How PulteGroup Uses This Clause
PulteGroup purchase agreements have been documented to include daily closing penalty provisions. If the buyer cannot close by the specified date, the contract may impose per-day financial penalties or allow the builder to terminate the agreement and retain the deposit. These penalties can apply even when delays result from the builder's own affiliated lender or last-minute document changes. This clause has been the subject of litigation, including Arizona AG Settlement (Earnest Money / Consumer Fraud).
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because PulteGroup operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
PulteGroup'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
Together these create dual financial pressure — daily penalties plus potential deposit loss — to force closing.
Standardized Across Markets
PulteGroup's scale means contract templates are largely standardized across its operations. This clause identified in one state's contract is likely present in other states' contracts, though local addenda may modify the terms.
Standard Form Contract
This clause appears in PulteGroup'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 PulteGroup's use of this clause type.
Arizona AG Settlement (Earnest Money / Consumer Fraud)
Arizona Attorney General Terry Goddard announced a $1,181,400 settlement with Pulte Home Corporation and Pulte Mortgage LLC, resolving allegations that Pulte's pre-qualification practices, earnest money deposit policies, and Spanish-language marketing efforts violated Arizona consumer protection law. The AG alleged that Pulte pre-qualified consumers at one interest rate but later offered substantially higher rates at closing, and that Pulte Mortgage failed to issue loan disapproval notices before contractual deadlines, then denied earnest money refunds. The settlement required Pulte to refund $81,400 to 10 consumers and fund a $200,000 escrow for additional claims. Source: Arizona Attorney General press release.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects PulteGroup's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Daily closing penalty clauses in Texas new construction contracts are generally enforceable when... |
| Florida | Likely Enforceable | Daily closing penalty provisions in Florida new construction contracts are generally enforceable... |
| California | Uncertain | California applies heightened scrutiny to liquidated damages provisions in residential real estate... |
| Arizona | Likely Enforceable | Daily closing penalty clauses are generally enforceable in Arizona when structured as liquidated... |
| Georgia | Likely Enforceable | Georgia generally enforces per-diem closing penalty provisions when structured as liquidated... |
| North Carolina | Likely Enforceable | Daily closing penalty provisions in North Carolina new construction contracts are generally... |
| South Carolina | Likely Enforceable | Daily closing penalty clauses in South Carolina are generally enforceable as liquidated damages when... |
| Colorado | Likely Enforceable | Colorado courts generally enforce per-diem closing penalty provisions when they qualify as... |
| Nevada | Likely Enforceable | Daily closing penalty clauses in Nevada are generally enforceable as liquidated damages when the... |
| Virginia | Likely Enforceable | Virginia courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Maryland | Uncertain | Maryland applies careful scrutiny to liquidated damages provisions in residential contracts.... |
| Tennessee | Likely Enforceable | Tennessee courts generally enforce per-diem closing penalty provisions when they qualify as... |
| Indiana | Likely Enforceable | Indiana courts generally enforce per-diem closing penalty provisions that qualify as reasonable... |
| Ohio | Likely Enforceable | Ohio courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Pennsylvania | Likely Enforceable | Pennsylvania courts generally enforce per-diem closing penalty provisions when structured as... |
| New Jersey | Uncertain | New Jersey applies heightened scrutiny to liquidated damages provisions in residential contracts.... |
| Minnesota | Uncertain | Minnesota courts apply careful scrutiny to liquidated damages provisions in residential contracts.... |
| Illinois | Uncertain | Illinois courts apply careful scrutiny to liquidated damages provisions in residential contracts.... |
| Michigan | Likely Enforceable | Michigan courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Washington | Uncertain | Washington courts apply heightened scrutiny to liquidated damages provisions in residential... |
| Utah | Likely Enforceable | Utah courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Alabama | Likely Enforceable | Alabama courts generally enforce per-diem closing penalty provisions when structured as reasonable... |
| Connecticut | Uncertain | Connecticut courts apply careful scrutiny to liquidated damages provisions in residential contracts.... |
Related Clauses in PulteGroup Contracts
This clause often works in combination with other provisions in PulteGroup's purchase agreements.
Together these create dual financial pressure — daily penalties plus potential deposit loss — to force closing.
Inspection restrictions combined with closing pressure limit the buyer's ability to identify defects before closing.
Certificate of occupancy issues may interact with closing deadlines and associated penalties.
Closing pressure may lead buyers to accept incomplete punch list work rather than risk penalties.
What Buyers Can Do
- Negotiate the closing timeline. If possible, request a reasonable buffer period rather than a fixed date. Delays caused by the builder's own processes should not trigger buyer penalties.
- Understand the per-day penalty amount. Calculate the total exposure if closing is delayed by a week or more. Daily penalties can add up to significant sums quickly.
- Review the Arizona AG Settlement (Earnest Money / Consumer Fraud) case. The Arizona AG Settlement (Earnest Money / Consumer Fraud) ruling may be relevant to your situation. If you are buying a PulteGroup 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 PulteGroup contracts that collectively limit buyer remedies. A contract scan can identify all of them.