Toll Brothers lawsuits span four main fronts: a pending U.S. Department of Justice case alleging Fair Housing Act violations at 14 apartment buildings, decades of construction defect claims from homeowners (many pushed into arbitration), securities and shareholder suits tied to the mid-2000s housing crisis, and environmental enforcement actions led by a $741,000 Clean Water Act settlement. The largest active matter is the 2024 DOJ suit; the most common complaints from individual buyers involve water intrusion, stucco failure, and structural defects.
The DOJ Fair Housing Act Case
In June 2024, the Justice Department sued Toll Brothers and Toll Brothers Realty Trust in the Southern District of New York, alleging the company designed and built apartment complexes that were not accessible to people with physical disabilities.1U.S. Department of Justice. United States v. Toll Brothers, Inc. The complaint names 14 buildings in Massachusetts, New York, New Jersey, Pennsylvania, Washington, D.C., and Virginia, including The Sutton in Manhattan, 49 North 8th Street in Brooklyn, Parc at Princeton Junction in New Jersey, Parc Plymouth Meeting in Pennsylvania, and 10 Provost Street in Jersey City.2Multifamily Dive. Fair Housing Lawsuit: Justice Department, Toll Brothers
According to the DOJ, the buildings had entrance thresholds that were too high, common-area bathrooms without grab bars, and apartment bathrooms without enough floor space for wheelchair users.3Bisnow. Toll Brothers Department of Justice Accessibility Lawsuit The government has asked the court to order retrofits, adoption of compliance policies, and compensation for people harmed by the inaccessible conditions.2Multifamily Dive. Fair Housing Lawsuit: Justice Department, Toll Brothers
Two co-defendants involved in the design and construction have settled. Lendlease Construction agreed to a consent decree with a $10,000 civil penalty in June 2024, and GreenbergFarrow Architecture agreed to a similar decree with a $30,000 civil penalty in July 2024.4U.S. Department of Justice. Recent Accomplishments, Housing and Civil Enforcement Section Individual property-level settlements for Parc at Princeton Junction, The Morgan in Jersey City, The Kendrick in Needham, and Emerson at Edge on the Hudson were filed or approved in early 2025. A second amended complaint was filed on January 8, 2025, and no final settlement or trial date has been set for Toll Brothers itself.1U.S. Department of Justice. United States v. Toll Brothers, Inc.
In September 2025, Toll Brothers sold its Toll Brothers Apartment Living platform to Kennedy Wilson for roughly $347 million and exited multifamily development. The company did not cite the DOJ case as a reason for the sale.5Kennedy Wilson. Kennedy Wilson and Toll Brothers Announce Agreement
Construction Defect Claims by Homeowners
Homeowners have sued Toll Brothers over construction quality for more than 20 years. Recurring allegations include water intrusion, stucco failure, rot, mold, sagging floors, and structural deterioration. Because Toll Brothers’ purchase contracts typically contain mandatory arbitration clauses, most of these disputes never reach open court.
The 37-Homeowner Pennsylvania Case
In one of the largest recent disputes, 37 homeowners across 19 families who bought Toll Brothers homes in southeastern Pennsylvania between 2003 and 2005 alleged systemic defects including stucco failure, water infiltration, rot, mold, and structural deterioration. Their claims moved to American Arbitration Association proceedings in 2019. In February 2024, a newly appointed arbitrator canceled the scheduled hearing and dismissed all 37 claims without oral argument or testimony, citing AAA Construction Rule 34, which permits dispositive motions without a hearing.6Horn Williamson. 37 Homeowners With Defective Construction Claims Ask PA Supreme Court to Invalidate Arbitration Rule That Denied Them a Hearing
The homeowners argued the dismissal violated the Pennsylvania Uniform Arbitration Act, which requires a hearing and the chance to present evidence. The Philadelphia Court of Common Pleas and the Superior Court both upheld the dismissal, and on March 31, 2026, the Pennsylvania Supreme Court denied the homeowners’ petition for review, leaving the Superior Court’s ruling intact.7CaseMine. Denial of Allowance of Appeal Leaves Superior Court Order Intact (Toll Brothers Consolidated Petitions)
When Arbitration Clauses Have Failed
Courts have not always enforced Toll Brothers’ arbitration clauses. In Noohi v. Toll Bros. Inc., the Fourth Circuit ruled in 2013 that the arbitration provision in Toll Brothers’ standard Agreement of Sale was unenforceable under Maryland law. The court found the clause lacked mutual consideration: it forced buyers to arbitrate and waive court proceedings while imposing no reciprocal obligation on Toll Brothers. The Fourth Circuit rejected Toll Brothers’ argument that the Federal Arbitration Act preempted the state rule.8FindLaw. Noohi v. Toll Bros Inc.
