How Richmond American Homes Uses This Clause
Richmond American Homes purchase agreements have included provisions waiving the buyer's right to participate in class action proceedings. This forces buyers to pursue claims individually, which can be cost-prohibitive for defects affecting entire communities or subdivisions.
This provision typically works in conjunction with the mandatory arbitration clause to ensure all disputes are handled individually in private proceedings.
Richmond American Homes's scale as a subsidiary of MDC Holdings 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
The class action waiver and arbitration clause work together to prevent buyers from consolidating claims. Community-wide defects must be pursued individually, significantly increasing the cost and complexity for each buyer.
Impact on Community-Wide Defects
When construction defects affect an entire subdivision — such as foundation issues related to soil conditions or exterior system failures — the class action waiver prevents affected homeowners from pooling resources and sharing litigation costs.
Legal History
The following cases involve Richmond American Homes's use of this clause type.
Colorado Construction Defect Litigation — Multiple Homeowner Actions
Richmond American Homes and MDC Holdings have been named in construction defect lawsuits in Colorado. Colorado's legislation regarding HOA standing to bring construction defect claims on behalf of members interacts with class action waiver provisions.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Richmond American Homes's operating states.
| State | Status | Note |
|---|---|---|
| Colorado | Likely Enforceable | Class action waivers in Colorado new construction contracts are likely enforceable when paired with a valid arbitration agreement, consistent with federal precedent. |
| Arizona | Likely Enforceable | Class action waivers in Arizona new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Nevada | Likely Enforceable | Class action waivers in Nevada new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| California | Uncertain | The enforceability of class action waivers in California is uncertain. California courts have scrutinized such waivers in consumer adhesion contracts, though federal preemption under the FAA may apply. |
| Oregon | Likely Enforceable | Class action waivers in Oregon new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Washington | Likely Enforceable | Class action waivers in Washington new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Utah | Likely Enforceable | Class action waivers in Utah new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Idaho | Likely Enforceable | Class action waivers in Idaho new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Florida | Likely Enforceable | Class action waivers in Florida new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Maryland | Likely Enforceable | Class action waivers in Maryland new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
| Virginia | Likely Enforceable | Class action waivers in Virginia new construction contracts are likely enforceable when paired with a valid arbitration agreement. |
Related Clauses in Richmond American Homes Contracts
This clause often works in combination with other provisions in Richmond American Homes's purchase agreements.
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
Individual claims subject to the class action waiver are further limited by the liability cap.
Community-wide habitability issues cannot be pursued through class action when this waiver is in effect.
What Buyers Can Do
- Understand the practical impact of the class action waiver. If construction defects affect your entire community, you will need to pursue your claim individually rather than joining with neighbors. This can make smaller claims economically impractical to pursue.
- Connect with neighbors experiencing similar issues. Even without a formal class action, sharing information with neighbors about common defects can help each homeowner build a stronger individual case and share the cost of expert evaluations.
- Request removal of the class action waiver in writing. Even if the builder declines, having a written record of your objection may be relevant if the clause's enforceability is later challenged.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Richmond American contracts that collectively limit buyer remedies. A contract scan can identify all of them.