Before You Sign

This warranty is your legal right to a home that is safe and fit to live in. Some builders ask you to waive it entirely. In some states, this waiver has been found unconscionable by courts.

Arbitration clauses eliminate your right to sue in court or have a jury hear your case. Disputes go to a private arbitrator, often through a process the builder is more familiar with than you are.

This clause prevents you from joining with neighbors who may have the same issues. It forces each buyer to fight the builder alone, which can make legal action cost-prohibitive for individual claims.

Know exactly what triggers forfeiture and how much you could lose. Some contracts allow the builder to keep 10-15% of the purchase price if you back out for any reason, including defects found during inspection.

Many builder contracts impose fines of $100-$250+ per day if you delay closing. This creates financial pressure to close even if problems are discovered during the final walkthrough.

Understand whether the builder's repair obligations are limited to items identified during a single walkthrough. If something is not on the punch list, the builder may argue they have no obligation to fix it.

Some contracts restrict when you can inspect, what areas your inspector can access, or state that the builder has no obligation to address your inspector's findings. Know your rights before you schedule an inspection.

This clause determines whether the builder can swap the materials, fixtures, and finishes you were shown for cheaper alternatives. Look for language like "equivalent quality" or "at builder's discretion."

The builder's limited warranty likely excludes certain defects — commonly drainage, grading, mold, and soil settlement. Know what is not covered before you sign.

Some warranties can be voided if you fail to follow the builder's maintenance schedule, make your own repairs, or miss tight claim deadlines. Understand what actions could cause you to lose coverage.

This clause may prevent you from recovering the full cost of repairs, temporary housing, or other damages — even if the builder is proven to be at fault.

A certificate of occupancy is the government's confirmation that the home meets minimum building codes. Some contracts state that the builder's failure to obtain one is not grounds to delay closing.

Builders may only need to "substantially" complete the home before requiring you to close. This can mean moving into a home with unfinished work and relying on post-closing promises to complete it.

This clause makes the builder's limited warranty your only legal option. It may prevent you from pursuing claims for breach of contract, negligence, or violations of state consumer protection laws.

Some contracts reduce the time you have to take legal action from the state's standard (often 3-10 years) to as little as one year. Many construction defects do not appear until years after closing.

Know exactly what you lose by choosing your own lender instead of the builder's affiliated mortgage company. The difference can be $5,000-$20,000+ in lost incentives, closing cost credits, or upgrades.

The builder typically controls the HOA until a majority of lots are sold, sometimes for years. Understand when control transfers to homeowners and what financial obligations the builder has at that point.

Some contracts give the builder the right to change floor plans, lot grading, landscaping, community amenities, or home specifications without your consent and without giving you a right to cancel.

Verify whether the estimated monthly payment includes property taxes, homeowner's insurance, HOA dues, and any special assessments. Payment estimates that exclude these costs can be significantly lower than your actual obligation.

Do not skip addenda, exhibits, warranty booklets, or any document the builder asks you to sign. The most consequential clauses are often buried in sections that buyers are told are "standard" or "just boilerplate."