How Taylor Morrison Uses This Clause
Taylor Morrison purchase agreements have been documented to include deposit forfeiture / earnest money trap provisions. Taylor Morrison contracts may characterize earnest money deposits as non-refundable upon buyer non-performance, with the deposit treated as liquidated damages. Legal Q&A responses from licensed attorneys document cases where Taylor Morrison retained deposits of $7,500 to $20,000 when buyers failed to close, including situations involving financing contingency windows as short as 45 days.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
Taylor Morrison'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.
Standard Form Contract
This clause appears in Taylor Morrison'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 Taylor Morrison's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Deposit forfeiture clauses in new construction contracts are generally enforceable in Texas when... |
| Florida | Likely Enforceable | Florida courts generally enforce deposit forfeiture provisions in new construction contracts when... |
| Arizona | Likely Enforceable | Arizona courts enforce deposit forfeiture clauses as liquidated damages when the amount is... |
| California | Likely Enforceable | California has one of the most detailed statutory frameworks governing liquidated damages in... |
| Colorado | Likely Enforceable | Colorado courts enforce liquidated damages clauses, including deposit forfeiture provisions, when... |
| Georgia | Likely Enforceable | Georgia courts enforce liquidated damages provisions when the amount is a reasonable pre-estimate of... |
| North Carolina | Likely Enforceable | North Carolina courts enforce liquidated damages provisions, including deposit forfeiture in new... |
| Oregon | Likely Enforceable | Oregon courts enforce liquidated damages provisions when the amount is reasonable in relation to... |
| Washington | Likely Enforceable | Washington courts enforce liquidated damages provisions when the amount is reasonable relative to... |
| Nevada | Likely Enforceable | Nevada courts enforce liquidated damages provisions when the amount is reasonable relative to... |
Related Clauses in Taylor Morrison Contracts
This clause often works in combination with other provisions in Taylor Morrison'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.
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. Taylor Morrison'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 Taylor Morrison contracts that collectively limit buyer remedies. A contract scan can identify all of them.