Kolter Homes Lawsuit: The $22.5M San Matera Settlement

The largest lawsuit involving Kolter Homes is the San Matera construction defects case, in which the 676-unit San Matera at the Gardens condominium association in Palm Beach Gardens, Florida, sued Kolter Signature Homes, its developer affiliate The Grande at Palm Beach Gardens Inc., and more than a dozen subcontractors over water intrusion and structural damage. After six years of litigation in Palm Beach County Circuit Court, the parties settled on September 29, 2016 for $22.5 million, with no admission of liability by Kolter.¹

What the Homeowners Alleged

The association filed suit around 2010. Its complaint said the condominiums were “disintegrating” because water was seeping through walls, roofs, windows, and sliding glass doors across the 30-building complex.¹ Residents said the structural damage had been hidden behind stucco walls and at the roofline when they bought their units.

The condo board president said “every major system in the condominium is broken,” pointing to exterior walls, roofs, windows, doors, and many balconies that would need replacement.² By 2015, the association had already spent about $1.5 million on emergency repairs. Damages sought over the life of the case ranged from $36 million to as high as $42 million.³

The Corporate-Shield Theory the Jury Never Heard

The association also pursued a broader theory about how Kolter organized the project. It alleged that Kolter had set up The Grande at Palm Beach Gardens Inc. as a single-purpose entity so that profits could flow upstream to a parent company while the parent stayed shielded from construction liability. Kolter’s attorney, Richard Chaves, called that “pure speculation.” Circuit Judge Jack Cox barred the association from putting the theory before the jury.³

How the $22.5 Million Settlement Was Structured

The deal was announced in open court before Judge Cox during the third day of jury selection. Insurance carriers for Kolter-related companies agreed to pay $11.8 million. Insurers for the subcontractors and the project architect covered the remaining $10.7 million.¹ It was described at the time as one of the largest construction defect settlements in Palm Beach County history.⁴

Kolter admitted no liability. Chaves called the resolution “amicable and agreed.”³ The association was represented by David Haber of Haber Slade and Joy Spillis Lundeen of Bilzin Sumberg as co-lead counsel.⁴ At the time of settlement, funds were expected within three months. The association estimated that repairs would take two to three years.

What Happened After the Money Arrived

The settlement did not produce a clean fix. Florida Structural Group, a Fort Myers-based contractor, started remedial work in 2017 and walked off the job in April 2019 after 18 months, citing a payment dispute with the association.⁵ By July of that year, parts of the 100-acre complex were still sealed off with caution tape, construction debris sat in parking lots, and all 30 buildings still needed work.⁶

Nine construction lien claims were later filed against the property over nonpayment for materials and labor tied to the repairs. As of 2021, residents said they were still living with mold, leaky roofs, and swollen hardwood floors. Some called the situation a “nightmare” and said the management company and homeowner’s board had provided little transparency on the status or timeline of the work.⁷

Other Legal Matters Involving Kolter

Kolter Signature Homes was also a party to a contract dispute that reached Florida’s Fourth District Court of Appeal in 2010. Homebuyers there sought to rescind their purchase contracts under the federal Interstate Land Sales Act, arguing that Kolter had failed to provide a required property report. Kolter argued the contracts were exempt because it was obligated to build within two years. The appellate court sided with the buyers, holding that a clause imposing unreasonable restrictions on the buyers’ right to seek specific performance disqualified the contract from the exemption. The buyers were allowed to rescind and recover their deposits.⁸

Kolter Homes has also drawn consumer complaints outside of court. Between 2024 and 2026, 19 complaints were filed through the Better Business Bureau, mostly relating to service or repair issues, including subflooring problems, plumbing leaks, faulty air conditioning components, and difficulty getting warranty work completed. The company is not BBB accredited. In its responses, Kolter has generally said that it follows standard industry construction tolerances and the terms of its purchase agreements and limited warranties.⁹

How Florida Law Has Changed Since San Matera

A similar case filed today would run under a different set of rules. Florida law requires homeowner associations to follow a mandatory pre-suit notice process under Chapter 558 of the Florida Statutes before filing a construction defect lawsuit. The claimant has to describe the alleged defects in reasonable detail, give the contractor a chance to inspect the property, and allow time for the contractor to offer a repair, a settlement, or a denial of liability. For associations with more than 20 units, the full pre-suit timeline can stretch to 120 days or more.¹⁰

In 2023, Florida enacted Senate Bill 360, which shortened the statute of repose for construction defect claims from 10 years to seven years, effective July 1, 2024 for all projects. The statute of repose is an absolute deadline after which no claim can be filed regardless of when a defect is discovered, and the seven-year clock now begins on the earliest of several defined trigger dates, such as the issuance of a certificate of occupancy or certificate of completion. The law also introduced a “material violation” standard for claims based on building code violations, limiting recovery to defects that result in or could result in physical harm or significant damage to a building’s performance.¹⁰ The four-year statute of limitations, which runs from when a defect is discovered or should have been discovered, is unchanged.

One practical effect of the new law is that each building within a multi-building development is now treated as its own improvement when calculating these deadlines. For a community like San Matera, with 30 separate buildings, that can mean different limitation periods for different structures, which would complicate any future community-wide action. In 2023, Kolter Homes hired Sean Smith, a former partner at an AmLaw 200 firm, as its Senior Vice President of Legal Affairs and General Counsel to oversee risk mitigation, claims management, and compliance.¹¹

1
Palm Beach Post. Gardens Condo Settles With Kolter
2
The Real Deal. Five Years On Kolter Signature Homes Lawsuit Continues
3
Daily Business Review (via Stearns Weaver). Kolter Settlement
4
Bilzin Sumberg. $22.5 Million Condominium Community Construction Defect Settlement
5
The Real Deal. PB Gardens Condo Community Seeks Yet Another Contractor to Repair Its Buildings
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Palm Beach Post. Construction Woes Continue to Plague Palm Beach Gardens Condo Complex
7
Levelset. San Matera the Gardens Contractors Claim Millions
8
FindLaw. Kolter Signature Homes Inc. v. Shenton
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BBB. Kolter Homes Complaints
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Florida Legislature. Florida Statutes Section 95.11
11
The Kolter Group. Sean Smith Bio