How Meritage Homes Uses This Clause
Meritage Homes purchase agreements have been documented to include mandatory binding arbitration provisions. Meritage purchase agreements have included arbitration provisions requiring disputes to be resolved through private arbitration rather than in court. In Meritage Homes of Texas v. Pouye (2023), a Texas appellate court denied the company's motion to compel arbitration, finding the clause could not bind subsequent purchasers who were not parties to the original agreement. This clause has been the subject of litigation, including Meritage Homes of Texas v. Pouye & Toure.
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 Deposit Forfeiture
Disputes over deposit forfeiture must be resolved through arbitration, where the cost of pursuing a claim may exceed the deposit amount.
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.
Meritage Homes of Texas v. Pouye & Toure
Meritage attempted to compel arbitration against homeowners who purchased a previously owned Meritage home. The buyers alleged cracks in the floor, walls, ceiling, and foundation. The appellate court upheld the trial court's denial of the arbitration motion, finding that the arbitration clause in Meritage's original purchase agreement could not bind subsequent purchasers who were not parties to that contract.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Meritage Homes's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Mandatory arbitration clauses in Texas new construction contracts are likely enforceable. Texas has... |
| Arizona | Likely Enforceable | Mandatory arbitration clauses in Arizona new construction contracts are likely enforceable. Arizona... |
| California | Uncertain | The enforceability of mandatory arbitration clauses in California new construction contracts is... |
| Colorado | Likely Enforceable | Mandatory arbitration clauses in Colorado new construction contracts are likely enforceable.... |
| Florida | Likely Enforceable | Mandatory arbitration clauses in Florida new construction contracts are likely enforceable. Florida... |
| Georgia | Likely Enforceable | Mandatory arbitration clauses in Georgia new construction contracts are likely enforceable. Georgia... |
| North Carolina | Likely Enforceable | Mandatory arbitration clauses in North Carolina new construction contracts are likely enforceable.... |
| South Carolina | Uncertain | The enforceability of mandatory arbitration clauses in South Carolina new construction contracts is... |
| Tennessee | Likely Enforceable | Mandatory arbitration clauses in Tennessee new construction contracts are likely enforceable.... |
Related Clauses in Meritage Homes Contracts
This clause often works in combination with other provisions in Meritage Homes's purchase agreements.
Disputes over deposit forfeiture must be resolved through arbitration, where the cost of pursuing a claim may exceed the deposit amount.
Challenges to the habitability waiver must be pursued in arbitration rather than court.
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
Even if an arbitrator finds in the buyer's favor, the liability cap may limit the award.
What Buyers Can Do
- Understand the arbitration process before signing. Review which arbitration provider is specified, who selects the arbitrator, and whether you have any right to appeal. These details significantly affect the fairness of the process.
- Research the arbitration provider's track record. The specified arbitration provider may have a history with builder disputes. Understanding the provider's procedures and typical outcomes can help you prepare.
- Review the Meritage Homes of Texas case. The Meritage Homes of Texas v. Pouye & Toure 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.