KB Home, the largest homebuilder in San Antonio, has been the target of protests from angry homeowners. Now, the company is the subject of a News 4 WOAI TroubleShooters investigation.
Our question: what is KB Home telling the buyers of some of its homes with past problems?
The answer might make you wonder how much you know about your own house.
The TroubleShooters met two men, from opposite sides of San Antonio, who have a similar problem. Both say they were misled by KB Home.
Chris Diehl and Jesse Font both bought homes from KB that are "buy-back" homes. That means the previous owners of their homes reported problems and the builder, KB, actually bought the homes back from them.
"If I'd have known it was a buy-back, there's no way we would've purchased the house," Diehl told the TroubleShooters.
"Nobody's going to buy my house for what I paid for it," Jesse Font told us.
Font claims all of the windows in his home leak.
Diehl showed us a crack that runs from his garage, through his house, to the back of his kitchen. He was aware of the crack when he bought the house but says it's gotten worse.
"If it's bad enough to buy back, there's something wrong," Diehl said.
The problem is: when both Chris and Jesse bought their homes, months after KB bought them back from the previous owners, they say nobody told them the full story.
"If I would've actually known it was a buy back, at that time, that would've really influenced our decision," Diehl says.
Diehl's realtor says he didn't know either.
"If I was purchasing the property, and I thought it was a buy-back, I would've been more concerned about purchasing that buy-back," said realtor Ruben Singleterry. "Or I would've come in and been more negotiable on the offer."
How could they not know the history of these homes?
The reason is: KB resold the properties using a different name, BPP Holdings, a KB affiliate, as the seller listed on their contracts.
"That's all that was said," Singleterry told us. "It never said that Kaufman and Broad, KB, had any kind of tie with this particular holding company."
Diehl says it was his neighbors who finally told him about the history of his KB home.
The TroubleShooters have identified at least 14 homes in San Antonio bought and sold by BPP Holdings over the past three years.
In some cases, the new homeowners say they knew the full story when they bought the homes.
"I thought they were forthcoming," says homeowner Charles Tholen. "They laid it out. Maybe we got lucky."
But in nearly half the cases, the owners tell the TroubleShooters they either didn't know KB was the seller, or didn't know their homes were buy-backs.
But even if the buyers should've connected the dots themselves, there's something else we found. In some of the homes bought back and resold, KB didn't disclose the problems the prior owners were complaining about.
For example, three years ago, News 4 visited the home of Tammy Cox, who claimed her backyard was flooding after KB laid the foundation for the house next to her's.
"I'd like to see Kaufman and Broad come in and buy-back the houses with problems," Cox told News 4 at the time.
Four months later, KB did buy Cox's home back. But when the property was resold to the Woods family, the state required seller's disclosure listing all known defects and repairs was marked 'unknown.'
Where the company could've disclosed 'previous flooding of the property' it wrote 'unknown,' instead.
That same year, city engineers visited another home, in the Northampton neighborhood, and reported "significant exterior and interior cracking" and "separation between the ceiling and interior walls."
Remember Jesse Font? It's his house now.
When he bought his home, the seller's disclosure Font received had no inspection report explaining any problems, or what caused them, and no list of any repairs that had been made in the home.
"The seller should disclose anything they know about the property to they buyer, so the buyer is aware of the condition of the property that they're buying," says Mike Reyna, with the San Antonio Board of Realtors.
Reyna stresses that he's no attorney, but says "as a licensed real estate agent, no. I mean, it is not legal from our standpoint, our ethics, our licenses."
So, by now, you're probably wondering - how can KB write 'unknown' when it bought the homes back from dissatisfied customers in the first place? Why does the company use a different name to re-sell homes?
We wanted answers to those questions, directly from KB Home.
Since last month, KB Home has promised the TroubleShooters an on-camera interview to explain what its doing. But last week they pulled the plug, deciding at the last minute to respond with a written statement.
The written statement reads:
"In no way does KB, or its affiliate BPP Holdings, hide the fact that these homes have been repurchased or that they have had issues."
In the statement KB also claims "BPP Holdings is publicly disclosed as an affiliate of KB."
We were finally able to find that BPP is publicly disclosed as a KB affiliate company…on the company's annual filings with the Securities and Exchange Commission.
KB's statement also reads:
"In nearly all of our resale transactions, there is clear, written communication that KB Home is the seller."
In the case of the Woods' home, the written communication is a signature, which reads "for KB Home." The Woods' also signed an addendum that referenced Kaufman and Broad at the bottom.
In Jesse Font's case, he feels either KB, BPP, or the listing realtor knew, or at least should've known, and disclosed that there were problems with the windows on his home.
The company provided no proof that it disclosed past problems or that Font's home was being resold by the builder.
But KB claims Jesse Font knew about the home, because he mentioned KB in an email to his realtor...9 months after he bought the home.
As for Chris Diehl, two inspection reports outlining a crack in his foundation were addressed to Kaufman and Broad.
Because of that, the company says the Diehl's should've concluded that KB was the seller, even though the contract lists BPP Holdings as the seller.
"You would've thought, somewhere, someone would've put that this was a buy-back," said Diehl's realtor, Ruben Singleterry. "Or mentioned something about the holding company being tied to KB."
KB's response to that (as the statement reads):
"KB Home takes steps to make sure that all appropriate disclosures are made to resale buyers and such buyers are fully informed in their decision making."
Chris Diehl and Jesse Font don't believe they were fully informed and now they want out. They'd like to be added to the list of families who have had their homes bought back by KB.
"We like the neighborhood. We like our neighbors. But a house is a huge investment and if they'd buy it back, that's what we'd ultimately like," Diehl told us.
KB Home says this needs to be put in perspective. The company has built more than 25,000 homes in San Antonio over the past decade, but has bought back "no more than a few dozen."
Tomorrow on News 4 WOAI at 10pm, as our investigation continues, we'll show something that could affect nearly all KB Home homeowners.
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