How Lennar Uses This Clause
Lennar purchase agreements have been documented to include deposit forfeiture / earnest money trap provisions. The builder may retain the full earnest money deposit as liquidated damages if the buyer fails to close, even for reasons outside the buyer's control. Deposits can range from thousands to tens of thousands of dollars with limited refund conditions.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Lennar'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
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Standard Form Contract
This clause appears in Lennar'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.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Lennar's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Deposit forfeiture clauses in new construction contracts are generally enforceable in Texas when... |
| Florida | Likely Enforceable | Florida courts generally enforce deposit forfeiture provisions in new construction contracts when... |
| California | Likely Enforceable | California has one of the most detailed statutory frameworks governing liquidated damages in... |
| Arizona | Likely Enforceable | Arizona courts enforce deposit forfeiture clauses as liquidated damages when the amount is... |
| Colorado | Likely Enforceable | Colorado courts enforce liquidated damages clauses, including deposit forfeiture provisions, when... |
| Nevada | Likely Enforceable | Nevada courts enforce liquidated damages provisions when the amount is reasonable relative to... |
| North Carolina | Likely Enforceable | North Carolina courts enforce liquidated damages provisions, including deposit forfeiture in new... |
| South Carolina | Likely Enforceable | South Carolina courts enforce liquidated damages provisions in real estate contracts when the amount... |
| Georgia | Likely Enforceable | Georgia courts enforce liquidated damages provisions when the amount is a reasonable pre-estimate of... |
| Virginia | Likely Enforceable | Virginia courts enforce liquidated damages provisions in real estate contracts when the amount bears... |
| Maryland | Likely Enforceable | Maryland courts enforce liquidated damages clauses when the amount is a reasonable estimate of... |
| New Jersey | Likely Enforceable | New Jersey courts enforce liquidated damages provisions when the amount is reasonable in relation to... |
| Tennessee | Likely Enforceable | Tennessee courts enforce liquidated damages provisions when the amount is reasonable in proportion... |
| Minnesota | Likely Enforceable | Minnesota courts enforce liquidated damages provisions when the amount is a reasonable forecast of... |
| Washington | Likely Enforceable | Washington courts enforce liquidated damages provisions when the amount is reasonable relative to... |
| Oregon | Likely Enforceable | Oregon courts enforce liquidated damages provisions when the amount is reasonable in relation to... |
| Illinois | Likely Enforceable | Illinois courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| Indiana | Likely Enforceable | Indiana courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| Pennsylvania | Likely Enforceable | Pennsylvania courts enforce liquidated damages provisions when the amount is a reasonable... |
| Idaho | Likely Enforceable | Idaho courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| Alabama | Likely Enforceable | Alabama courts enforce liquidated damages provisions when the amount is reasonable relative to the... |
| Utah | Likely Enforceable | Utah courts enforce liquidated damages provisions when the amount is a reasonable pre-estimate of... |
Related Clauses in Lennar Contracts
This clause often works in combination with other provisions in Lennar's purchase agreements.
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Closing penalties can create pressure to close quickly, and failure to close may trigger deposit forfeiture.
What Buyers Can Do
- Understand exactly when your deposit becomes non-refundable. The contract may specify triggers that make the deposit non-refundable before you expect. Read the forfeiture conditions carefully.
- Know the cancellation provisions. Review what happens to your earnest money if you need to cancel. Lennar's contract may allow deposit retention even in circumstances beyond your control.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Lennar contracts that collectively limit buyer remedies. A contract scan can identify all of them.