It Is Not Just Texas. Builders All Over the Country Are Cutting Corners, and Mold Is the Bill Coming Due.

Quick answer: On August 24, 2026, The Wall Street Journal reported that homeowners across the country are suing America’s biggest homebuilders over mold, and the builders’ own numbers say those homeowners are getting traction. D.R. Horton’s legal reserves climbed 57% to $1.1 billion. Lennar’s self-insurance reserve rose 21% to $336.9 million. The alleged defects are not exotic. They are undersized HVAC systems, windows installed wrong, attics that do not breathe, roofs that let water in. Moisture gets trapped, mold grows, and the family living there gets sick and gets stuck. If that is your house in Texas, the Residential Construction Liability Act, Chapter 27 of the Texas Property Code, controls how you have to go about it, and the Texas deadlines are shorter and harder than most homeowners believe. Your clock is probably already running.

Key takeaways

• This is a national story, not a Texas story. Reported cases involve Louisiana, Florida, Nevada, South Carolina, and Texas.
• D.R. Horton resolved 405 construction-defect claims for $57.2 million in the past year, more than double both the volume and the cost from 2022.
• The alleged defects are unglamorous and repeatable: undersized HVAC, bad window installation, unvented attics, bad roof work. That combination traps moisture, and trapped moisture grows mold.
• There is no agreed standard for mold-spore testing, and that is why these cases turn into expert wars. In one home, competing assessments came back at 2.2 million spores per cubic meter and 500 spores per cubic meter. Same house.
• In Texas, you must give the builder written notice by certified mail before the 60th day preceding suit, and let the builder conduct up to three inspections during the 35 days after it gets your notice. Tex. Prop. Code § 27.004(a).
• Texas deadlines: two years for negligence and DTPA claims, four years for written contract and warranty claims, and an absolute outer cutoff, the statute of repose, at six or ten years after substantial completion depending on your contract date and your warranty. Tex. Civ. Prac. & Rem. Code §§ 16.003, 16.009, 16.051.

Here is what the Journal actually reported

So a reporter went and did the work, and what came back is not a feel-good story about a few unlucky families. It is a pattern.

The Journal’s August 24, 2026 piece, Mold Is Driving America’s Homeowners Crazy, and They Want Builders to Pay, describes homeowners suing D.R. Horton, the largest homebuilder in America, and Lennar, over mold in homes that were supposed to be brand new. Not eighty-year-old bungalows with a leaky roof, right? New construction. Houses people saved for, financed for thirty years, and moved their kids into.

The numbers in the story are the part I want you to sit with, because the numbers are the confession. D.R. Horton’s legal reserves went up 57% to $1.1 billion across fiscal 2022 through 2025. Lennar’s self-insurance reserve went up 21% to $336.9 million in fiscal 2025. In the last year alone D.R. Horton resolved 405 construction-defect claims for $57.2 million, which is more than double the count and more than double the money compared to 2022.

Now, a reserve is just an accounting entry. I want to be careful and fair here. A company setting money aside is not the same thing as a company admitting it did something wrong, and both builders dispute these claims. But here is the thing about reserves, and this is Colby talk, not accounting talk: nobody sets aside a billion dollars for a problem they think is going away.

The scale is the other piece. Thousands of Louisiana homeowners are suing D.R. Horton over moisture damage. The Seminole Tribe of Florida sued Lennar over roughly 450 homes with alleged roof and mold problems. One homeowner in the reporting, Ashley Frazier, bought her home in 2021 and says she has dealt with asthma attacks, headaches, dizziness, and rashes. Her home’s value, per the reporting, went from $318,700 down to $117,000. And she expects to spend around $75,000 on experts just to prove her case.

Read that last sentence again. Seventy-five thousand dollars in expert costs, on a house now worth a hundred and seventeen. That right there is the whole problem in one line, and I am going to come back to it.

If you want the earlier chapter of this story, we wrote about the first wave of this reporting back in May: National Surge in Shoddy Homebuilding Hits Texas. This post is the update, and the mold piece is new.

