How Meritage Homes Uses This Clause
Meritage Homes purchase agreements have been documented to include limitation of liability / no monetary damages provisions. The contract may limit the builder's liability for monetary damages resulting from construction defects, delays, or contract breaches. This can restrict buyers' recovery to repair of the specific defect rather than consequential damages such as alternative housing costs or diminished property value. This clause has been the subject of litigation, including Stucco Defect Claims (TX & FL) — Underlying Homeowner Actions.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Meritage 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
Arbitrators may be bound by the contractual damage limitation, further restricting buyer recovery.
Standard Form Contract
This clause appears in Meritage 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 Meritage Homes's use of this clause type.
Stucco Defect Claims (TX & FL) — Underlying Homeowner Actions
Homeowners in Texas and Florida began filing claims starting in late 2017 alleging design and construction defects in exterior stucco systems — specifically, inadequately installed stucco that fails to resist cracking or drain moisture. Meritage has reported over 1,300 such claims, with roughly 500 settled. Claims were filed under the Texas Residential Construction Liability Act and Florida's Construction Defect Statute.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Meritage Homes's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Uncertain | Texas courts generally enforce contractual liability limitations but subject them to... |
| Arizona | Uncertain | Arizona's Purchaser Dwelling Act provides statutory remedies for construction defects that exist... |
| California | Likely Unenforceable | California provides strong statutory protections for homebuyers under the Right to Repair Act (SB... |
| Colorado | Likely Unenforceable | Colorado's Construction Defect Action Reform Act (CDARA) and the Homeowner Protection Act of 2007... |
| Florida | Uncertain | Florida law imposes statutory protections for construction defect claims under Chapter 558 that may... |
| Georgia | Uncertain | Georgia law permits contractual limitation of liability but subjects such clauses to... |
| North Carolina | Uncertain | North Carolina recognizes the implied warranty of habitability for new construction and has... |
| South Carolina | Likely Unenforceable | South Carolina courts have found similar builder contract provisions unconscionable. In Smith v.... |
| Tennessee | Uncertain | Tennessee recognizes the implied warranty of habitability and has consumer protection statutes that... |
Related Clauses in Meritage Homes Contracts
This clause often works in combination with other provisions in Meritage Homes's purchase agreements.
Arbitrators may be bound by the contractual damage limitation, further restricting buyer recovery.
Together these clauses eliminate both the legal standard (habitability) and the remedy (damages).
The damage cap limits recovery even for items covered by the express warranty.
Individual claims under the liability cap may be too small to pursue, and class aggregation is prohibited.
What Buyers Can Do
- Understand what damages are excluded. The limitation may cover consequential damages, incidental damages, or all monetary damages beyond the purchase price. The scope of the limitation matters significantly.
- Ask whether the limitation applies to construction defects. Some liability limitations are drafted broadly enough to encompass defect claims. Clarify whether defect-related damages are capped or excluded.
- Review the Stucco Defect Claims (TX & FL) — Underlying Homeowner Actions case. The Stucco Defect Claims (TX & FL) — Underlying Homeowner Actions ruling may be relevant to your situation. If you are buying a Meritage 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 Meritage Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.