How Tariffs Are Disrupting Build-to-Rent Timelines And What Investors Can Do About It

If you're an investor or developer in Florida's booming Build-to-Rent market, you may have noticed your timelines slipping — and tariffs could be the hidden culprit. While many focus on permitting delays or labor shortages, another key factor causing significant disruption is the rising cost and unpredictability of imported materials due to tariffs.

In this blog post, we'll break down how tariffs are affecting Build-to-Rent developments, what that means for your bottom line, and most importantly, what legal strategies you can use to protect your project.

What Are Tariffs, and Why Do They Matter in Real Estate Development?

Tariffs are taxes placed on imported goods. In real estate, that typically includes building materials like steel, aluminum, lumber, fixtures, and even appliances. When tariffs go up, so do your costs — and often, your project timeline takes a hit too.

This can be especially frustrating for Build-to-Rent projects, where speed and cost-efficiency are key to keeping investors happy and tenants moving in.

How Do Tariffs Affect Build-to-Rent Construction Schedules?

Delays in material shipments, increased construction costs, and contract disputes are three of the biggest ripple effects of tariffs in BTR developments.

1. Delays in Material Deliveries

Builders often rely on imported goods to keep construction on schedule. When tariffs are imposed or adjusted, it can lead to unexpected delays at ports, backorders, or the need to source alternative materials — all of which slow down your timeline.

2. Rising Construction Costs

Tariffs increase the price of essential materials. This can push your project over budget, especially if you signed fixed-price contracts before the tariff hikes. Investors are then faced with a tough decision: delay the project, renegotiate contracts, or eat the extra cost.

3. Legal Disputes Over Cost Overruns

Tariff-related delays and cost increases often lead to finger-pointing between developers, contractors, and suppliers. Many contracts aren't drafted with global trade policy in mind, leaving you vulnerable to litigation or strained business relationships.

Why Are Build-to-Rent Projects Particularly Vulnerable?

The Build-to-Rent model thrives on efficiency and scale. These are typically multi-unit, standardized developments designed for quick build-outs and fast leasing. That means any delay — especially a supply chain disruption — has a magnified impact on your ROI.

In Florida, where demand for rental homes continues to surge, even a few weeks of delay can mean hundreds of thousands in missed revenue or lender penalties.

Can Tariffs Be Used as a Legal Defense in Contract Disputes?

This is where things get tricky — and where legal guidance is crucial.

If your construction or supplier contract doesn't have a force majeure clause that covers tariff changes, your legal options may be limited. However, that doesn't mean you're out of luck. There may be room to:

• Renegotiate pricing terms under doctrines like commercial impracticability
• Reinterpret ambiguous contract language
• Seek mediation or arbitration before a dispute escalates into a lawsuit

What Can Investors and Developers Do to Protect Themselves?

Tariffs aren't going away anytime soon. Whether you're planning a new BTR project or already deep into one, here are a few things you can do:

1. Review Your Contracts for Tariff Risk

If your contracts don't account for sudden price swings due to trade policy, you may want to renegotiate or amend them now. A skilled real estate attorney can identify weak points in your agreements before they become liabilities.

2. Incorporate Material Cost Contingencies

Future contracts should include language that addresses the allocation of risk if material costs rise sharply. Consider clauses that allow for equitable adjustments or shared cost burdens in response to tariff hikes.

3. Keep a Paper Trail

Documenting every delay, price change, and supplier communication helps protect your legal rights later. If a dispute arises, the side with better records is usually in a stronger position.

4. Explore Local Alternatives

Sourcing materials domestically can mitigate some tariff risks. It may not always be possible, but even partial substitution can stabilize costs and speed up delivery.