In Wang v. Hockessin Chase L.P., the Delaware Superior Court denied Toll Brothers’ motion to compel arbitration in 2018. A warranty issued after the purchase contract contained a contradictory arbitration clause that the court held superseded the original, and the court called Toll Brothers’ argument to favor the contract over the warranty “disingenuous.”9Cooch and Taylor. Cooch and Taylor Wins Major Victory, Homeowners Against Toll Brothers
Homeowners can also win in arbitration. In 2024, a homeowner at The Reserve at Franklin Lakes in New Jersey secured a six-figure award after a four-day arbitration in which the arbitrator attributed pervasive flooring problems and structural flaws to improper construction.10Becker. Becker Secures Six-Figure Arbitration Victory Against Toll Brothers for Construction Defects
The Statute of Repose in Pennsylvania
Pennsylvania homeowners face a hard deadline. In Johnson v. Toll Brothers, Inc., the Superior Court of Pennsylvania affirmed summary judgment for the company in September 2023, holding that owners who filed suit more than 12 years after the certificate of occupancy was issued were barred by the state’s statute of repose. The plaintiffs had alleged that improperly installed door frames, brick façades, and windows caused continuous water damage, but the court ruled the statute’s exception for injuries first arising in the final years of the repose period does not apply to ongoing harm that began earlier. The court also held that a local certificate of completion established the construction was “lawful,” foreclosing later arguments based on code violations.11Pennsylvania Courts. Johnson v. Toll Brothers, Inc., 2023 PA Super 169
The 2001 Boston Globe Investigation
The pattern of defect complaints is not new. In 2001, the Boston Globe Spotlight team published a multi-part investigation focused on the Hopkinton Highlands subdivision in Massachusetts, where inspections identified building code, energy efficiency, and safety violations. Homeowners across several states reported leaky roofs, sagging floors, buckling kitchen islands, and sinking counters. The reporting documented a pattern in which the company allegedly ignored complaints, provided inadequate repairs, blamed homeowners, or used aggressive legal tactics. In one instance the Globe described, a company attorney referenced a non-existent psychological evaluation of a homeowner to discredit a damage claim; in another, the company sued a Canton, Massachusetts couple after they handed out leaflets about defects in their home.12Boston Globe. Toll Brothers Spotlight Investigation, Day 2
Securities and Shareholder Suits
Toll Brothers faced significant investor litigation during the mid-2000s housing downturn. In The City of Hialeah Employees’ Retirement System v. Toll Brothers, Inc., filed in the Eastern District of Pennsylvania, shareholders alleged the company made misleading statements about its outlook and falsely claimed its luxury home model was immune to macroeconomic pressures such as rising interest rates. The case settled for $25 million.13Berger Montague. The City of Hialeah Employees’ Retirement System v. Toll Brothers, Inc.
A parallel Delaware derivative action, Pfeiffer v. Toll, was filed in 2008. The complaint alleged that eight of eleven directors sold significant amounts of stock between December 2004 and September 2005 while holding material nonpublic information that contradicted the company’s public statements. In March 2010, Vice Chancellor Laster of the Delaware Court of Chancery denied the defendants’ motion to dismiss, finding demand on the board was excused because a majority of directors faced a substantial threat of personal liability in the related federal securities case.14Morris James. The Court of Chancery Reaffirms the Vitality of Claims Asserting Insider Trading
Environmental and Regulatory Penalties
The largest regulatory penalty against Toll Brothers was a $741,000 Clean Water Act settlement announced in June 2012. The EPA alleged more than 600 violations for failing to install and maintain stormwater pollution controls at construction sites across 23 states, with most violations in Virginia and Maryland.15U.S. Department of Justice. Homebuilder Toll Brothers Inc. to Pay $741,000 Clean Water Act Penalty A 2009 inspection at the Regency at Prospect site in Connecticut documented sediment discharge into a stream feeding Beaver Pond Brook.16Hartford Courant. Toll Brothers Pays $741,000 to Settle National EPA Lawsuit The settlement covered 370 sites and required a national stormwater compliance program with dedicated managers, site-specific pollution prevention plans, and regular EPA reporting.
All told, Toll Brothers has accumulated roughly $1.05 million in regulatory penalties across 24 recorded enforcement actions since 2000, covering environmental violations, OSHA workplace safety citations, and employment-related penalties including a 2004 NLRB action and a 2022 wage and hour violation.17Good Jobs First. Toll Brothers Violation Tracker