Overview
Lennar operates in South Carolina's growing coastal and metropolitan markets, including the Charleston area, the Myrtle Beach region, and the Greenville-Spartanburg corridor. The state's population growth, particularly in the Lowcountry, has driven significant new construction activity.
South Carolina is a particularly significant state for understanding Lennar's contract enforceability. The South Carolina Supreme Court's 2022 ruling in Damico v. Lennar Carolinas found Lennar's arbitration provision unconscionable and described the purchase agreement as a contract of adhesion. Additional litigation has alleged structural defects in Lennar-built homes in the state.
How South Carolina Law Affects Your Contract
The following analysis examines how Lennar's documented contract patterns interact with South Carolina consumer protection law.
Arbitration Unconscionability After Damico v. Lennar Carolinas
In Damico v. Lennar Carolinas (Op. No. 28114, 2022), the South Carolina Supreme Court found Lennar's arbitration provision unconscionable and declined to sever it from the contract on public policy grounds. The court described the purchase agreement as a contract of adhesion that buyers had no meaningful ability to negotiate. This ruling directly implicates Lennar's mandatory arbitration clause (ARB-001) and represents one of the strongest judicial critiques of the builder's contract terms nationwide.
Implied Warranty of Habitability in South Carolina
South Carolina recognizes an implied warranty of habitability in new home sales under the builder-vendor doctrine established in Lane v. Trenholm Building Co. (1954). Lennar's contractual waiver of this warranty (HAB-001) faces significant enforceability challenges in South Carolina, particularly in light of the Damico court's characterization of Lennar's contract as unconscionable. South Carolina courts have been protective of this implied warranty.
Structural Defect Allegations and Warranty Limitations
The 2024 litigation involving CalAtlantic/Lennar homes in South Carolina, where improperly installed I-joists caused floor sagging, highlights the practical significance of Lennar's limited warranty provisions (WAR-001). South Carolina's eight-year statute of repose for construction defects (S.C. Code § 15-3-640) may provide a longer filing window than Lennar's warranty terms allow, creating a gap between contractual and statutory protections.
Class Action Waiver and South Carolina Public Policy
Given the Damico court's willingness to find Lennar's contract provisions unconscionable on public policy grounds, Lennar's class action waiver (CLA-001) may face heightened scrutiny in South Carolina. The court's emphasis on the adhesive nature of the contract and the buyer's lack of bargaining power provides a framework for challenging additional contract terms beyond the arbitration clause.
Right to Cure and South Carolina Notice Requirements
South Carolina's Right to Cure Act (S.C. Code § 40-59-850 et seq.) requires homeowners to provide written notice to the builder and allow an opportunity to inspect and offer repairs before filing a construction defect lawsuit. This statutory process applies in addition to any contractual dispute resolution requirements, though the Damico ruling may affect how Lennar's contractual provisions are enforced.
South Carolina Legal History
Selected cases and investigations involving Lennar in South Carolina.
Damico v. Lennar Carolinas
Construction defect case arising from The Abbey development in Berkeley County. The South Carolina Supreme Court found the arbitration provision unconscionable and declined to sever it on public policy grounds, describing the purchase agreement as a contract of adhesion that buyers had no meaningful ability to negotiate.
CalAtlantic/Lennar Structural Defects
Homes built on the Georgetown model were found to have improperly installed I-joists, causing noticeable floor sagging. Expert evaluation confirmed structural defects requiring remediation across multiple homes in the development.
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 that the Damico ruling may affect the enforceability of your contract terms. The South Carolina Supreme Court found Lennar's arbitration clause unconscionable in 2022. This ruling may influence how other provisions in Lennar's purchase agreement are evaluated in South Carolina courts.
- Understand South Carolina's implied warranty of habitability. South Carolina recognizes an implied warranty of habitability for new home construction. This protection exists independently of Lennar's express warranty, and contractual waivers of this warranty face significant enforceability challenges in this state.
- Comply with the Right to Cure Act before pursuing legal action. South Carolina law requires written notice to the builder and an opportunity to inspect and repair before filing a construction defect lawsuit. An attorney familiar with this statute can guide you through the mandatory pre-suit process.
- Request independent inspections, particularly for structural components. Given the documented structural defect allegations in South Carolina Lennar communities, independent inspections focused on framing, floor joists, and structural integrity are particularly important. Negotiate for this right before signing if the contract restricts it (INS-001).
- Document all defects promptly within the eight-year statute of repose. South Carolina's statute of repose provides up to eight years from substantial completion to file construction defect claims. Do not rely solely on Lennar's warranty timelines, which may be shorter than this statutory period.