How D.R. Horton Uses This Clause
D.R. Horton purchase agreements have been documented to include implied warranty of habitability waiver provisions. The contract may ask buyers to waive their legal right to a home that meets basic livability standards. This means the builder disclaims responsibility for ensuring the home is safe, structurally sound, and fit for occupancy at closing. This clause has been the subject of litigation, including Smith v. D.R. Horton, Inc..
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 Mandatory Arbitration
Disputes about the habitability waiver must be resolved in private arbitration, limiting the buyer's ability to challenge it in open court.
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.
Smith v. D.R. Horton, Inc.
The South Carolina Supreme Court found several contract provisions unconscionable, including language stating the builder "shall not be liable for monetary damages of any kind" and a waiver of the implied warranty of habitability. The court also found the arbitration agreement was a contract of adhesion, noting the extreme imbalance of bargaining power between the national builder and individual homebuyers.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects D.R. Horton's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Not Applicable | Texas does not recognize a common law implied warranty of habitability for new residential... |
| Florida | Likely Unenforceable | Florida recognizes an implied warranty of habitability for newly constructed homes, established by... |
| South Carolina | Likely Unenforceable | South Carolina recognizes an implied warranty of habitability for new residential construction, and... |
| North Carolina | Uncertain | North Carolina recognizes an implied warranty of habitability in new home construction, established... |
| Arizona | Uncertain | Arizona recognizes an implied warranty of habitability in new home construction, established in... |
| Georgia | Likely Enforceable | Georgia's recognition of the implied warranty of habitability in new construction is limited. The... |
| Colorado | Likely Unenforceable | Colorado provides strong statutory protections for new home buyers through the Colorado Construction... |
| Nevada | Likely Unenforceable | Nevada provides robust statutory protections for new home buyers through NRS Chapter 40, which... |
| California | Likely Unenforceable | California provides strong statutory protections for homebuyers through the Right to Repair Act... |
| Virginia | Uncertain | Virginia recognizes an implied warranty of habitability in new residential construction under the... |
| Tennessee | Uncertain | Tennessee recognizes an implied warranty of habitability in new home construction, established in... |
| Alabama | Likely Enforceable | Alabama's recognition of the implied warranty of habitability in new construction is limited. While... |
| Maryland | Likely Unenforceable | Maryland provides strong implied warranty protections for new home buyers. The Maryland Court of... |
| Louisiana | Likely Unenforceable | Louisiana provides statutory protections for new home buyers through the New Home Warranty Act (La.... |
| Hawaii | Likely Unenforceable | Hawaii recognizes an implied warranty of habitability for new residential construction and provides... |
Related Clauses in D.R. Horton Contracts
This clause often works in combination with other provisions in D.R. Horton's purchase agreements.
Disputes about the habitability waiver must be resolved in private arbitration, limiting the buyer's ability to challenge it in open court.
Prevents homeowners from jointly challenging habitability issues, forcing individual claims.
The liability cap reinforces the habitability waiver by capping damages even if the waiver is struck down.
The express warranty may be the buyer's only remedy if the habitability waiver is enforced, and warranty exclusions further narrow coverage.
What Buyers Can Do
- Check whether your state protects the implied warranty of habitability. In states with strong implied warranty protections, the waiver may not hold up in court. Your rights depend heavily on where the home is located.
- Request that the waiver be struck from the contract. D.R. Horton may decline, but making the request in writing creates a record that you did not voluntarily agree to the waiver.
- Review the Smith case. The Smith v. D.R. Horton, Inc. 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.