Chinese Drywall and what it means to home buyers

So called "Chinese drywall" issues have been reported in the media all across the country with concerns about health and residential systems such as air conditioning and electrical wiring among others. Drywall is a material that comes in sheets of various sizes and thicknesses that is attached to the studs and ceiling joists to become the interior wall surface which is later plastered over and/or painted.

During the 2003 - 2007 building boom a shortage of drywall occurred in the U.S. which was compounded by major hurricanes (Charlie and Katrina) further increasing demand. This led producers and distributors to seek supply offshore - China. It has been reported that drywall produced in China may have high sulfur content. Sulfur, when combined with water will form an acidic substance and can cause corrosion to metals and possibly health issues also.

It follows that those geographic areas with very high new construction volume during the time period could see a higher incidence of Chinese drywall present such as Florida, Nevada, and Mississippi but not limited to those state. The Consumer Product Safety Commission has received complaints from 19 different states.

Chinese drywall issues, when discovered, are widely reported in the press. Certain large local nationwide builders/developers who build many developments and homes have a higher chance of discovering the use of this material. This is no guarantee that it's limited to these developments, builders/developers, nor is it proof that all homes in these developments were built with Chinese drywall. I am aware of affected homes where these builders/developers taking steps to rectify the problem once discovered.

Many homebuyers that I work with are from out of town, out of state, and out of the U.S. and may not even be aware of the potential issue. However once they hear of it questions, uncertainty, and fear arise. Some even ask for a guarantee that the property has not been built with Chinese drywall.

I work with home inspectors all the time. For homes built between 2003 and 2007 what they will tell you is that 1) they routinely look for "signs" of Chinese drywall (usually the tarnishing of air conditioning coils and other copper such as tubing and wire in the circuit breaker panel, reading the labels on the back of the drywall if accessible, and smell, and 2) there is no way to tell for sure unless you cut out samples (wall and ceiling since often different thickness material is used on each surface) and send the samples to a laboratory for testing. If the test results are negative and since you are only testing a sample, there is still no guarantee that there is no Chinese drywall somewhere in the home. 

When you look to purchase a short-sale or foreclosure property, the property is sold "as-is". The burden is exclusively on the buyer to determine the condition of the property, at the buyer's expense, and to decide to make the purchase or not.  

If the property is not short-sale or foreclosure it is unlikely that the seller will have intimate knowledge to state categorically that there is no Chinese drywall. The seller will usually state "don't know". Then it's up to the buyer, once again, to perform your due diligence and make your decision. However, if the seller or the listing agent is aware that the property contains Chinese drywall then this fact must be disclosed as is required by Florida statutes and likely similar laws in other states. 

That said, according to the multiple listing service (MLS), there have been 1,518 residential properties sold since 1/1/2009 in the area where the property was built in 2003 and later. The actual number is much higher as homes sold by developers during the time period are not in the MLS like my home, built in 2005-2006. 

This is a long way around to say it is highly unlikely that you will get a guarantee from anyone and certainly not with a short-sale or foreclosure. Employing a reputable and qualified inspector is important and performing lab testing if you and/or the inspector think it's warranted.

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