Overview
| Market Position | Largest luxury homebuilder in the United States |
| Stock Ticker | NYSE: TOL |
| Headquarters | Fort Washington, Pennsylvania |
| Founded | 1967 |
| Affiliated Lender | Toll Brothers Mortgage Company (formerly TBI Mortgage) |
| FY2025 Closings | 11,292 homes at an average price of $960,000 (record $10.8B in home sales revenue) |
| Brands / Divisions | Toll Brothers, Toll Brothers City Living, Toll Brothers Apartment Living, Toll Brothers Campus Living |
| Violation Tracker Total | $1,033,637 across 23 records (Good Jobs First Violation Tracker) |
| BBB Rating | A+ (Fort Washington, PA headquarters) |
Toll Brothers, Inc. is a Fortune 500 company founded in 1967 by Robert I. Toll and Bruce E. Toll in Pennsylvania. The company went public in 1986 on the NYSE and builds in over 60 markets across the United States, targeting first-time, move-up, active-adult, and second-home buyers. It operates its own architectural, engineering, mortgage, title, land development, smart home technology, landscape, and building components manufacturing subsidiaries. In fiscal year 2025, the company delivered a record 11,292 homes and generated $10.8 billion in home sales revenue.
Toll Brothers operates an affiliated lending arm, Toll Brothers Mortgage Company, which provides mortgage financing to its buyers. The company may offer incentives of $10,000 to $20,000 in closing cost credits or rate buy-down contributions for buyers who finance through its in-house lender. The integration of homebuilding and mortgage lending under one corporate umbrella is relevant to contract review because preferred-lender incentives can influence buyer decisions and may not always represent the most competitive financing terms available.
Documented Contract Patterns
The following patterns have been documented in Toll Brothers purchase agreements. Not every contract contains every clause, and language varies by state and community.
One-Sided Mandatory Binding Arbitration
Toll Brothers purchase agreements have contained arbitration clauses that require the buyer — but not Toll Brothers — to submit disputes to binding arbitration. The Fourth Circuit Court of Appeals ruled in Noohi v. Toll Bros., Inc. (2013) that this type of one-sided arbitration provision was unenforceable under Maryland law for lack of mutual consideration. Buyers lose their right to a jury trial, public proceedings, and in many cases the ability to appeal.
Deposit Forfeiture as Liquidated Damages
The contract may allow Toll Brothers to retain the buyer's deposit as liquidated damages if the buyer cancels. In at least one arbitration proceeding, an arbitrator found Toll Brothers' liquidated damages provision unenforceable and ordered the return of deposit funds to buyers who could not secure financing. Deposits on luxury homes can be substantial given the company's average sale price.
Restrictive Limited Warranty with Narrow Structural Coverage
Toll Brothers provides a one-year warranty on materials and workmanship, a two-year warranty on systems, and a ten-year warranty on structural elements. However, the structural warranty explicitly excludes exterior wall cladding (brick, stucco, siding) and only covers load-bearing failures that render the home unsafe. The warranty states it is the sole and exclusive remedy, and buyers waive the right to seek damages except as provided in the warranty.
Conflicting Arbitration Provisions Between Contract and Warranty
Some Toll Brothers contracts have contained separate arbitration clauses in both the sales agreement and the homebuyer warranty that directly contradicted each other. The warranty has explicitly stated that buyers have the right to pursue remedies other than conciliation and binding arbitration, creating ambiguity about which provision controls.
Class Action Waiver
Buyers may waive the right to join or participate in class action lawsuits against the builder. This forces each buyer to pursue claims individually, which can be cost-prohibitive for defects that affect entire communities.
Limitation of Liability / Exclusive Remedy Provision
The warranty and purchase agreement limit the buyer's remedies. The warranty states it constitutes the exclusive remedy for all claims against Toll Brothers, and buyers specifically waive the right to seek damages or assert claims except as provided in the warranty document.
Preferred Lender Incentive Tied to Toll Brothers Mortgage
Toll Brothers may offer closing cost credits or rate buy-downs of $10,000 to $20,000 that are only available if the buyer finances through Toll Brothers Mortgage Company. CFPB complaints indicate the company has required buyers to obtain pre-qualification through its in-house lender. Buyers should compare whether incentives offset potentially higher rates over the full loan term.
Material and Finish Substitution at Builder's Discretion
The builder reserves the right to substitute materials, fixtures, or appliances with alternatives deemed substantially equivalent at their sole discretion. The contract may also state that no changes can be made to options selected at contract, and additions are limited to those offered at the Design Studio and electrical meetings.
Independent Inspection Restrictions
The contract may limit when, how, or whether the buyer can hire an independent home inspector during construction or before closing. Without independent verification, buyers rely on the builder's own quality control to identify defects.
