and Video Courtesy of Channel 10 Action News
September 17, 2012
BRADENTON, Fla. -- A
federal lawsuit filed by a former KB Home human resources director
indicates the home-builder knew condos at the troubled Willowbrook
Townhomes had structural defects - and employees were ordered not to
disclose them to home-buyers.
10 News has been covering the problems
Willowbrook residents have been having with their crumbling condos. The KB
Home construction was done anywhere from two to five years ago.
But the whistleblower lawsuit,
Ruben O'Neill v. KB Home, alleged the homebuilder knew about - but
failed to disclose - structural defects in their Willowbrook homes
before selling them to home-buyers in June 2007. O'Neill
claims he was fired after he objected to the company's "keep
quiet" policy on the defects.
"The type of defect that was
alleged would result in mass loss of property if not mass loss of
life," said Natasha Dalton, the attorney who represented the
The suit alleged "KB Home had
knowledge of substantial and potentially life-threatening structural
defects which affected approximately 50-60 three-story townhomes." And
"the Division President again told the Construction Manager not to
disclose the defect" to homeowners prior to closing.
The lawsuit was quickly settled in 2008
with a confidentiality stipulation.
A second federal whistleblower lawsuit was
filed in 2009 by the construction manager, who says he was demoted because
he raised the same concern back in June 2007. Matthew Brown v. KB
Home backed up some of the allegations made in O'Neill's suit.
|Brown's suit was also
settled rather quickly and also included a confidentiality
State law (FSS 475.278)
requires all home-sellers to disclose "all known
facts that materially affect the value of residential real
Home's Regional President, George Glance, who was accused
in O'Neill's lawsuit of giving the orders in June 2007 to
withhold the information from home-buyers, told 10 News
Thursday that a construction mistake was identified and
homeowners were notified in August 2007.
stopped construction, we made the corrections," Glance said. "(Repairs
to column construction) were all done under the supervision of the
A KB Home spokesperson added "all
closings were immediately put on hold, homeowners received notification
and corrections were immediately made under an engineer's advice, and to
the homeowners satisfaction."
But the letter to homeowners provided to 10
News was dated August 2007, several weeks - or months - after dozens of
homeowners closed on their new homes. According to the federal
lawsuit, KB employees wanted to let prospective home buyers know about the
problems as soon as June 2007.
"I never would have closed if I had
known," one Willowbrook homeowner told 10 News Thursday after
learning of the news.
KB Home has promised to fix roof and
balconies of condo owners who are having problems, but many say the damage
has gone way past repair. They add that the construction's damaged
reputation has essentially rendered their property worthless.
10 News asked Glance if KB Home would
compensate the homeowners for their lost investment.
"We're very enthusiastic about the
progress we've made with the homeowner's association," Glance said
without directly answering the question. "We're going to begin
repairs as soon as we've got the proper permitting in place."