Will we ever be done with Chinese drywall?
Aside from Chinese food, is there anything that the Chinese make that we have not had trouble with? True, they are buying our national debt, so we’re sort of in bed with them, but does that mean we have to accept inferior products also. Based on a new federal ruling coming out of the Consumer Product Safety Commission, we do not.
In early April the Consumer Product Safety Commission issued new guidelines indicating that thousands of United States homes tainted with Chinese drywall should be completely gutted. Their guidelines state that not only should the Chinese drywall be removed, but also electrical components, sprinklers and gas lines should be replaced to eliminate any safety problems.
As we know, Chinese drywall was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes required rebuilding, thousands of homes in Florida as well as Virginia, Mississippi, Alabama and Louisiana have been affected.
In Manatee County new homes built in Lakewood Ranch and other eastern Manatee County locations primarily have been involved. The drywall has been linked to corrosion of wiring, air conditioning units, computers and even jewelry and doorknobs, in addition to the possibility of health-related problems.
Now that we know of the negative effects of the Chinese drywall, both in replacement cost and property value, the question becomes who should pay for remediation? Lennar is one of the few new home developers to voluntarily take responsibility and remove the tainted drywall from their properties. The homeowner insurance industry is fighting it out in the courts, and thousands of lawsuits have been filed against home builders in addition to Chinese companies that manufactured the product.
Most of the time homeowners are replacing the drywall and any other damaged home systems themselves and then looking for reimbursement. This can be a very expensive undertaking, since it is estimated that the cost of removing and replacing just the drywall for a 2,000 square foot home is about $100,000.
U.S. Sen. Bill Nelson has been proactive with this problem and is looking to the Chinese government to make some concessions. He is pressing the White House to make the Chinese drywall a priority in talks with Chinese officials, and a spokesman for the Consumer Product Safety Commission stated that it wants Chinese companies to do the right thing for American consumers.
The United State Department of Housing and Urban Development (HUD) has instructed local and state governments that there may be some funds in their programs to assist homeowners. Federal Housing Administration (FHA) mortgage lenders also could grant some temporary relief to homeowners.
A federal judge in Virginia ruled in a case against a Chinese drywall manufacturer to pay $2.6 million in repairs in addition to an award for loss of enjoyment of the home. This case is viewed more as a bellwether or test case and very little if any of the financial award is expected to be collected. The case is also significant since the federal judge also ordered that all the drywall in the homes involved be removed not just the Chinese drywall, since it would be difficult to determine the difference.
Unfortunately, being bed partners with the Chinese isn’t giving us much leverage in the drywall scandal. At least we do have government agencies in place that are charged with testing foreign imports giving us the option of not purchasing inferior ones. Think of the poor Chinese, I wonder who’s looking out for them?
