Overview
Toll Brothers operates in the Maryland suburbs of Washington, D.C., including Montgomery County, Howard County, and Anne Arundel County, as well as the Baltimore metropolitan area. The company builds luxury single-family homes, townhomes, and condominiums in these high-cost markets.
Maryland is a pivotal state for Toll Brothers contract analysis due to the Fourth Circuit's ruling in Noohi v. Toll Bros., Inc. (2013), which found Toll Brothers' one-sided arbitration provision unenforceable under Maryland law. Maryland's Consumer Protection Act and its statutory framework for new home warranties create additional layers of buyer protection.
How Maryland Law Affects Your Contract
The following analysis examines how Toll Brothers's documented contract patterns interact with Maryland consumer protection law.
One-Sided Arbitration After Noohi v. Toll Bros.
The Fourth Circuit ruled in Noohi v. Toll Bros., Inc. (2013) that Toll Brothers' arbitration provision was unenforceable under Maryland law because it required only the buyer to submit disputes to arbitration, lacking mutual consideration. This directly addresses pattern ARB-001. Toll Brothers petitioned the U.S. Supreme Court for review; the petition was denied. This precedent is binding in Maryland and provides strong grounds for challenging similar one-sided arbitration provisions.
Deposit Forfeiture and the Noohi Litigation
The Noohi case arose from prospective buyers who alleged Toll Brothers refused to return deposits when buyers could not obtain mortgage financing. An arbitrator in related proceedings found Toll Brothers' liquidated damages provision unenforceable and ordered return of deposits (DEP-001). Maryland's Commercial Law Article governs deposit handling and may impose additional requirements.
Maryland Consumer Protection Act
The Maryland Consumer Protection Act (Md. Code, Com. Law Section 13-101 et seq.) prohibits unfair, abusive, or deceptive trade practices. Toll Brothers' limitation of liability provision (DAM-001) cannot override these statutory protections. The Act provides for private right of action and potential recovery of attorneys' fees.
Maryland New Home Warranty Protections
Maryland's New Home Warranty Law and common law implied warranties provide protections for new home buyers that supplement the builder's express warranty (WAR-001). Maryland courts have recognized implied warranties of habitability in new construction that cannot be easily disclaimed through contract language.
Maryland Legal History
Selected cases and investigations involving Toll Brothers in Maryland.
Noohi v. Toll Bros., Inc.
Prospective buyers alleged Toll Brothers refused to return deposits when they could not obtain mortgage financing. The Fourth Circuit affirmed that Toll Brothers' arbitration provision was unenforceable under Maryland law because it lacked mutuality — requiring only the buyer to arbitrate. The U.S. Supreme Court denied Toll Brothers' petition for certiorari.
Relevant Maryland Laws
Maryland law provides strong implied warranty protections for new construction. Courts have held that this warranty cannot be waived by contract in consumer transactions.
Requires residential builders to register with the state and participate in the Home Builder Guaranty Fund, which provides a limited recovery fund for homebuyers.
Prohibits unfair or deceptive trade practices and provides consumers with a private right of action for damages.
Maryland Key Facts
- 1Maryland's implied warranty of habitability cannot be waived by contract.
- 2Builders in Maryland must register with the Home Builder Registration Unit and contribute to the Guaranty Fund.
- 3Mandatory arbitration clauses are generally enforceable in Maryland, subject to unconscionability challenges.
- 4Maryland has a statute of limitations of 3 years for contract claims and a 20-year statute of repose for improvements to real property.
- 5Maryland does not have a statutory right-to-repair or pre-litigation notice requirement for construction defects.
- 6The Consumer Protection Act provides remedies for deceptive practices in new home sales.
What Maryland Buyers Should Know
- Know the Noohi precedent on one-sided arbitration. The Fourth Circuit has ruled that Toll Brothers' arbitration clause lacking mutuality is unenforceable under Maryland law. If your contract contains a one-sided arbitration provision (ARB-001), this precedent may apply directly to your situation.
- Understand your deposit recovery rights. The Noohi litigation specifically addressed Toll Brothers' refusal to return deposits to buyers who could not secure financing. An arbitrator found the deposit forfeiture provision (DEP-001) unenforceable. Understand the specific triggers for deposit forfeiture in your contract.
- Leverage Maryland Consumer Protection Act protections. Maryland's CPA provides remedies for unfair or deceptive trade practices that cannot be waived by contract. If the builder engages in misleading conduct during the sales process, these statutory protections apply regardless of limitation of liability clauses (DAM-001).
- Compare Toll Brothers Mortgage in the D.C. metro lending market. The Washington, D.C. metropolitan area has one of the most competitive mortgage markets in the country. Compare Toll Brothers Mortgage incentives (LEN-001) against rates from multiple independent lenders before committing.
- Request independent inspections at key milestones. Maryland's climate involves both humidity and freeze-thaw cycles that can affect construction quality. Hire an inspector for pre-drywall and pre-closing reviews to document conditions before taking ownership.