How Taylor Morrison Uses This Clause
Taylor Morrison purchase agreements have been documented to include mandatory binding arbitration provisions. Taylor Morrison purchase agreements include a broad arbitration provision requiring resolution of 'any and all claims, controversies, breaches or disputes' related to the purchase agreement and property. In Taylor Morrison of Texas v. Ha (2023) and Taylor Morrison of Texas v. Skufca (2023), the Texas Supreme Court upheld these clauses and extended their reach to non-signatory family members under direct-benefits estoppel, ruling that minor children living in the home could be compelled to arbitrate construction defect claims. This clause has been the subject of litigation, including Taylor Morrison of Texas v. Ha.
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 Class Action Waiver
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
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.
Legal History
The following cases involve Taylor Morrison's use of this clause type.
Taylor Morrison of Texas v. Ha
Homeowners sued Taylor Morrison alleging their home developed significant mold problems due to construction defects. Taylor Morrison moved to compel arbitration, including against the homeowners' minor children who were non-signatories. The Texas Supreme Court reversed the lower courts and held that minor children living in the home could be compelled to arbitrate under direct-benefits estoppel because their claims were factually intertwined with the purchase agreement. (660 S.W.3d 529)
Taylor Morrison of Texas v. Skufca
Homeowners alleged that less than a year after moving in, their home developed mold issues causing their minor children to become ill. In a companion ruling to Ha, the Texas Supreme Court reversed the Court of Appeals and compelled the minor children to arbitrate along with their parents, reinforcing that family members living in the home are bound by the purchase agreement's arbitration clause through direct-benefits estoppel.
Taylor Morrison of Texas v. Kohlmeyer
A subsequent home purchaser sued Taylor Morrison for construction defects. The appellate court rejected Taylor Morrison's motion to compel arbitration, finding that the theories of direct-benefits estoppel and implied assumption did not permit the builder to bind a subsequent purchaser to the mandatory arbitration clause in the original purchase agreement.
Wiener v. Taylor Morrison Services, Inc.
Homeowners alleged that stucco installation on their residence violated the Florida Building Code. The trial court ordered arbitration, but the appellate court reversed, holding that the homeowners' stucco defect claims fell outside the scope of the ten-year structural warranty's arbitration clause. The court ruled the plain language of the warranty determines which issues are arbitrable.
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 | Mandatory arbitration clauses in Texas new construction contracts are likely enforceable. Texas has... |
| Florida | Likely Enforceable | Mandatory arbitration clauses in Florida new construction contracts are likely enforceable. Florida... |
| Arizona | Likely Enforceable | Mandatory arbitration clauses in Arizona new construction contracts are likely enforceable. Arizona... |
| California | Uncertain | The enforceability of mandatory arbitration clauses in California new construction contracts is... |
| Colorado | Likely Enforceable | Mandatory arbitration clauses in Colorado new construction contracts are likely enforceable.... |
| Georgia | Likely Enforceable | Mandatory arbitration clauses in Georgia new construction contracts are likely enforceable. Georgia... |
| North Carolina | Likely Enforceable | Mandatory arbitration clauses in North Carolina new construction contracts are likely enforceable.... |
| Oregon | Likely Enforceable | Mandatory arbitration clauses in Oregon new construction contracts are likely enforceable. Oregon... |
| Washington | Likely Enforceable | Mandatory arbitration clauses in Washington new construction contracts are likely enforceable.... |
| Nevada | Likely Enforceable | Mandatory arbitration clauses in Nevada new construction contracts are likely enforceable. Nevada... |
Related Clauses in Taylor Morrison Contracts
This clause often works in combination with other provisions in Taylor Morrison's purchase agreements.
The class action waiver and arbitration clause work together to ensure all disputes are handled individually in private proceedings.
Disputes over deposit forfeiture must be resolved through arbitration, where the cost of pursuing a claim may exceed the deposit amount.
Warranty disputes with third-party administrators may also be subject to mandatory arbitration.
Challenges to the habitability waiver must be pursued in arbitration rather than court.
What Buyers Can Do
- Understand the arbitration process before signing. Review which arbitration provider is specified, who selects the arbitrator, and whether you have any right to appeal. These details significantly affect the fairness of the process.
- Research the arbitration provider's track record. The specified arbitration provider may have a history with builder disputes. Understanding the provider's procedures and typical outcomes can help you prepare.
- Review the Taylor Morrison of Texas case. The Taylor Morrison of Texas v. Ha ruling may be relevant to your situation. If you are buying a Taylor Morrison 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 Taylor Morrison contracts that collectively limit buyer remedies. A contract scan can identify all of them.