It is not just Texas

People ask me all the time whether this is a Texas thing, like there is something in the soil down here, or the humidity, or the way Houston builders do it. And I get why. Our clay moves, our summers are brutal, our air is wet nine months out of the year. It would be convenient if this were a regional problem.

It is not a regional problem.

Look at where these cases are: Louisiana, Florida, Nevada, South Carolina, Texas. Those are five different climates, five different soil profiles, five different sets of building codes and inspectors. Nevada is a desert. Florida is a swamp. Louisiana homeowners are suing over HVAC systems that allegedly were not built to handle Gulf humidity. In Henderson, Nevada, a homeowner named Beth Horio has been fighting PulteGroup over a sinking foundation and cracks spreading across her ceilings, and Pulte acknowledged that about 5% of the homes in one community there may have had soil issues.

So what is the common thread? It is not the weather. It is not the dirt. The common thread is national builders running a national playbook: build fast, build to a price, use the same subcontractors and the same details in Baton Rouge that you used in Henderson, and move on to the next lot. When the same company builds the same house the same way in five states, you get the same failures in five states. That is not a mystery, that is just math.

And I will say the quiet part. Nobody is putting mold in a house on purpose. This is not villainy, it is volume. It is what happens when speed is the metric and the person who has to live in the result is not in the room when the decisions get made.

I am not the only one saying it, and I am not even the loudest. Ernest Freeman, a Houston attorney quoted in the reporting, put it about as plainly as it can be put: “There’s a frenzy of building activity, and everyone is in a hurry.”

That is it. That is the whole diagnosis in fourteen words. Everyone is in a hurry.

The defects are boring, and that is exactly the point

Here is what homeowners get wrong when they think about construction defects. They picture something dramatic. A wall falling down, a roof collapsing, something you could point a camera at.

The alleged defects in these cases are the opposite of dramatic. Per the reporting, they are:

• HVAC systems sized wrong. The reporting describes undersized units. An air conditioner that is too small for the house runs and runs and never actually wins, and it never pulls the humidity load out of the air. The thermostat can read 72 and the house is still swimming.
• Windows installed wrong. Flashing done poorly, water finds a path into the wall cavity, and you never see it until the drywall tells on it.
• Attics that do not ventilate. Heat and moisture sit up there with nowhere to go.
• Roofs installed improperly. Same story, water gets in where it should not.

Every one of those is invisible from your living room. Every one of those passed an inspection at some point. And every one of those does the same thing, which is trap moisture inside an assembly that was supposed to stay dry. Trapped moisture grows mold. That is not a legal theory, that is biology.

If some of those words are new to you, we keep a plain-English glossary of the trade language that shows up in these files: Construction Terms, Explained.

Why does it matter that the defects are boring? Because boring defects hide. A dramatic failure gets discovered in month two, while everybody’s warranty is still alive and everybody’s memory is still fresh. An undersized air handler gets discovered in year four, when your kid has had a cough for two winters and somebody finally pulls a vent cover.

Why builders have been winning these fights

Let me walk you through the three walls, because if you understand the walls you understand why so few of these cases ever get heard. And if you want the longer version of why this whole area of law is its own animal, read Why Construction Disputes Are Unlike Any Other Legal Fight.

Wall one: forced arbitration

You signed it. Everybody signs it. It was on page nineteen of a stack you initialed at closing while somebody slid the next page over. That clause says that if you ever have a dispute with the builder, you do not get a courtroom and you do not get a jury. You get a private arbitrator, usually with limited discovery, limited appeal, and no public record.

Arbitration is the builder’s home field. That is not a controversial statement, and you do not need a statistic to see why: the builder is a repeat player in that forum and you will be there exactly once in your life.

Wall two: the warranty windows

Builder warranties sound generous until you read the tiers, and in Texas the tiers are not just marketing. They are baked into the statute, and I will explain why that matters in a minute.

The typical package runs one year on workmanship and materials, two years on the plumbing, electrical, heating and air-conditioning delivery systems, and a longer period, six or ten years, on major structural components. Now go back to the defect list. An undersized HVAC unit is a mechanical systems problem, so you are inside a two-year window. Bad window flashing is workmanship, so you are inside a one-year window. By the time the mold shows up and somebody figures out the cause, the category that would have covered it has often expired.

