Overview
D.R. Horton operates in multiple markets across South Carolina, including the Charleston, Greenville-Spartanburg, Columbia, and Myrtle Beach areas. The company builds under its core brand and Express Homes in the state.
South Carolina is among the most significant states for D.R. Horton contract analysis due to the South Carolina Supreme Court's landmark 2016 decision in Smith v. D.R. Horton, which found several of the builder's standard contract provisions unconscionable.
How South Carolina Law Affects Your Contract
The following analysis examines how D.R. Horton's documented contract patterns interact with South Carolina consumer protection law.
Habitability Waivers After Smith v. D.R. Horton
The South Carolina Supreme Court ruled in Smith v. D.R. Horton, Inc. (2016) that the builder's waiver of the implied warranty of habitability was unconscionable. The court found an extreme imbalance of bargaining power between the national builder and individual homebuyers. This precedent means D.R. Horton's habitability waiver clause (HAB-001) may be unenforceable in South Carolina.
Arbitration Provisions in South Carolina
In Smith v. D.R. Horton, the South Carolina Supreme Court also found the arbitration agreement was a contract of adhesion, noting the extreme disparity in bargaining power. While arbitration clauses are not automatically invalid in South Carolina, the Smith decision provides precedent for challenging overly one-sided arbitration provisions in D.R. Horton contracts.
Limitation of Liability After Smith
The Smith court found unconscionable the contract language stating the builder 'shall not be liable for monetary damages of any kind.' This means D.R. Horton's limitation of liability provisions (DAM-001) have been directly rejected by the South Carolina Supreme Court, and similar provisions in current contracts may face the same fate.
Right-to-Repair Notice Requirement
South Carolina's notice and opportunity to cure statute (S.C. Code § 40-59-840 et seq.) requires homeowners to provide written notice to the builder before filing a construction defect lawsuit. This statutory requirement applies independently of any notice provisions in the purchase agreement.
South Carolina Legal History
Selected cases and investigations involving D.R. Horton in South Carolina.
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.
$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.
Relevant South Carolina Laws
South Carolina courts recognize an implied warranty of habitability for new construction. The South Carolina Supreme Court has held that contractual waivers of this warranty may be unconscionable.
Prohibits unfair or deceptive acts in trade or commerce, with potential for treble damages and attorney fees.
Requires homeowners to provide written notice to the builder and allow an opportunity to inspect and offer a repair before filing a construction defect lawsuit.
South Carolina Key Facts
- 1The South Carolina Supreme Court found habitability waiver clauses unconscionable in Smith v. D.R. Horton (2016).
- 2South Carolina's right-to-repair statute requires written notice before filing a construction defect lawsuit.
- 3Mandatory arbitration clauses have been found unconscionable in some South Carolina cases involving national builders.
- 4South Carolina has a statute of repose of 8 years for construction defect claims.
- 5The Residential Builders Commission licenses and regulates residential builders in South Carolina.
- 6South Carolina courts apply a totality-of-the-circumstances test for unconscionability of contract provisions.
What South Carolina Buyers Should Know
- Know the Smith v. D.R. Horton precedent. The South Carolina Supreme Court has already found several D.R. Horton contract provisions unconscionable. This precedent may strengthen your position if you need to challenge similar provisions in your purchase agreement.
- Understand that habitability waivers may be unenforceable. South Carolina courts have held that the implied warranty of habitability cannot be waived by contract when there is a significant disparity in bargaining power between the builder and buyer.
- Comply with the right-to-repair notice requirement. South Carolina law requires written notice to the builder before filing a construction defect lawsuit. Document all defects carefully and send notice via certified mail.
- Consider the Unfair Trade Practices Act for deceptive conduct. The South Carolina Unfair Trade Practices Act (S.C. Code § 39-5-10 et seq.) provides remedies including treble damages if a builder engages in unfair or deceptive acts during the sales process.