How M/I Homes Uses This Clause
M/I Homes purchase agreements have been documented to include deposit forfeiture / earnest money trap provisions. M/I Homes purchase agreements govern the conditions under which earnest money deposits may be forfeited upon buyer cancellation. BBB complaint records for M/I Homes document disputes in which buyers sought return of deposits after financing contingency issues arose. The specific terms of refund eligibility and cancellation windows are set by the builder's contract language and vary by market.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because M/I Homes operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
M/I 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.
Regional Contract Patterns
M/I Homes operates in a more focused geographic footprint. Contract terms may vary somewhat between markets, but documented patterns tend to be consistent across the builder's operating states.
Standard Form Contract
This clause appears in M/I 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.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects M/I Homes's operating states.
| State | Status | Note |
|---|---|---|
| Ohio | Likely Enforceable | Ohio courts enforce liquidated damages provisions when the amount is reasonable and the damages were... |
| Indiana | Likely Enforceable | Indiana courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| Michigan | Likely Enforceable | Michigan courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| Illinois | Likely Enforceable | Illinois courts enforce liquidated damages provisions when the amount is a reasonable estimate of... |
| 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... |
| Florida | Likely Enforceable | Florida courts generally enforce deposit forfeiture provisions in new construction contracts when... |
| Texas | Likely Enforceable | Deposit forfeiture clauses in new construction contracts are generally enforceable in Texas when... |
| 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... |
| Virginia | Likely Enforceable | Virginia courts enforce liquidated damages provisions in real estate contracts when the amount bears... |
| Pennsylvania | Likely Enforceable | Pennsylvania courts enforce liquidated damages provisions when the amount is a reasonable... |
| Maryland | Likely Enforceable | Maryland courts enforce liquidated damages clauses when the amount is a reasonable estimate of... |
| Georgia | Likely Enforceable | Georgia courts enforce liquidated damages provisions when the amount is a reasonable pre-estimate of... |
| Colorado | Likely Enforceable | Colorado courts enforce liquidated damages clauses, including deposit forfeiture provisions, when... |
Related Clauses in M/I Homes Contracts
This clause often works in combination with other provisions in M/I Homes's purchase agreements.
Deposit disputes must go through arbitration, where the cost may approach or exceed the deposit itself.
Incentives tied to using the preferred lender may be lost if the buyer switches lenders, and the deposit terms may reflect this.
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.
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. M/I Homes'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 M/I Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.