8 On Your Side investigates fallout from KB Home construction defects

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BRADENTON, Fla. (WFLA) – KB Home, one of the nation’s largest home builders, is spending millions of dollars to settle a lawsuit with Florida’s attorney general over shoddy construction and building code violations. The troubles were uncovered in an 8 On Your Side investigation launched in 2012.

Three and half years later Willowbrook in Bradenton looks drastically better, with new paint and reconstructed exteriors. Many of the original homeowners have moved on, either selling their homes or renting them out. Others say they’re mostly happy with the repairs and thankful KB finally stepped up to help.

But some say they’re still dealing with leaks and uneven floors.

“I still have intrusion, flooring issues, mold,” homeowner Roxanne Miller said. “It’s really in worse condition that when I moved in.”

Homeowner Charles Casey is happy with the structural repairs that finally stopped water from seeping into his living room, but he’s left with uneven floors in his bedroom. Overall, though, he said he’s thankful his home is livable again.

“It had to be done,” Casey said. “I would have lost the total value of my investment in this property if this had not been resolved.”

The settlement requires KB Home to repair additional homes that are up to 10 years old and meet certain critera, pay restitution and change its business practices. KB Home, according to Attorney General Pam Bondi, failed to make certain disclosures to home buyers regarding the construction. The attorney general also said the company improperly denied warranty coverage to certain homeowners who were otherwise covered.

Beginning before and throughout the attorney general’s investigation, KB Home spent $71 million to repair affected homes, including 1,688 homes in need of repair from water intrusion issues arising from construction defects.

KB Home must also provide $6.5 million to the Attorney General’s Office to pay restitution for homeowners who have incurred out-of-pocket expenses as a result of construction defects and construction repair work, as well as to pay the costs of investigation and settlement administration. In addition, the settlement requires KB Home to undertake certain changes to its construction and business practices and spend approximately $17 million over the next five years to improve its construction techniques, train its subcontractors and use improved materials in its new construction.

Our 8 On Your Side investigation started with Willowbrook but found the same type of construction problems at more than a dozen KB complexes. The Attorney General’s Office cited many of those same developments.

Investigators found numerous Florida building codes had been violated. As part of the settlement, KB is required to have all new home construction reviewed by a third party inspector during and after construction.

KB Home will pay for the third party inspections. While it’s unclear at this time who will serve as the third party inspector, KB Home’s insurance company must approve.

Manatee County commissioners have asked the county building department to prepare a memo explaining what went wrong and what can be done to prevent this from happening again. The building department has maintained all along that its inspectors missed nothing.

The attorney general sent 8 On Your Side an email that said in part, “To be clear, our investigation revealed numerous violations of the Florida Building Code in the Willowbrook townhome development. However, many of those code violations became ascertainable only after deconstruction and the repair process, and, depending on the Manatee Building Department’s inspection protocol, it’s possible that not all of the violations may have been observable by inspectors.”

KB Home sent this statement to 8 On Your Side:

“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. We share the Attorney General’s interest in improving residential stucco standards in Florida, and we are proud to have implemented comprehensive stucco standards, which we are backing with a new, industry-leading warranty on stucco. KB Home is committed to providing quality homes and we stand behind our product.”

<< READ MORE 8 ON YOUR SIDE INVESTIGATIONS HERE >>

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