Great Southern Homes Lawsuit and Corporate Crisis: Mart and UHG Cases

The Great Southern Homes lawsuit most often searched is Mart v. Great Southern Homes, Inc., a South Carolina putative class action in which a homebuyer challenged the builder’s warranty contract language and was ordered to arbitration by the state Court of Appeals in September 2023. Separately, the builder’s former parent company, United Homes Group, is defending a federal securities fraud class action filed after a 2026 forced sale to Stanley Martin Homes.

The Mart Homebuyer Class Action

Jonathan Mart, a Great Southern Homes buyer, sued the Irmo, South Carolina builder individually and on behalf of a proposed class of similarly situated homeowners. He brought claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, and asked the court to declare two of the company’s contract practices unenforceable: requiring buyers to waive the implied warranty of habitability without separate consideration, and transferring the builder’s warranty obligations at closing to a third-party provider, StrucSure Home Warranty.¹

Mart did not allege that his home had construction defects or that Great Southern Homes had refused a warranty claim. His case targeted the standard contract itself, arguing that buyers were at a “significant disadvantage in sophistication and bargaining power” when signing and that the sales practices stripped them of warranty rights implied by South Carolina law.¹

Why the Case Went to Arbitration

Great Southern Homes moved to compel arbitration under a clause in its sales contract. The circuit court refused, finding that the arbitration provisions in the sales contract and the separate StrucSure express limited warranty conflicted in material ways, including which law governed and how arbitrators would be selected. In the circuit court’s view, there was no genuine agreement on how arbitration would work.¹

On September 13, 2023, the South Carolina Court of Appeals reversed. Applying the U.S. Supreme Court’s Prima Paint doctrine and the South Carolina Supreme Court’s 2022 decision in Damico v. Lennar Carolinas, LLC, the appeals court held that an arbitration clause must be evaluated on its own, apart from the rest of the contract and from any supplemental warranty document. Read that way, the sales contract’s arbitration clause contained no oppressive or one-sided terms.²¹

The court distinguished Damico, where the same separability principle led the state Supreme Court to strike down Lennar’s specific arbitration provisions as unconscionable. The Great Southern Homes clause, the appeals court said, lacked the oppressive features the Damico court had identified, and Mart had not separately challenged the standalone clause on unconscionability grounds. The court also reaffirmed that a “take-it-or-leave-it” adhesion contract is not automatically unconscionable under South Carolina law; unconscionable terms are those “so oppressive that no reasonable person would make them and no fair and honest person would accept them.”¹

What the Ruling Did and Did Not Decide

The Court of Appeals sent the case back with instructions to proceed to arbitration. It did not decide whether the implied warranty waiver was valid, whether transferring warranty obligations to StrucSure was enforceable, or whether the builder’s contract practices actually breached any duty owed to buyers. Those questions were left for an arbitrator.¹

The practical effect for buyers signing Great Southern Homes contracts in South Carolina is that disputes over the warranty structure go to arbitration rather than court, and any class-wide adjudication of those contract terms is foreclosed unless a future plaintiff mounts a targeted unconscionability challenge to the arbitration clause itself.

Homeowner Complaints Outside the Lawsuit

Mart’s case did not involve any specific defect. Separately, homeowners have reported construction and warranty issues to the Better Business Bureau, which lists 15 complaints in the preceding three years and gives Great Southern Homes an A+ rating with accredited status as of mid-2026.³

Recurring themes include moisture and mold in bathrooms, electrical breaker trips, buckling floors, and sinkholes in yards. Some buyers describe the warranty department as difficult, alleging the company classifies defects as “housekeeping” or “non-warrantable.” A few complaints allege misrepresentation of community amenities such as pools and cabanas that were advertised but not built. The company’s responses generally state that reported items are cosmetic rather than warrantable, that repairs offered were courtesies, and that certificates of occupancy and third-party inspections show code compliance.³

The Shareholder Class Action Against United Homes Group

Great Southern Homes became a subsidiary of the publicly traded United Homes Group in March 2023 through a merger with the SPAC DiamondHead Holdings Corp. A dual-class share structure gave founder Michael Nieri’s family roughly 79% of total voting power through Class B shares carrying ten votes each, compared to one vote per Class A share held by public investors.⁴⁵

In May 2025, UHG announced that a special committee of independent directors would explore strategic alternatives, including a potential sale. The committee ultimately concluded that remaining independent was in shareholders’ best interest and asked Nieri to step down as executive chairman and forgo remaining cash compensation. He refused. On October 19, 2025, six of the company’s seven board members resigned. Four of them explicitly cited disagreement with Nieri. UHG stock fell 52.46% the next day, closing at $2.03 per share.⁶⁷⁵

On February 22, 2026, UHG announced it had agreed to be acquired by Stanley Martin Homes, LLC for $1.18 per share in cash, more than a 50% discount to the stock’s preceding trading price and a total deal value of roughly $221 million. Nieri, holding about 70% of the voting power, signed a written consent approving the merger, which satisfied the stockholder approval requirement without a broader vote. Stanley Martin closed the acquisition on May 4, 2026.⁸⁹

The Claims and the Class Period

Kadiyam v. United Homes Group, Inc., Case No. 1:26-cv-02989, is pending before Judge Lewis J. Liman in the U.S. District Court for the Southern District of New York. The lead plaintiff deadline was June 9, 2026.¹⁰

The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. It claims Nieri used his controlling stake to deliberately devalue the company and force a sale on terms that harmed public shareholders, and that the defendants concealed his intent to push out the independent directors and drive through the Stanley Martin transaction at what the complaint calls a “fire-sale” price. The class period runs from May 19, 2025, when UHG disclosed the special committee’s formation, through February 22, 2026, the date of the merger agreement.⁵¹⁰

The case remained pending as of mid-2026.

The Newry Mill Controversy Is Not a Lawsuit

A separate 2025 controversy involving a proposed 600-acre Newry Mill development in Oconee County drew scrutiny to Great Southern Homes’ corporate network because former Clemson president James Clements and former South Carolina governor Nikki Haley had both sat on the UHG board. This produced an inspector general review of Clemson’s relationship with the developer, requested by South Carolina Senate President Thomas Alexander in January 2026, not a lawsuit against Great Southern Homes. Reporting in April 2026 indicated that Clemson was found to have engaged in no wrongdoing.¹¹¹²

1
Findlaw. Mart v. Great Southern Homes, Inc.
2
South Carolina Judicial Branch. Mart v. Great Southern Homes, Inc., Opinion No. 6026
3
Better Business Bureau. Great Southern Homes Complaints
4
SPAC Insider. DiamondHead Closes Great Southern Homes Deal
5
Levi & Korsinsky, LLP. United Homes Group Inc. Class Action Lawsuit
6
The State. Law Firms Investigating SC Homebuilding Company
7
U.S. Securities and Exchange Commission. United Homes Group Form 8-K, October 2025
8
U.S. Securities and Exchange Commission. United Homes Group 8-K, February 2026
9
Virginia Business. Stanley Martin Homes Completes Acquisition of United Homes Group
10
Kessler Topaz Meltzer & Check, LLP. United Homes Group Inc. Class Action Lawsuit
11
SC Daily Gazette. SC Inspector General to Review Clemson Relationship With Upstate Housing Developer
12
The Tiger. Newry Mill Investigation