How Smith Douglas Homes Uses This Clause
Smith Douglas Homes purchase agreements have been documented to include restrictive limited warranty exclusions provisions. Smith Douglas provides a 1-Year Limited Warranty covering workmanship, major mechanical systems (electrical, plumbing, HVAC, appliances), and finishes including drywall, paint, trim, cabinetry, and flooring. After 12 months, workmanship claims are no longer covered. Mechanical system distribution components (wiring, piping, ductwork) are covered for two years. (Source: smithdouglas.com/warranty-request) This clause has been the subject of litigation, including WSOC-TV Siding Defect Investigation.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Smith Douglas 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 Warranty Voiding
Warranty exclusions narrow coverage while third-party administration adds procedural barriers to filing claims.
Standard Form Contract
This clause appears in Smith Douglas 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 Smith Douglas Homes's use of this clause type.
WSOC-TV Siding Defect Investigation
WSOC-TV's Action 9 investigative unit reported that homeowners in at least two Smith Douglas neighborhoods (Locust Town Center and Dogwood Forest in the Charlotte metro area) experienced widespread siding cracking on houses that were only a few years old. Smith Douglas stated it would work with siding manufacturer Allura to address the issue. A separate class action against Allura for defective siding had previously settled for $12.5 million. (Source: WSOC-TV published reports)
SEC Risk Disclosure \u2014 Litigation in Ordinary Course
In its S-1 prospectus and 10-K filings, Smith Douglas Homes discloses that it is subject to litigation in the ordinary course of business, including claims related to construction defects, personal injury, and contractual disputes. The company states that its purchase agreements with homebuyers are "secured by a typically non-refundable deposit." (Source: SEC Form S-1, 2023; SEC Form 10-K, FY2024)
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Smith Douglas Homes's operating states.
| State | Status | Note |
|---|---|---|
| Georgia | Likely Enforceable | Express warranty exclusion clauses in Georgia new construction contracts are generally enforceable.... |
| Tennessee | Likely Enforceable | Express warranty exclusion clauses in Tennessee new construction contracts are generally... |
| Alabama | Likely Enforceable | Express warranty exclusion clauses in Alabama new construction contracts are generally enforceable.... |
| North Carolina | Likely Enforceable | Express warranty exclusion clauses in North Carolina new construction contracts are generally... |
| Texas | Likely Enforceable | Express warranty exclusion clauses in Texas new construction contracts are generally enforceable.... |
Related Clauses in Smith Douglas Homes Contracts
This clause often works in combination with other provisions in Smith Douglas Homes's purchase agreements.
Warranty exclusions narrow coverage while third-party administration adds procedural barriers to filing claims.
Substituted materials may not be covered under the same warranty terms as originally specified materials.
Without independent inspection, defects may go undiscovered until after warranty exclusion periods expire.
Items not captured on the punch list may fall outside warranty exclusions, leaving the buyer without recourse.
What Buyers Can Do
- Read the warranty exclusion list carefully. The exclusions may cover common issues like cosmetic defects, drainage problems, HVAC performance, and landscaping. Know what is not covered before you close.
- Understand warranty durations by category. Structural warranties may last 10 years, systems warranties 2 years, and cosmetic warranties just 1 year. Each category has different coverage and exclusions.
- Review the WSOC-TV Siding Defect Investigation case. The WSOC-TV Siding Defect Investigation ruling may be relevant to your situation. If you are buying a Smith Douglas 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 Smith Douglas Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.