Construction Defects and Energy Codes Collide in Wave of Builder Litigation
Home builders face mounting lawsuits from thousands of homeowners claiming construction defects caused mold growth that damaged their health and property. D.R. Horton’s reserves for legal claims rose 57% to $1.1 billion from fiscal 2022 to fiscal 2025, while Lennar’s self-insurance reserve climbed 21% in fiscal 2025 to $336.9 million. Plaintiffs allege builders installing improperly sized HVAC systems, incorrectly placed windows, and poorly ventilated attics as they rush to complete homes. Damages sought in many cases exceed the total value of the homes involved.
Modern energy efficiency codes require homes to be tightly sealed and insulated, which limits air exchange and reduces a building’s ability to dry out after moisture intrusion. Architecture professor Christine Williamson at Virginia Tech said the industry standard of care needs to improve, particularly around window installation. Builders in the humid Southeast face particular risk when construction mistakes trap moisture inside highly insulated homes. Defense attorneys say plaintiff lawyers rely on inconsistent testing methods and mold assessors with questionable credentials, with experts on opposite sides valuing the same remediation work anywhere from $50,000 to $1 million.
Medical researchers say limited scientific evidence supports many health claims attributed to mold, though studies have linked it to exacerbating asthma and respiratory issues. Online communities and functional wellness practitioners connect mold exposure to symptoms from emotional disturbance to heart problems, fueling what defense attorneys describe as growing hysteria. Homeowners who sue often spend tens of thousands on expert witnesses, while the presence of mold requires disclosure to future buyers in many states, destroying resale values. One Texas homeowner saw her property assessment drop from $318,700 to $117,000 after mold was discovered.
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