That is not an accident of drafting. That is design.

Wall three: the cost of proof, and the fact that nobody agrees on the science

Back to Ashley Frazier and her $75,000. To win a mold case you generally need an industrial hygienist, a building envelope or HVAC engineer, sometimes a medical expert on causation, and a valuation expert on what the house lost. That is real money, spent up front, on a house whose value has already cratered. Most families do not have that sitting around, and the builder knows it.

But here is the part that really tells you what these fights look like from the inside, and I do not think most homeowners have any idea. There is no agreed standard for mold-spore testing. None. So you test the house and the builder tests the house and you get two numbers that are not in the same universe.

In Frazier’s home, according to the reporting, competing assessments came back at 2.2 million spores per cubic meter and 500 spores per cubic meter. Same house. Not double, not ten times. Roughly four thousand times apart.

And it runs all the way through to the repair bill. A South Carolina lawyer in the reporting said remediation estimates on a single property ranged from $50,000 to $1 million. Same property.

Think about what that does to a case. If nobody can agree what is in the air and nobody can agree what it costs to fix, then whoever can afford to buy the most credible expert is holding the better hand. That is not a level fight. That is a spending contest dressed up as a science question.

So there is the strategy, right? You cannot go to court, your warranty expired, and proving it costs more than you have. Three walls.

What changed

Homeowners started getting through wall one.

In Louisiana, Alicia and West Dixon sued D.R. Horton in March 2022 over mold and water intrusion they attribute to an HVAC system they say was not built for Louisiana humidity. D.R. Horton moved to force the case into arbitration. The Dixons won at the trial level in July 2025, and on December 11, 2025 a three-judge panel of Louisiana’s First Circuit Court of Appeal unanimously denied D.R. Horton’s challenge without a written opinion, keeping the case in state court. The plaintiffs have said they intend to pursue it as a class action on behalf of hundreds of other Louisiana homeowners. D.R. Horton has built more than 18,000 homes in Louisiana since 2007.

One ruling in one state, no written opinion, and it can still go up to the Louisiana Supreme Court. I am not going to oversell it. But when a case leaves arbitration and lands in front of a jury, the math changes for everybody at the table, and that is why plaintiffs’ lawyers around the country are watching arbitration challenges the way they are.

Here is the part I actually believe, and I have said this to every client I have ever signed. A corporation does not have a heart. It does not have blood. It does not have a soul. All a corporation has is money. And the only way you get a corporation to change how it builds a house is to make building it badly cost more than building it right. That is what a $1.1 billion reserve is. That is a company doing that arithmetic in public.

By the way, this idea is not new and it is not American. Builders have been on the hook for their work for about four thousand years, and we wrote that history up here: Construction: The 4,000-Year Hallmark of Civilization.

Now the Texas part, because Texas has its own rulebook

If your house is in Texas, you do not get to just be mad and file a lawsuit. There is a process, and skipping it can cost you money even when you are right. The full walkthrough is here: Residential Construction Disputes in Texas (2026): How to Sue Your Home Builder or Contractor. Here is the short version.

The RCLA notice, the inspections, and the offer

Most residential defect claims in Texas run through the Residential Construction Liability Act, Chapter 27 of the Texas Property Code. The RCLA does not create a new claim. What it does is tell you how you have to handle the claim you already have, and it forces a settlement opportunity before anybody sees a courthouse.

1. Written notice, before the 60th day preceding suit. You send the contractor written notice by certified mail, describing the defects in reasonable detail. Tex. Prop. Code § 27.004(a).
2. Let them inspect, up to three times. During the 35-day period after the contractor receives your notice, the contractor gets the opportunity to conduct up to three inspections. § 27.004(a).
3. The offer comes within 60 days. Not later than the 60th day after receiving your notice, the contractor may make a written offer of settlement. § 27.004(b).

