KB Home to pay millions for construction defects

Posted at 3:52 PM, Feb 11, 2016
and last updated 2016-02-11 16:17:51-05

Home builder KB Home and its Florida subsidiaries have reached a multi-million dollar settlement with the Florida Attorney General's Office to cover cost arising from construction defects, officials said.

The Florida Attorney General's Office made the announcement Thursday, ending a three-year investigation of KB Home for violations of the Florida Deceptive and Unfair Trade Practices Act.

KB Home allegedly failed to make certain disclosures to home buyers about the construction of some of its homes and improperly denied warranty coverage to certain homeowners who were otherwise covered, according to a statement released by the Florida Attorney General's Office.

KB Home has already spent about $71 million to repair affected houses, including 1,688 homes in need of repair from water intrusion issues. 

The final judgment requires KB Home to repair additional houses that are up to 10 years older and meet certain criteria.

KB Home also is required to provide $6.5 million to the Florida Attorney General's Office to pay restitution, including out-of-pocket expenses for homeowners who have incurred expenses as a result of construction defects and construction repair work. It also will pay the costs of the investigation and settlement administration.

As part of the settlement, KB Home is required to undertake certain changes to its construction and business practices and spend about $17 million over the next five years to improve its construction techniques, train its subcontractors and use improved materials in its new construction. 

A third-party inspector must review KB Home's new construction in Florida.