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Florida AG's office reaches $23.5M building defects settlement

While the process of purchasing a home is an exciting time for anyone, it can be especially thrilling when the prospective homeowner gets to see their future domicile being built from the ground up.

Indeed, those who choose to build a new home are able to derive some much-needed peace of mind about the future, reasonably believing that their new residence will be free from any sort of major structural issues for the foreseeable future.

As evidenced by a recent episode here in Florida, however, owners of newly built homes can sometimes be deprived of this peace of mind and thrust into a wholly nightmarish scenario.

For the last three years, the Florida Attorney General's Office has been conducting an investigation into one of the largest homebuilding companies in the nation, California-based KB Home, relating to construction defects.

Specifically, the investigation was focused on whether there was a widespread water intrusion defect, something that can result in the formation of mold, the development of wood rot and the onset of structural failure.

The AG's office, which filed a formal complaint in Tallahassee Circuit Court earlier this month, ultimately accused KB Home of violating the Florida Deceptive and Unfair Trade Practices Act.

Some of the specific violations made in the complaint included:

  • Failing to inform home buyers that the homes under construction were not being built in accordance with original building plans and in violation of building codes
  • Rejecting home-warranty claims made by 1,688 homeowners across the state

Interestingly enough, the day after the complaint was filed both the AG's office and KB Home announced that a $23.5 million settlement had been reached.

The terms of the settlement dictate that KB Home, which admitted no wrongdoing, will make the necessary repairs to homes that are up to 10 years old, and pay the AG's office $6.5 million to cover restitution costs for homeowners and the costs of the three-year investigation. As for the remaining $17 million, KB Home will invest it into training for work crews, purchase of enhanced building materials and improvement of building methods.    

It's important for those who have question or concerns relating to construction defects to give serious consideration to speaking with an experienced legal professional to learn more about their rights and their options under state law.

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