisiana | Likely Enforceable | Louisiana, as a civil law jurisdiction, addresses penalty clauses through its Civil Code rather than... |
| Hawaii | Uncertain | Hawaii courts apply heightened scrutiny to liquidated damages provisions in residential contracts.... |
Related Clauses in D.R. Horton Contracts
This clause often works in combination with other provisions in D.R. Horton's purchase agreements.
Together these create dual financial pressure — daily penalties plus potential deposit loss — to force closing.
Closing penalties discourage buyers from delaying to investigate payment discrepancies.
Closing pressure may lead buyers to accept incomplete punch list work rather than risk penalties.
Inspection restrictions combined with closing pressure limit the buyer's ability to identify defects before closing.
What Buyers Can Do
- Negotiate the closing timeline. If possible, request a reasonable buffer period rather than a fixed date. Delays caused by the builder's own processes should not trigger buyer penalties.
- Understand the per-day penalty amount. Calculate the total exposure if closing is delayed by a week or more. Daily penalties can add up to significant sums quickly.
- Review the Santiago case. The Santiago v. D.R. Horton ruling may be relevant to your situation. If you are buying a D.R. Horton 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 D.R. Horton contracts that collectively limit buyer remedies. A contract scan can identify all of them.