Article Courtesy of The Orlando
By Mary Shanklin
Published February 17, 2016
KB Home reached a settlement with the Florida Attorney General's Office
involving construction defects, failure to disclosure problems to buyers and
denial of home-warranty claims for 1,688 houses across the state.
At the core of the state's three-year investigation were construction defects
that led to water intrusion, which leads to mold, wood rot and even structural
failure, according to the state. In some cases, the builder made the appropriate
fixes but in others it ignored problems and failed to inform buyers — all in
violation of the Florida Deceptive and Unfair Trade Practices Act.
As a result, one of Central Florida's leading builders must repair houses that
are up to 10 years old and qualify under the terms of the settlement. In
addition, the Los Angeles-based builder must provide the Attorney General's
office with $6.5 million, which will help repay homeowners who had to pay for
their own repairs. In addition, the company must invest $17 million improving
its building methods, training its work crews and using improved building
The builders' acts and practices constituted "unconscionable acts or unfair or
deceptive acts and trade practices," according to the complaint filed by the
attorney general in Tallahassee Circuit Court on Feb. 10. The settlement was
announced the next day.
"KB Home Florida has cooperated with the Attorney General's office to address
issues with residential stucco performance, which we consider to be an
industry-wide challenge in Florida," reads a statement from KB Home. "KB Home is
committed to providing quality homes and we stand behind our product."
It went on to on to reference the company's support of state efforts to improve
standards for stucco and it's new "industry-leading" warranty on the material
used to cover building exterior walls.
From even before the state launched its investigation, KB Home has spent what
now totals more than $71 million to reconstruct and repair damaged residences.
Specific violations cited in the complaint included:
Failing to disclose to certain purchasers that the homes
being constructed violated applicable building codes or original building
Denying certain consumers' warranty repair requests
because they purchased distress properties or failed to maintain their
Last month, KB Home reported lower-than-expected revenue for the fourth quarter,
with labor shortages and inclement weather slowing completions in some areas of
the country. In Central Florida, the company is constructing houses in Etowah,
Eustis; Silverleaf, Sanford; Orchard Park, Winter Garden; Arbor Chase, Orlando;
Mabel Bridge, Orlando; Compass Bay, Kissimmee; Enclave at Tapestry, Kissimmee;
and Shingle Creek Reserve, Kissimmee.
For Orlando-area homeowners seeking repairs: 1-800-305-2246 or
To apply for restitution: Florida-AG-KBSettlement.com or