Overview
Taylor Morrison operates in Texas with communities across the Austin, Dallas-Fort Worth, Houston, and San Antonio metropolitan areas. Texas is one of the company's largest markets by volume, and the company builds single-family homes at various price points including active-adult communities acquired through its 2018 AV Homes acquisition.
Texas law governs many of Taylor Morrison's core contract provisions through the Residential Construction Liability Act (RCLA) and the Deceptive Trade Practices Act (DTPA). The Texas Supreme Court has issued significant rulings on Taylor Morrison's arbitration clauses, including extending their reach to non-signatory family members.
How Texas Law Affects Your Contract
The following analysis examines how Taylor Morrison's documented contract patterns interact with Texas consumer protection law.
Arbitration Expanded by Texas Supreme Court
In Taylor Morrison of Texas v. Ha (2023) and Taylor Morrison of Texas v. Skufca (2023), the Texas Supreme Court upheld Taylor Morrison's broad arbitration clause (ARB-001) and extended its reach to non-signatory minor children living in the home under direct-benefits estoppel. These rulings significantly strengthen the enforceability of Taylor Morrison's arbitration provisions in Texas.
Subsequent Purchaser Limitations
In Taylor Morrison of Texas v. Kohlmeyer (2020), a Texas appellate court rejected Taylor Morrison's motion to compel arbitration against a subsequent home purchaser, finding that the theories of direct-benefits estoppel and implied assumption did not bind a non-signatory subsequent purchaser. This limits the arbitration clause's reach for resale buyers.
RCLA Notice Requirements
Before filing a construction defect lawsuit in Texas, homeowners must provide written notice under the Residential Construction Liability Act (Tex. Prop. Code §§ 27.001-27.007) and allow a 60-day inspection and repair period. This statutory requirement applies regardless of the Taylor Morrison purchase agreement's terms.
Habitability Waivers Under Texas Law
Texas does not recognize a statutory implied warranty of habitability for new construction. Taylor Morrison's habitability waiver clause (HAB-001) carries significant weight in Texas. Buyers rely primarily on the builder's express tiered warranty (WAR-001), common law protections, and the DTPA for recourse.
Deposit Forfeiture and Financing Contingencies
Taylor Morrison's deposit forfeiture provisions (DEP-001) are subject to Texas contract law. Deposits of $7,500 to $20,000 have been documented as retained when buyers failed to close, including situations involving financing contingency windows as short as 45 days. Texas courts generally enforce liquidated damages clauses if they are a reasonable estimate of anticipated damages.
Texas Legal History
Selected cases and investigations involving Taylor Morrison in Texas.
Taylor Morrison of Texas v. Ha
Homeowners alleged construction defects causing significant mold problems. The Texas Supreme Court 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.
Taylor Morrison of Texas v. Skufca
In a companion ruling to Ha, the Texas Supreme Court reversed the Court of Appeals and compelled 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.
Taylor Morrison of Texas v. Kohlmeyer
A subsequent home purchaser sued Taylor Morrison for construction defects. The appellate court rejected the builder's motion to compel arbitration, finding that direct-benefits estoppel did not bind a subsequent purchaser to the original agreement's arbitration clause.
Relevant Texas Laws
Provides buyers with additional remedies for misleading representations made during the home sales process, including the potential for treble damages in cases of knowing or intentional conduct.
Requires homeowners to provide written notice and a 60-day inspection period before filing a construction defect lawsuit against a builder.
Governs express warranty obligations for residential construction. Texas does not impose a statutory implied warranty of habitability on new home builders.
Texas Key Facts
- 1Texas does not have a statutory implied warranty of habitability for new construction.
- 2Mandatory arbitration clauses are generally enforceable under both the Federal Arbitration Act and the Texas General Arbitration Act.
- 3Texas has no statutory cooling-off period for new construction purchase agreements.
- 4The Texas Residential Construction Commission was abolished in 2009.
- 5The RCLA requires 60-day written notice to the builder before filing a construction defect lawsuit.
- 6The DTPA allows consumers to seek damages for false, misleading, or deceptive acts in the sale of goods and services, including new homes.
What Texas Buyers Should Know
- Understand the expanded reach of the arbitration clause in Texas. The Texas Supreme Court has ruled that Taylor Morrison's arbitration clause binds not only the signing buyer but also non-signatory family members, including minor children, living in the home. Review this clause carefully before signing.
- Know the RCLA notice requirement before considering legal action. Texas law requires 60 days' written notice to the builder before filing a construction defect lawsuit. An attorney familiar with the RCLA can help you comply with this mandatory pre-suit requirement.
- Understand that Texas lacks a statutory habitability warranty. Texas does not guarantee by statute that a newly built home will be habitable. Your protections depend primarily on Taylor Morrison's express tiered warranty, common law, and the Deceptive Trade Practices Act.
- Compare Taylor Morrison Home Funding with independent lenders. Taylor Morrison offers incentives conditioned on using its affiliated lender (LEN-001). Compare rates, fees, and loan terms with at least two independent lenders. Verify that any quoted monthly payment includes property taxes, homeowner's insurance, and HOA fees.
- Review deposit refund terms and financing contingency windows. Taylor Morrison contracts may include financing contingency windows as short as 45 days. If you cannot secure financing within this window, your deposit may be treated as non-refundable liquidated damages. Understand the specific deadlines in your contract.