Florida lawsuit alleges builder of Hardeeville development misled homebuyers on taxes
The developer behind a brand-new residential community in Hardeeville is being sued in Florida for allegedly lowballing buyers on their total monthly costs.
Texas-based D.R. Horton is being sued by five plaintiffs for allegedly giving buyers quotes that were lower than their payments. The plaintiffs allege that D.R. Horton and its mortgage arm, DHI Mortgage (DHIM), knowingly suppressed anticipated property tax estimates, leading to monthly payments that were actually about $1,000 more than initially laid out.
One plaintiff, Frankie Santiago, said he was promised a $2,164.68 monthly payment by the company, but ended up paying $3,136.33 less than a year after closing when a new servicer conducted an escrow analysis. The four other plaintiffs said they were promised a $2,602.47 monthly payment; they paid $2,597.84 for almost two years, but after an escrow analysis that payment increased to $3,439.07.
In the lawsuit, the plaintiffs argued that D.R. Horton and DHIM knowingly misrepresented the actual monthly costs. Through a spokesperson, D.R. Horton said the allegations are untrue.
“D.R. Horton and DHI Mortgage strongly disagree with the claims made in the lawsuit, and we intend to vigorously defend against them,” spokeswoman Jessica L. Hansen said in an emailed statement. “D.R. Horton and DHIM have been, and will continue to be, unwavering in our commitment towards transparency with our customers.”
D.R. Horton bills itself as the largest homebuilder in the U.S., and has a sizable presence in the Lowcountry and the rest of South Carolina. The company is building the new Carolina Station development in Hardeeville, a planned 2,600 acre mixed-use community designed to usher a new wave of buyers into the growing city. It is also one of the contractors in a statewide program designed to build more workforce housing.
The company focuses on starter homes, move-ups, active adult and luxury houses. Homebuilding operations accounted for 92% of the company’s consolidated revenues in 2024; the company has homebuilding operations in Hilton Head, Charleston, Columbia, Myrtle Beach and Greenville/Spartanburg, according to its 2024 annual report.
This is not the first time D.R. Horton has faced legal trouble. In January, the State newspaper reported that about 60 lawsuits were filed against the company in Richland, Lexington and Horry counties, alleging major flaws in D.R. Horton-built homes.
The lawsuit comes at a time when many Americans are concerned about housing costs.
Goldman Sachs analysts found that the U.S. home price-to-income ratio is 4.42, higher than its peak of 4.1 in 2006 during the early 21st century housing boom. The average monthly mortgage payment has gone from less than 20% of a potential buyer’s income before the pandemic to more than 30% since 2022.
Mortgage rates hit a 20-year high in 2022 and have sustained ever since, the financial firm said. The 30-year fixed mortgage rate was 6.22% on Nov. 6, lower than this time last year, but significantly higher than 3.87% ten years ago and 3.11% as recently as December 2021, according to Freddie Mac.
The Federal Reserve lowered interest rates by a quarter of a percentage point in September. Some experts said it could lead to a feeling of financial flexibility among consumers, but mortgage rates and interest rates don’t go hand in hand.