Chinese drywall crisis spreading across U.S.

Chinese drywall crisis spreading across U.S.

In summer 2008, construction consultant Michael Foreman started getting calls from homeowners across South Florida. “Something stinks,” they’d tell him. In recently built homes large and small, upscale and modest, he noticed three similarities: a rotten egg stench, residents with upper respiratory symptoms and copper air-conditioning coils that were prematurely corroded. “I went, ‘Whoa,’” he says. “All these houses were different. What was the common element?”

Around the same time, construction litigation attorney Allison Grant started noticing similar irregularities in her Port St. Lucie, Fla., condominium. “I was trying to figure out what the heck was wrong,” she says.

Foreman’s eight-month investigation uncovered a common thread linking all the tainted houses: drywall imported from China in homes built between 2004 and 2007, when a construction boom in the U.S. thinned domestic supplies and created an opening for imported supplies, particularly in South Florida and the Gulf Coast states of Louisiana and Mississippi after Hurricane Katrina. The cause of all the nefarious issues lurks silently in the houses’ walls, in boards that emit a noxious chemical believed to be sulfur dioxide, made under unknown conditions in Chinese mines.

Fallout spreads

Since the link was discovered, homeowners in at least nine other states plus the District of Columbia have reported similar problems, according to the U.S. Consumer Product Safety Commission. A shipping analysis done by a Sarasota, Fla., newspaper found that enough Chinese drywall was imported to build 60,000 U.S. homes, although consumer advocacy group America’s Watchdog says the number could be double or triple that due to imprecise shipping records, according to M. Thomas Martin, president of the Washington, D.C. group.

Foreman has personally inspected more than 200 homes in South Florida and says he found more than 60 percent of them to be tainted. In every case, the culprit drywall boards are 1/2-inch thick and 4-by-12 feet, he says. However, in every affected house there’s a mixture of drywall: some tainted, some not. Ruling out one section of drywall doesn’t rule out problems elsewhere.

Lawsuits follow

Grant started the website to educate homeowners about the latest findings related to the drywall and its health and environmental effects. The site gets about 3,000 visits a day, she says. She’s also representing affected homeowners throughout the state, trying to reach settlements with builders to repair the damage — which typically costs $50,000 to $75,000 for a 2,000-square-foot house and requires the homeowners to relocate for months — before resorting to a lawsuit.

So far, she says most builders have been willing to make the necessary repairs, although homeowner’s insurance companies have been less willing to cover the costs. In late March, she filed what’s believed to be the first Chinese drywall-related lawsuit against an insurance company, American International Group Inc., on behalf of homeowners Keith Baker and Linda Leri of Fort Myers, Fla. The claim was denied by the insurer, according to the court filing, because damages related to drywall fall under a “contaminant” exclusion in the coverage.

Grant says she plans more lawsuits against insurance companies who denied claims and expects other homeowners to file suit, as well, although she’s not aware of any others filed so far in Florida. She expects courts to look favorably upon the homeowners’ claims. “The homeowners’ policies are ambiguous at best and I think when there’s an ambiguity they’re usually interpreted in favor of the homeowner,” she says.

Elsewhere, affected homeowners have filed at least 10 lawsuits seeking damages from builders and suppliers, with a hearing scheduled May 27 at the federal Judicial Panel on Multidistrict Litigation in Louisville, Ky., to consider consolidating them all into one class-action suit.

Feds, states respond

he CPSC has launched an extensive investigation, with staff going through houses and interviewing homeowners in affected areas in South Florida, spokesman Scott Wolfson says. Politicians at the local, state and federal levels have called for action ranging from a recall of all Chinese drywall to beefed-up federal spending to deal with the fallout.

The Louisiana Department of Health and Hospitals opened a hotline in March and has received calls from about 550 homeowners believed to be affected by tainted Chinese drywall, says department spokesman Rene Milligan. Most of the homes are clustered in and around Orleans Parish in New Orleans, an area particularly hard hit by Hurricane Katrina, he says. Health investigators are following up with affected homeowners and trying to determine what public health risks, if any, the drywall poses.

“It’s something we’re definitely concerned about,” he says, while cautioning that “we wouldn’t call this a widespread public health threat at this point” due to the relatively small pool of people affected.

In limbo

But many report frustration with all the unknowns and the languid pace of the investigations. Unknown still are the exact health risks associated with the drywall, according to the Florida Department of Health and CPSC. Unknown still is exactly what chemical or blend of chemicals in the drywall causes the problems. Unknown still is how exactly to test a house for tainted drywall. And unknown still is what exactly happened during the manufacturing process in China.

“We’re urging federal agencies to act as swiftly as they would in the event of an emergency because this is an emergency,” says Ashley Mushnick, press secretary for Democratic U.S. Rep. Robert Wexler, who represents some of the hardest-hit areas of South Florida. “The Congressman feels that the time frame the agencies are working under right now is not acceptable.” 

Patience, vigilance urged

Wolfson of the CPSC defends the agency’s investigation, which he says could stretch for months. “Let there be no doubt among consumers that we’re pouring a significant amount of resources into this problem,” he says. “But we do need to know the cause first and once we know the cause, we can make better decisions.”

The state of limbo has led to confusion and frustration among homeowners and service providers as well. “We’ve been getting different answers from different people” about the causes and consequences of the tainted drywall, says J.D. Easthope, a highly rated contractor who’s owned a drywall business in southeast Florida for 30 years. He’s heard reports of hucksters offering sham testing and drywall replacement.

Wolfson of the CPSC urges patience as the commission conducts its investigation. People suffering health problems should see a doctor and report it to their state health board and the CPSC. If a builder offers to remove drywall from an affected home, homeowners should first consult an attorney and not sign a release of liability, Grant says. For people considering buying a house in affected areas, they should demand an inspection by an inspector specifically knowledgeable about the Chinese drywall issue, she says.

Home inspector Gary Ehrsam of Port St. Lucie, Fla. started Chinese Drywall Screening LLC, which so far isn’t rated on Angie’s List, last December to deal with an onslaught of new demand. He has done more than 200 inspections and has learned to check every appliance and furnishing in the house with copper in it, he says. Sometimes, the main sign of tainted drywall — blackened, corroded air-conditioner coils — isn’t present due either to the coils being outside or in the garage or the homeowners having replaced them. Microwaves often hold more reliable clues, he says, since they’re always inside and the copper wiring in them often deteriorates before copper in other appliances, such as refrigerators or TVs.

“The effects of Chinese drywall on different homes are very peculiar, with a lot of inconsistencies,” he says. “You have to see a variety of cases to get good at detecting it.” 

Meanwhile, Easthope urges homeowners to be extremely skeptical of anyone offering testing or replacement who, like the drywall, doesn’t pass the smell test.

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