Heads up if you have read older articles on this, including one of ours: the Legislature reworked this in 2023 with House Bill 2022, effective September 1, 2023. If a source tells you the builder has 45 days to make an offer, that source is describing the old version of the statute. It is 60 days now.

And this cuts both ways, which people do not expect. If you reject an offer that a court later decides was reasonable, your recovery gets capped at the fair market value of that last offer, plus only the reasonable costs and attorney’s fees you had already incurred when you rejected it. Tex. Prop. Code § 27.004(e). So the notice letter is not paperwork. The notice letter is strategy, and how you answer that offer is a decision with a number attached to it.

What you can actually recover

The statute spells this out, and it is a closed list. Under Tex. Prop. Code § 27.004(g), a claimant may recover only these economic damages proximately caused by a construction defect:

1. The reasonable cost of repairs necessary to cure the defect
2. The reasonable and necessary cost to replace or repair damaged goods in the residence
3. Reasonable and necessary engineering and consulting fees
4. The reasonable expenses of temporary housing during the repair period
5. The reduction in current market value after the defect is repaired, but only if the defect is a structural failure
6. Reasonable and necessary attorney’s fees
7. Reasonable and necessary arbitration filing fees and your share of the arbitrator’s compensation

Look hard at number five, because that is the one that bites in a mold case. The residual loss in value, the stigma, the thing that took Ashley Frazier’s house from $318,700 to $117,000, is recoverable under the RCLA only where the defect is a structural failure. A moisture and mold problem may or may not get there depending on the facts and the expert proof. That is a real limitation and you should know about it before you spend a dollar. We go deeper on the damages question here: What Damages Can I Recover in a Texas Construction Defect Case?

The deadlines, which are the part that actually kills claims

I will be frank with you. More Texas homeowners lose these cases to a calendar than lose them to a jury.

Statutes of limitations, running from when you discover or should have discovered the problem:

• Negligence: generally two years. Tex. Civ. Prac. & Rem. Code § 16.003.
• Texas Deceptive Trade Practices Act: generally two years. Tex. Bus. & Com. Code § 17.565.
• Breach of written contract or warranty: generally four years. Tex. Civ. Prac. & Rem. Code § 16.051.
• For hidden, latent defects, the discovery rule can delay the start of the clock. Texas courts apply it narrowly. Do not build your plan on it.

Statute of repose, the absolute outer wall no matter what you knew:

The default is ten years after substantial completion. Tex. Civ. Prac. & Rem. Code § 16.009.

But in 2023 the Legislature passed House Bill 2024 and cut that to six years for residential construction, and here is the trade the builder has to make to get it. To claim the shorter six-year window, the contractor has to provide a written warranty of at least:

• One year on workmanship and materials
• Two years on plumbing, electrical, heating, and air-conditioning delivery systems
• Six years on major structural components

That six-year period applies to contracts entered into on or after June 9, 2023. If you signed your build contract before that date, you are still under the ten-year repose.

Now stop and look at that middle line one more time, because this is the whole ballgame for a mold case. The warranty a Texas builder must give to earn the shorter repose period covers the air-conditioning delivery system for two years. Two. The exact component these lawsuits are about, and the express warranty on it dies in twenty-four months while the mold is still quietly working inside a wall.

Repose is the brutal one, because it can end your right to sue even if the defect was genuinely impossible for you to find. And the RCLA notice period does not buy you extra time. The notice clock and the lawsuit clock run at the same time.

So if you bought a new build in 2017 and you are reading this in 2026 thinking you will deal with that musty smell after the holidays, no. Deal with it this month.

What to do if you think this is your house

1. Document it now, and date everything. Photos, video, the smell, where it is worst, when it started. Pull your contract, your plans, your change orders, your warranty, your invoices, and every email and text you exchanged with the builder.
2. Get an independent inspection. Independent. Not the builder’s guy. A licensed engineer or a qualified building envelope inspector can tell you whether you are looking at a cosmetic problem or a moisture problem with a cause behind it.
3. Do not sign a release or cash a quick check until you understand what you are giving up. That check is usually cheaper than the repair, and that is why it showed up so fast.
4. Be careful with recorded statements. If your homeowner’s carrier gets involved, the adjuster is going to want one. Read this first.
5. Pin down two dates. When was construction substantially completed, and when did you first notice a problem. Those two dates drive everything.
6. Talk to a lawyer before you send the RCLA notice. The notice, and your answer to any repair offer, can cap what you recover under § 27.004(e). That is not a place to freelance.

