New Construction Earnest Money: Protecting Your Deposit in Michigan and Ohio

Описание: In the real estate markets of Michigan and Ohio, "New Construction" earnest money is legally distinct from standard home sales. While standard deals use neutral escrow, many builders use "Builder-Held Deposits," meaning your money goes directly into the builder’s operating account.

In this video, a Michigan and Ohio attorney explains the legal reality of construction deposits in 2026. We look at the "Non-Refundability Clause": many builder contracts state that the deposit becomes non-refundable after a short "design period," even if you eventually lose your financing. You'll learn about Ohio’s Home Construction Service Suppliers Act (HCSSA), which limits deposits for certain projects, and Michigan’s general contract rules that allow builders to keep deposits as "liquidated damages" if the buyer walks away.

We also discuss Escrow Protections. In both states, you can negotiate to have your deposit held by a Title Company rather than the builder, ensuring the money is only released when specific milestones are met. Whether you are picking out floor plans or signing the final contract, understanding the "Default Provisions" is the only way to ensure your five-figure deposit doesn't vanish if the project hits a snag.

✅ In this video, a Michigan and Ohio attorney explains builder-held escrow, custom material surcharges, and how to negotiate for deposit protection.

Disclaimer: This video is for educational purposes only and does not create an attorney-client relationship.

Among legal topics covered in this video:

Builder-Held Escrow: Why letting a builder hold your deposit is essentially an interest-free loan with zero security.

HCSSA (Ohio): Navigating the 10% limit on upfront payments for home construction services in Ohio.

Financing Contingencies: Why builders often try to remove the right to a refund if your mortgage is denied.

Customization Fees: How "Change Orders" can turn a refundable deposit into a non-refundable one in Michigan and Ohio.

The "Good Funds" Law (Ohio): Why deposits over $1,000 must be wired and how this affects your builder payment.

Insolvency Risks: What happens to your earnest money if the builder files for bankruptcy before the house is finished?

Michigan & Ohio attorney David Soble and the Soble Law team are dedicated to the success of their clients in the areas of real estate, contracts, and financial disputes. As part of our commitment, we actively write, publish, and create books, articles, podcasts, slide presentations, and newsletters—all designed to simplify complicated legal concepts related to real estate and finance.

We strive to make these resources user-friendly and practical so that anyone with a legal concern can understand how to reduce their legal liability and financial exposure.

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