Home Builder Settles Suit for $595,000 : * Construction: Kaufman & Broad admitted no wrongdoing in an FTC case alleging shoddy practices in Riverside County.
Kaufman & Broad Home Corp., the largest builder of single-family homes in California, said Thursday that it has agreed to pay nearly $600,000 in fines to settle a Federal Trade Commission case centering on alleged shoddy building practices in Riverside County.
By agreeing to pay $595,000 to settle the case, Kaufman & Broad admitted no wrongdoing.
“We’re pleased we can finally put to bed an issue that we have been dealing with for a few years,” a company spokeswoman said.
The FTC had accused Kaufman & Broad of violating a 1979 consent decree over a five-year period, by allegedly failing to pay for repairs or correct “a major construction defect” in dozens of Riverside County tract homes built in the early 1980s.
The company also entered the 1979 consent decree with the FTC without admitting wrongdoing. That consent decree rose out of cases in Illinois, where the company was accused by federal officials of shoddy and deceptive building practices, including false advertising and poor quality construction on homes.
The Riverside case centered on alleged faulty construction of homes with second stories that sagged and cracked.
In a bitter lawsuit filed in 1985, 34 homeowners in Riverside County accused the company of trying to cover up a basic design flaw in the houses, which were priced to attract first-time home buyers. Kaufman & Broad denied the accusation and accused the homeowners and their attorneys of trying to use repairable defects in the homes to enrich themselves through a lawsuit.
The suit was settled last year for $5.5 million, including attorney’s fees. Homeowners received nearly $100,000 each.
On learning of the settlement with the FTC, attorney Christopher P. Ruiz, who represented the homeowners, commented:
“The only thing I can say is that the wheels of justice are somewhat slow, but it’s nice to see that they are finally turning. . . . And hopefully sometime in the future the government will take a more active role in monitoring home builders who target first-time home buyers and see that the products they sell meet building standards and codes.”
Kaufman & Broad, however, downplayed the significance of the settlement in a prepared statement that maintained: “The FTC’s allegations involve specific and isolated incidents . . . all of which have since been resolved by Kaufman & Broad.
“Kaufman & Broad remains committed to the total satisfaction of every customer,” the statement said.
