How D.R. Horton Uses This Clause
D.R. Horton purchase agreements have been documented to include restrictive limited warranty exclusions provisions. The builder's warranty contains extensive exclusion lists that carve out common defect categories such as cosmetic imperfections, drainage issues, and HVAC performance. Many problems that buyers reasonably expect to be covered fall outside the warranty's narrow definitions. 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 Habitability Waiver
If the habitability waiver holds, the limited warranty becomes the sole protection, and exclusions further narrow it.
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.
Louisiana Class Action
Homeowners allege that HVAC units installed in their D.R. Horton homes cannot adequately handle Louisiana's humidity, resulting in persistent mold and condensation issues. D.R. Horton moved to compel arbitration; the judge denied the motion, allowing the case to proceed in court.
Nagano v. D.R. Horton
A class action involving allegations of defective galvanized metal foundation components in D.R. Horton homes in Hawaii. The court certified the class in January 2024. Trial is set for July 2026.
Hunterbrook Media Investigation
Hunterbrook Media published a series of reports documenting complaints from more than 60 homeowners across 16 states. The investigation highlighted that D.R. Horton sets aside approximately $2,348 per home in warranty reserves, while homeowners reported actual defect repair costs ranging from $5,000 to $20,000 per home.
$16.1M Settlement (South Carolina)
D.R. Horton agreed to a $16.1 million class action settlement to resolve claims related to widespread construction defects in South Carolina communities. Source: Violation Tracker.
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 | Express warranty exclusion clauses in Texas new construction contracts are generally enforceable.... |
| Florida | Likely Enforceable | Express warranty exclusion clauses in Florida new construction contracts are generally enforceable.... |
| South Carolina | Likely Enforceable | Express warranty exclusion clauses in South Carolina new construction contracts are generally... |
| North Carolina | Likely Enforceable | Express warranty exclusion clauses in North Carolina new construction contracts are generally... |
| Arizona | Likely Enforceable | Express warranty exclusion clauses in Arizona new construction contracts are generally enforceable.... |
| Georgia | Likely Enforceable | Express warranty exclusion clauses in Georgia new construction contracts are generally enforceable.... |
| Colorado | Uncertain | Warranty exclusion clauses in Colorado new construction contracts face notable constraints.... |
| Nevada | Uncertain | Warranty exclusion clauses in Nevada new construction contracts face significant statutory... |
| California | Uncertain | Warranty exclusion clauses in California new construction contracts face significant limitations.... |
| Virginia | Likely Enforceable | Express warranty exclusion clauses in Virginia new construction contracts are generally enforceable.... |
| Tennessee | Likely Enforceable | Express warranty exclusion clauses in Tennessee new construction contracts are generally... |
| Alabama | Likely Enforceable | Express warranty exclusion clauses in Alabama new construction contracts are generally enforceable.... |
| Maryland | Uncertain | Warranty exclusion clauses in Maryland new construction contracts face notable constraints. The... |
| Louisiana | Uncertain | Warranty exclusion clauses in Louisiana new construction contracts face significant constraints... |
| Hawaii | Uncertain | Warranty exclusion clauses in Hawaii new construction contracts face constraints under Hawaii's... |
Related Clauses in D.R. Horton Contracts
This clause often works in combination with other provisions in D.R. Horton's purchase agreements.
If the habitability waiver holds, the limited warranty becomes the sole protection, and exclusions further narrow it.
Even warranty-covered items may be subject to the overall damage limitation.
Items not captured on the punch list may fall outside warranty exclusions, leaving the buyer without recourse.
Without independent inspection, defects may go undiscovered until after warranty exclusion periods expire.
What Buyers Can Do
- Read the warranty exclusion list carefully. The exclusions may cover common issues like cosmetic defects, drainage problems, HVAC performance, and landscaping. Know what is not covered before you close.
- Understand warranty durations by category. Structural warranties may last 10 years, systems warranties 2 years, and cosmetic warranties just 1 year. Each category has different coverage and exclusions.
- 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.