KB Home: Building Boom or House of Cards?

John Rehill

BRADENTON -- KB Home is one of the nation's largest homebuilders and poised to have an exceptional year in profits. According to Bloomberg, KB Home stock is up 127 percent and third quarter revenues are up by a fetching 16 percent, or $424.5 million. Good news, right? Not so fast. The balconies are falling off, the floors are falling through and mammoth mold is making those who want-out of their homes, afraid of their house. In the cries for lemon laws, buyouts and lawsuits, now there is a game changer: criminal negligence. And there may be plenty to go around.


















A deck at one of the KB Homes
Spot where a worker's foot went through the sub-floor

KB Home net income for the three month period ending this August rose to $3.3 million, compared to a loss of $9.6 million the same period the year before. The turn around was partially from benefits from tax and insurance related gains along with greater home sales. These are the biggest gains since 2008, and although most of their sales have been in California, the Los Angeles-based company that targets first time buyers has had moderate to robust sales in Florida as well.



Back in 2008, when the complaints about KB Home at the Willowbrook subdivision (just west of Lakewood Ranch in unicorporated Manatee County) were already coming in, mold permeated the walls, eroding electrical boxes, roofs leaked and cracks in the walls just kept coming. Then the balconies started separating from the exterior walls, and some fell to the ground. By that point, Willowbrook homeowners had already felt enough was enough, and the more than 60 residents who filed complaints united, only to find that even in numbers they could still be ignored.



KB Home avoided taking responsibility for the crumbling structures and any help that was offered by them was too little too late. Homeowners repeatedly complained to Manatee County's Building and Development Services, and then twice they took their grievances before the County Commission, but to no avail.



New information to this ongoing fiasco may offer resolve to the victims who were told: 'mitigation was their only option'. Those homeowners, many who have chosen to move out -- abandoning their dream home and sacrificing their credit rating -- and were told they were bound to an "arbitration" clause in their contract, now have hope.



Turns out, they are not alone. In Clearwater's Waterford neighborhood, there too KB Home owners are suffering from the same predicament. They not only share the same problems, but also share the same concerns to how this all could have happened or could have been prevented.



One of the first Willowbrook homeowners to complain was Roxanne Miller. She was forced to abandon her home and move away, "I used to wonder why the inspector would pull up, get out, sign some papers and never go in or even talk to somebody." Miller's comments on the county inspector was echoed by fellow homeowners Armondo Delgado and Dan Koehler, who said, "They were doing drive-by inspections."



Koehler says his baby is sick all of the time. He is one of those whose balcony fell. Koehler claimed he had 100 percent humidity inside of his house, and that he and others have leaky roofs. One of the most common questions was how any of their homes could have ever passed inspection?



That's one of the Questions WTSP Channel 10 reporter Noah Pransky asked Manatee County's Building and Development Director, John Barnott, who answered, "There was no way to know." Barnott was reticent with Pransky, as he was with me when I asked him if "inspections were part of the problem?" That was the day the Willowbrook group pleaded with the commission for help for a second time. He seldom acknowledges me and didn't then, but answered "no" as he walked away. In the WTSP interview, Barnott admitted he has never seen any of the damage, nor watched the videos.



Another interesting aspect to this five-year long blame game is the KB Home contract clause requiring "arbitration" may not be valid after all, if KB is guilty of false representation. Another approach could be that the damage is a product liability issue. That might open the door to legal proceedings against KB Homes and Manatee County inspectors.



It was a single individual who performed most of the inspections for Manatee County at Willowbrook, and he is no longer employed with the county. Surely questions will be asked about any of the circumstances that could have led to so many dangerous structures and so many disgruntled homeowners.



It appears Williobrook homeowners may not be left without recourse indefinitely under the current system. Maybe a lemon law for the biggest purchase most people make in their lifetime isn't such a bad idea.



Editor's note: a previous version of this article incorrectly stated that Willowbrook was in Lakewood Ranch. It is actually located in unincorporated Manatee County, just beyond the southwest border of Lakewood Ranch.