KB Home Phoenix, Inc. Complaint - KB's Refusal to fix a problem it created with my home

Review by road77 on 2007-01-03
MESA, ARIZONA -- During the Summer of 2006, I wrote a contract to purchase a new condominium from KB Home at Muirfield Village in Mesa, AZ. I went through the standard process of choosing a model, a specific lot location, and various options.

My unit was supposed to come with a small back yard area. Nothing fancy, just enough room to put a grill and some patio furniture.

In November, my unit was nearing completion and I noticed that my back yard is NOT AT ALL like the sales model. It is just a useless hill. KB sales reps explained that in some lots, the ground changes levels and there was nothing they could do. My small yard is totally worthless.

When I was choosing the lot, NO ONE from KB Home explained this is one of the few lots that would be a hill. It's not in my contract, and nobody told me verbally. According to AZ law, a builder/home seller must fully disclose any potential issues. KB Homes did NOT follow the law.

This issue will significantly harm my resale value. All things being equal, why would a buyer want my unit when they can get one a few doors down with a useable back yard? When I asked KB to address the problem, they refused.

I explained that I was willing to compromise. I would have been happy if they would have made a retaining wall, or if they took a small amount off my purchase price to compensate me for lower resale value. KB sales manager refused all of my ideas.

When I confronted KB with the fact that their sales representatives had not followed AZ law and had failed to disclose the issue, they gave me two options: 1) They would cancel my contract and refund my earnest money. 2) I could move to another lot and postpone my move-in date 7 to 9 months.

The problem with cancelling is that my current lease is up in February because I was expecting to close on the condo. If I cancel, I will have to scramble to find another place to live. Also, I really like the location, and don't want to cancel.

The problem with moving to another lot is that if interest rates increase by next fall, I will have lost thousands of dollars in interest. KB is unwilling to help buy down my interest rate if this situation occurs. In addition, my current lease is up in Feb. and I'd still have to find a place to live.

I don't feel that I have asked for anything unfair. KB Home created the problem. KB Home failed to disclose an issue according to AZ state law. But yet, they are treating the issue as if the problem was my fault. In the end, I will be hurt financially because of their mistake.

The solution KB Home is offering is the very LEAST they can do under the law. They are not willing to take responsibility for their own mistakes. They have proven that they have NO concern for their customers.

I teach business at a local community college, and will use this situation as an example of poor customer service, bad management and corporate greed. I never tell my students what to do, but maybe this example will make them think twice before buying a KB Home.

I do not recommend purchasing a KB Home--EVER!
Comments:10 Replies - Latest reply on 2007-01-03
Posted by Anonymous on 2007-01-03:
Sorry about your situation.
Posted by N. on 2007-01-03:
I had to read the whole post before I figured out that what you are calling a "hill" is really a downward slope. I don't understand how you picked out this lot and in the time it took to build the condo the ground sloped so much that you feel it affects resale value. Now I know this can happen in earthquake prone areas, but you don't mention that to be a factor. I am sympathetic to your issue, but how can the builder know that the lot grade was going to change?
Posted by Slimjim on 2007-01-03:
I think their offers are fair attempts for resolution. They won't reduce the price if they believe it is worth a particular figure, and they did allow you to walk from the contract with a full refund. Consider the options made available to you. Where you are renting now probably would let you stay the seven months, and with the way real estate has grounded to a halt, interest rates are more likely to be down later than up.
Posted by Anonymous on 2007-01-03:
If their contract was deceptive IAW with Arizona law then you could certainly sue them for any consequential damages you suffer as a result of their actions. I'm not sure what those damages are but it's certainly worth a free consultation with a lawyer.
Posted by spiderman2 on 2007-01-03:
I have to agree with Slim here. They offered to refund your money and they offered to let you pick another unit. I think that is fair.
Posted by Anonymous on 2007-01-03:
You bought the lot without even looking at it. How then did you know that it didn't slope before? Contact some appraisers to see what they think how hill will effect the price. Be prepared to pay for their service. With the current real estate market in a slump chances are you won't even recover the purchase price anyway when you sell it. I also agree that KB is being very generous to you.
Posted by *Brenda* on 2007-01-03:
I agree with slum also. They are letting you cancel or change your lot. How could you not know that there was going to be a slope there? Did you buy the lot sight unseen?
Posted by Anonymous on 2007-01-03:
I too must agree with Slim and the only thing I would add is you say its a condo so after you move in get to know your neighbor and see if sometime in the future you two can split the coast of putting a retaining wall in and bring the lot to the grade you want.
Posted by Slimjim on 2007-01-03:
Slum?!? Ok Brenda, I know you're going to confirm the u next to the i caused that :)
Posted by *Brenda* on 2007-01-03:
oops! I really didn't mean to say that LOL. Yes, they really should put the U somewhere else on the keyboard!

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