How Richmond American Homes Uses This Clause
Richmond American Homes purchase agreements may impose per-day financial penalties if the buyer cannot close by the contractually specified date. These charges can accumulate even when delays are attributable to the builder's own affiliated lender, HomeAmerican Mortgage Corporation.
This provision creates financial pressure on buyers to close on the builder's timeline, even when the home may have unresolved construction issues or when delays are caused by third parties including the builder's affiliated service providers.
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
Interaction with Affiliated Lender
Delays caused by HomeAmerican Mortgage Corporation may still trigger closing penalties against the buyer. This creates a situation where the builder's affiliated entities can contribute to the delay while the buyer bears the financial consequences.
Pressure to Close with Unresolved Issues
Daily penalties create financial incentive for buyers to close even when punch list items remain unresolved or when independent inspections have identified potential issues that the builder has not addressed.
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 | Daily closing penalties in Colorado new construction contracts are likely enforceable as liquidated damages provisions, provided the per-day amount is a reasonable pre-estimate of damages. |
| Arizona | Likely Enforceable | Daily closing penalties in Arizona new construction contracts are likely enforceable as liquidated damages provisions. |
| Nevada | Likely Enforceable | Daily closing penalties in Nevada new construction contracts are likely enforceable as liquidated damages provisions. |
| California | Uncertain | California courts scrutinize liquidated damages provisions in residential contracts. Daily closing penalties may face enforceability challenges if the amounts are deemed unreasonable. |
| Oregon | Likely Enforceable | Daily closing penalties in Oregon new construction contracts are likely enforceable as liquidated damages provisions. |
| Washington | Likely Enforceable | Daily closing penalties in Washington new construction contracts are likely enforceable as liquidated damages provisions. |
| Utah | Likely Enforceable | Daily closing penalties in Utah new construction contracts are likely enforceable as liquidated damages provisions. |
| Idaho | Likely Enforceable | Daily closing penalties in Idaho new construction contracts are likely enforceable as liquidated damages provisions. |
| Florida | Likely Enforceable | Daily closing penalties in Florida new construction contracts are likely enforceable as liquidated damages provisions. |
| Maryland | Likely Enforceable | Daily closing penalties in Maryland new construction contracts are likely enforceable as liquidated damages provisions. |
| Virginia | Likely Enforceable | Daily closing penalties in Virginia new construction contracts are likely enforceable as liquidated damages provisions. |
Related Clauses in Richmond American Homes Contracts
This clause often works in combination with other provisions in Richmond American Homes's purchase agreements.
Daily closing penalties may accumulate alongside deposit forfeiture, compounding the buyer's financial exposure.
Disputes over closing penalties must be resolved through arbitration rather than court.
Closing penalties create pressure to close before inspection issues are fully resolved.
What Buyers Can Do
- Know the per-day penalty amount and when it triggers. Review the contract to understand the exact daily penalty amount, when it begins accruing, and whether any grace period applies. Calculate the maximum exposure over a realistic delay period.
- Secure financing well before the closing date. Begin the mortgage process early — whether with HomeAmerican Mortgage or an outside lender — to reduce the risk of financing-related closing delays that could trigger penalties.
- Document any builder-caused delays. If the builder's construction schedule, affiliated lender, or title company contributes to closing delays, document everything in writing. This may be relevant if you challenge the penalty.
- Negotiate a mutual penalty clause. Request that the contract include reciprocal penalties if the builder fails to deliver the home by the specified date. This creates balanced incentives for both parties to meet the closing timeline.