Punch List Limitation
The contract may restrict the timeframe or scope of the punch list, limiting the buyer's ability to document incomplete or defective work before closing. Items not identified within the specified window may be excluded from repair obligations.
Legal History
Selected cases and investigations involving Toll Brothers construction quality, contract enforcement, and lending practices.
Noohi v. Toll Bros., Inc.
In a putative class action, prospective buyers alleged Toll Brothers refused to return deposits when buyers could not obtain mortgage financing. The Fourth Circuit affirmed the district court's holding that Toll Brothers' arbitration provision was unenforceable because it required the buyer — but not the seller — to submit disputes to arbitration, lacking mutuality of consideration under Maryland law. Toll Brothers petitioned the U.S. Supreme Court for review; the petition was denied.
City of Hialeah Employees' Retirement System v. Toll Brothers, Inc.
A securities fraud class action in which investors alleged Toll Brothers made misleading statements about its business being immune from adverse housing market conditions. The case, filed in 2007, settled for $25 million. The class period covered investors who purchased shares between December 9, 2004, and November 8, 2005.
Toll Brothers Shareholder Derivative Litigation
The Delaware Chancery Court approved a $16.25 million settlement of claims that officers and directors of Toll Brothers breached their fiduciary duties by making false statements and trading on inside information during the housing downturn.
United States v. Toll Brothers, Inc. (Fair Housing Act)
The Department of Justice filed a federal Fair Housing Act lawsuit alleging Toll Brothers failed to design and construct apartment buildings with required accessibility features for persons with disabilities. The complaint cited 14 apartment complexes across Massachusetts, New York, New Jersey, Pennsylvania, D.C., and Virginia, alleging excessively high thresholds, missing grab bars, and insufficient wheelchair clearance. In 2025, the U.S. Attorney's Office filed proposed settlement agreements covering specific properties.
U.S. EPA Clean Water Act Settlement
Toll Brothers agreed to pay a $741,000 civil penalty to resolve alleged Clean Water Act violations at construction sites across 370 sites in 23 states. The federal complaint alleged more than 600 stormwater violations. The consent decree required implementation of a company-wide stormwater compliance program, including a national compliance manager and standardized site inspections.
Jupiter Country Club Construction Defect Litigation
Three lawsuits filed by the Jupiter Country Club HOA, two condominium associations, and FedNat Insurance alleged construction defects at the luxury golf community. An engineering report found defective balconies and stucco walls, cracked baseboards and drywall, improperly installed insulation, and the presence of radon gas. The HOA also alleged Toll Brothers did not properly manage the community or provide a required audit at turnover.
Kozikowski v. Toll Bros., Inc.
Buyers of a luxury home in Franklin, Massachusetts, brought claims for deceit and breach of express warranty after a town building inspection revealed eighteen building code violations. The First Circuit affirmed summary judgment for Toll Brothers on statute of limitations grounds, though the case documented allegations of persistent code violations spanning years.
Pennsylvania Construction Defect Appeals
The Pennsylvania Supreme Court denied a petition from Toll Brothers to hear a consolidated appeal in more than two dozen construction defect lawsuits. The rulings in favor of homeowners in the Pennsylvania Superior Court and the Philadelphia Court of Common Pleas were left standing, including a determination that secondary homeowners could pursue claims through the court system rather than mandatory arbitration.
What Buyers Should Know
- Scrutinize the arbitration clause for one-sided language. Toll Brothers contracts have historically included arbitration provisions that bind only the buyer, not the builder. A federal appellate court found this type of clause unenforceable. Ask whether the arbitration obligation applies equally to both parties.
- Understand the warranty's narrow structural coverage. The ten-year structural warranty only applies to load-bearing failures that render the home unsafe. Exterior cladding such as brick, stucco, and siding is excluded. The one-year workmanship warranty is the primary coverage for most defects.
- Compare Toll Brothers Mortgage against independent lenders. Incentives of $10,000 to $20,000 in closing cost credits may be offered for using the in-house lender. Calculate whether a potentially higher interest rate over a 30-year loan term costs more than the upfront incentive saves.
- Hire an independent home inspector before closing. Request access at key construction milestones: pre-drywall, pre-closing, and before the final walkthrough. Independent verification can identify issues the builder's own quality control may miss.
- Know your state's deposit forfeiture protections. On luxury homes with higher price points, deposits can be substantial. An arbitrator has previously found a Toll Brothers liquidated damages provision unenforceable and ordered deposits returned. Understand what triggers forfeiture and whether it is enforceable in your state.
- Document everything in writing. Verbal promises about features, upgrades, or timelines should be incorporated into the purchase agreement or a written addendum. The contract may state that no changes can be made to options after signing except through formal channels.
- Consider a professional contract review. Toll Brothers contracts are complex, multi-part documents with warranty provisions that may conflict with purchase agreement terms. An independent review can identify clauses that limit your remedies or waive rights.