How Mattamy Homes Uses This Clause
Mattamy Homes purchase agreements have been documented to include deposit forfeiture / earnest money trap provisions. Mattamy contracts provide that if a buyer breaches the agreement or fails to close, the builder retains the full earnest money deposit as liquidated damages. The contract also includes a \u2018speculation clause\u2019 allowing Mattamy to unilaterally terminate and forfeit the deposit if the purchase is found to be for investment rather than personal use. This clause has been the subject of litigation, including Evans v. Mattamy Homes Limited.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Mattamy Homes'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 Mattamy Homes'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 Mattamy Homes's use of this clause type.
Evans v. Mattamy Homes Limited
Five plaintiffs who signed pre-construction purchase agreements in 2017 for homes in Oakville, Ontario challenged the enforceability of the mandatory arbitration clause. The Court upheld the arbitration agreement, finding that the general atmosphere of the sales environment\u2014which required buyers to pick a lot and provide a deposit cheque on the spot\u2014did not amount to undue influence. Individual claims ranged from $1.5M to $2.2M (source: Ontario Superior Court; BLG; McCarthy T\u00e9trault).
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Mattamy Homes's operating states.
| State | Status | Note |
|---|---|---|
| Florida | Likely Enforceable | Florida courts generally enforce deposit forfeiture provisions in new construction contracts when... |
| North Carolina | Likely Enforceable | North Carolina courts enforce liquidated damages provisions, including deposit forfeiture in new... |
| Arizona | Likely Enforceable | Arizona courts enforce deposit forfeiture clauses as liquidated damages when the amount is... |
| Texas | Likely Enforceable | Deposit forfeiture clauses in new construction contracts are generally enforceable in Texas when... |
Related Clauses in Mattamy Homes Contracts
This clause often works in combination with other provisions in Mattamy Homes's purchase agreements.
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Buyers who discover hidden costs after signing may face deposit forfeiture if they attempt to cancel.
Closing penalties can create pressure to close quickly, and failure to close may trigger deposit forfeiture.
Incentives tied to using the preferred lender may be lost if the buyer switches lenders, and the deposit terms may reflect this.
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. Mattamy Homes's contract may allow deposit retention even in circumstances beyond your control.
- Review the Evans case. The Evans v. Mattamy Homes Limited ruling may be relevant to your situation. If you are buying a Mattamy Homes 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 Mattamy Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.