This page is part of our public exclusion list — a transparency tool that shows which companies we screen out and why. It is not investment advice, and it is not an accusation. But it is subject to change as our understanding of the facts evolves.
KB Home has faced repeated legal actions and regulatory penalties related to defective construction and deceptive sales practices that have directly harmed homeowners in specific communities. In 2016, the company settled a Florida building defects claim for $23.5 million, with approximately $17 million allocated for repairs over five years for homeowners. This followed a 2005 case where KB Home paid a $2 million penalty for alleged violations of a Federal Trade Commission order concerning its warranty and service practices, including a $595,000 civil penalty.
The pattern extends to the integrity of home valuations. In 2009, a lawsuit alleged KB Home engaged in tactics to deliver predetermined, inflated appraisal values, including falsifying sale prices for comparable homes. Online homeowner forums continue to document individual cases where purchasers allege they did not receive proper disclosure notices about known defects. This history of construction defects, legal settlements over warranty issues, and allegations of appraisal manipulation demonstrates a systematic disregard for the financial stability and safety of the communities where it builds.
Research Sources
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Related Exclusions
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The Naughty List
A digest of changes to our exclusion list — new additions, removals, and the evidence behind them. We review the list continuously as new evidence surfaces.
Companies appear on our exclusion list based on our investment judgment — not because they've done anything illegal. This is a difference of values and opinion, not an accusation of wrongdoing. Exclusion does not constitute a recommendation against investing in any company, and absence from the list does not constitute a recommendation to invest.
This information is provided for educational and transparency purposes only and should not be relied upon as investment advice. Data is drawn from independent watchdogs, NGOs, government registries, and Ethical Capital's ongoing research — see Research Sources for the full list.
Ethical Capital LLC is a state-registered investment adviser in Utah (CRD #316032). Registration does not imply a certain level of skill or training.