For referring attorneys

We work with Texas lawyers on residential and commercial construction defect matters, including foundation, water intrusion, envelope, and mold cases. If you have a homeowner with a possible defect claim and a repose or limitations date you would rather not own, call early while there is still room to work. We handle the RCLA notice process and expert workup, we co-counsel, and where a file belongs with dedicated construction counsel we will tell you that straight instead of sitting on it.

Frequently asked questions

Is mold in a new home actually the builder’s fault?
Not automatically. Mold is a symptom. The legal question is what caused the moisture, and whether that cause traces back to design, workmanship, or materials. That is why the independent inspection matters more than the mold test.

I had a mold test done and the builder says the numbers are meaningless. Who is right?
That fight is real and it is not manufactured. There is no agreed standard for mold-spore testing, and competing assessments on the same house have come back thousands of times apart. That is exactly why the inspection that matters most is the one that finds the moisture source, not the one that counts spores.

My builder says it is a maintenance problem. Is that a real defense?
It is a real defense and builders use it, per the reporting. Sometimes they are right. The way you answer it is with an expert who can show the moisture source is inside the assembly, not on your side of the drywall.

I signed an arbitration clause. Am I finished?
No, but you are in a harder spot. Arbitration clauses can sometimes be challenged, and homeowners in other states have recently succeeded in doing exactly that. Whether it works depends on the specific contract language and the governing law. Have a lawyer read the clause before you assume anything.

How long do I have in Texas?
Generally two years for negligence and DTPA claims and four years for written contract and warranty claims, from when the defect was or should have been discovered. On top of that, a statute of repose ends the right to sue entirely six or ten years after substantial completion, depending on when you signed your contract and what warranty you got. Get your specific dates checked.

How long will the case take?
Longer than you want. We laid out realistic timelines here: How Long Does a Construction Defect Lawsuit Take in Houston, TX?

What is this going to cost me to prove?
Mold and moisture cases are expert-heavy, and experts are expensive. One homeowner in the Journal’s reporting expects roughly $75,000 in expert costs. That is why honest case selection matters, and why we will tell you early if the economics do not support the fight.

My house is worth less now because of this. Is that recoverable?
Under the RCLA, the reduction in market value after repair is recoverable only where the defect is a structural failure. § 27.004(g)(5). Whether a moisture and mold problem qualifies depends on the facts and the engineering proof, and it is one of the first things worth evaluating.

I live in a condo, not a single-family home. Is this the same analysis?
No, and the differences are significant, starting with who owns the wall the water is coming through. See Houston Condo and HOA Construction Defect Lawyers.

My homeowner’s insurance denied the mold claim. Is that separate?
It can be a separate fight with a separate set of rules. Start with What Is Considered Bad Faith by an Insurance Company in Houston?

The bottom line

Builders all over this country have been building fast, and the bill is coming due in Louisiana, in Florida, in Nevada, in South Carolina, and yes, here in Texas. The reserves are up. The claims are up. And homeowners are starting to get out of arbitration and in front of juries.

None of that helps you if your clock runs out first. So do the one thing that is actually in your control today: get the house looked at by somebody independent, and find out what your dates are. Do that this month.

Related reading

• National Surge in Shoddy Homebuilding Hits Texas: What Houston Property Owners Need to Know About Large-Scale Construction Defects
• Residential Construction Disputes in Texas (2026): How to Sue Your Home Builder or Contractor
• What Damages Can I Recover in a Texas Construction Defect Case?
• How Long Does a Construction Defect Lawsuit Take in Houston, TX?
• Houston Condo and HOA Construction Defect Lawyers
• Why Construction Disputes Are Unlike Any Other Legal Fight
• Construction Terms, Explained: A Plain-English Glossary
• Construction: The 4,000-Year Hallmark of Civilization
• What Is Construction Law?
• Podcast 008: The Blueprint to Protecting Yourself from Construction Defects

About The Law Offices of Colby Lewis

The Law Offices of Colby Lewis is a Houston-based firm representing clients across Texas in personal injury, commercial litigation, construction disputes, and insurance bad faith matters.

If you think your home has a moisture or mold problem that traces back to how it was built, call us and we will help you figure out what your deadlines are and what the next step should be.

(866) 265-2948 • 815 Walker St. Suite 452 Houston, Texas 77002 • Se habla español

Sources and authorities

News reporting

• Wall Street Journal, Mold Is Driving America’s Homeowners Crazy, and They Want Builders to Pay, August 24, 2026. https://www.wsj.com/us-news/law/mold-is-driving-americas-homeowners-crazyand-they-want-builders-to-pay-5cc180b7
• Benzinga (via TradingView), Mold Is Becoming A Costly New Headache For Homebuilders: D.R. Horton And Lennar Are Paying The Price, August 2026. https://www.tradingview.com/news/benzinga:fb740b374094b:0-mold-is-becoming-a-costly-new-headache-for-homebuilders-d-r-horton-and-lennar-are-paying-the-price/
• Benzinga, Mold Is Becoming a Costly New Headache for Homebuilders, August 2026. https://www.benzinga.com/real-estate/26/08/61380432/mold-lawsuits-home-builders-legal-costs
• The Real Deal, Builders Hit With Wave of Defect Claims as Reserves Swell, May 19, 2026. https://therealdeal.com/national/2026/05/19/builders-hit-with-wave-of-defect-claims-as-reserves-swell/
• Moneywise, Homebuilders face wave of claims of poor construction, 2026. https://moneywise.com/news/real-estate-news/homebuilders-construction-defect-claims-dr-horton-lennar
• Edgen, Homebuilder Legal Costs Surge as Defect Claims Rise by 57%, 2026. https://www.edgen.tech/news/post/homebuilder-legal-costs-surge-as-defect-claims-rise-by-57
• The Advocate (Baton Rouge), Homeowners win on key issue in Louisiana appeals court for D.R. Horton moldy houses lawsuit. https://www.theadvocate.com/baton_rouge/news/courts/horton-lawsuit-louisiana-homebuilder/article_2453105c-c772-4b73-8e02-f38c703c1506.html

Texas authority

• Residential Construction Liability Act, Tex. Prop. Code ch. 27, and specifically § 27.004 (notice, inspections, offer of settlement, effect of rejecting a reasonable offer, and recoverable economic damages), as amended by Acts 2023, 88th Leg., H.B. 2022, eff. Sept. 1, 2023. https://statutes.capitol.texas.gov/Docs/PR/htm/PR.27.htm
• Tex. Civ. Prac. & Rem. Code § 16.003 (two-year limitations period). https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm
• Tex. Civ. Prac. & Rem. Code § 16.051 (residual four-year limitations period). https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm
• Tex. Civ. Prac. & Rem. Code § 16.009 (ten-year statute of repose for persons furnishing construction or repair of improvements), as amended by Acts 2023, 88th Leg., H.B. 2024 (six-year repose for qualifying residential construction with a written 1-2-6 warranty; applies to contracts entered into on or after June 9, 2023). https://statutes.capitol.texas.gov/Docs/CP/htm/CP.16.htm
• Texas Deceptive Trade Practices Act, Tex. Bus. & Com. Code § 17.565 (two-year limitations period). https://statutes.capitol.texas.gov/Docs/BC/htm/BC.17.htm
• Dixon v. D.R. Horton, Louisiana First Circuit Court of Appeal ruling of December 11, 2025 (denial of writ on arbitration, no written opinion), as reported by The Advocate.

This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. The lawsuits and allegations described here are drawn from published news reporting and public court records and are allegations that the builders dispute and that have not been proven. Every case is different, and prior results do not guarantee a similar outcome. For advice about your situation, consult a licensed Texas attorney.