Not too long ago, I blogged about the infamous "Chinese Drywall" and boy did my phone start ringing. Now, I initially started researching and sending out information in efforts of keeping my clients informed and "in the loop" regarding the topic.
What really got me concerned about the subject was that a majority of RE agents and brokers didn't want to discuss it. In fact, when I reached out for brokers in which I have had a long, quality relationship with....it was like I wanted to talk to them about some sort of CIA secret or something. Conversations actually got to the point of a select few telling me that they didn't want to open a can of worms.
This was absolutely astonishing to me, considering that I assumed that I was not the only one that tunes in to CNN in the evening. The idea that little ol' me could pop the lid off of a national concern and "set the market on fire" was erroneous at best.
Well, I didn't take no for an answer and went ahead and produced a 16 page Power Point on the subject, emailed it over for their review and to date have lectured to over 1200 RE agents within Broward County. In fact, since the eye opening information contained in my presentation, caused brokers to re-evaluate and ammend their Seller's Disclosure and Listing Agreements.
My company does offer Contaminated Drywall Inspections, but that was not the motivating factor in formulating the presentation. The simple fact was that no one was sitting down and weeding out the speculative comments, alleged "facts" vs. what is actually known about the problem and how to deal with it.
If you read the Sun Sentinal or The Post, you'll get about 70% relavent information and 30% alledged lawyer talk. But the reality to the problem is that minimal has been accomplished to address this issue.
The State of Florida, for the most part, has sat on their hands and the Federal Agencies have done less. This drywall has been the hot topic since last December and there has been no definitive statements made on either level. Between you and me, that is just ridiculous.
Why?...you ask. I am not exactly sure why Congress rejected $2 million for inspections and testing but could it be that a third manufacturer alleged in the class action law suit is actually owned by the Chinese government. And if the Federal Consumer Protection Agency were to declare a recall, would be obligated to seize the assets of the Chinese government pending the outcome of the pending lawsuits.
Instead, the State of Florida went on countless TV and radio shows stating that there is no confirmed data available and they are "seriously looking in to the matter." They also went on to say that there is no way to inspect or test for the product. Well that just isn't true. But on the other hand, if they were to endorse a method of testing or establish protocol, then if the manner proved to be ineffective, they could be liable. Liability in an already litigious situation is not good. By the end of the day, all the state had to offer homeowners is that you're on your own.
So what this has created is a shark feed among the civil lawyers in multiple states. Within our state, there have been countless "neighborhood meetings" hosted by multi-partner law firms, banging on the podium telling homeowners how they have been taken advantage of by money hungry, cost cutting builders that have built the family home with toxic products in efforts of shoring up their bottom lines in a declining market. Sounds plausible...but not the truth, by a long shot.
So, lets get back to the facts.
First, the US has been importing drywall from China for years. In fact, Knauf which is named in multiple lawsuits as the manufacturer of the "Chinese Drywall," is the largest manufacturer of drywall and insulation in the world. But the sulfur contaminated product is the first of it's kind. The gypsum that had been used was not properly scrubbed to remove the sulfur. The proper manufacturing techniques were not observed. Whether the gypsum was mined or a bi-prduct of fly ash is not the relevant concern because our reliable domestic manufacturers use the same methods. This was not some kind of conspiracy to intentionally contaminate our homes.
Second, the amount of product imported from China was because of a simple thing called "supply and demand." We witnessed a combination of accelerated growth in construction combined with a series of natural disasters that exceeded companies like US Gypsum's ability to keep the supply chain full. So, with procurement agents for brokers, construction companies, non-profits (New Orleans) and others, turned to importing more construction materials. Solely on the immediate damand.
Testing methods have been established contrary to the state's statements on the radio talk shows. In fact, physical sample testing only takes 5-10 days. This is controlled environment testing that produces accurate results in efforts of identifying the presence of the eroding gases.
Folks, this is not rocket science. It's very basic. Sulfur, when exposed to certain amounts of heat and humidity omit gases that are naturally corrosive to common metals. These metals are found in the electrical system, HVAC system, appliances, electronics.....etc. The gases cause the erosion and eventual failure of these components.
Once the product has been identified to have used in the construction of the dwelling, the ONLY method of mitigation or the only way to fix this problem is to remove all of the drywall.....PERIOD. There is NO way to "seal" it up, cover it up, run air scrubbers...etc. If anyone is telling you otherwise, they're trying to make a buck or just ignorant. And, once the product has been removed, there is no residual effect. Meaning if you remove the cause of the gas....the gas will naturally go away.
We are still in the process of identifying how many builders used the product within the new construction market. But what is just as important is how many homes was the product used in that were partial replacement purposes. Remember the photos of homes with a water line 3 feet off of the slab from flood waters? Well, sub-contractors and homeowners used some of this product too.
Yes, excess materials that were not bought by the large construction companies were sold to idependent builder supply houses that are open to the public. In fact, last month in Dade County, there were supply houses still stacking this stuff on their sales floor and a discounted price. Unbelievable.....right. Meanwhile, the state can only make recommendations to retailers not to sell the product instead of demanding that the product be taken out of the market. Why?...because an official recall has not been issued.
Getting back to my original purpose for writing about this topic, it is to keep our industry informed about these issues and how it impacts our market. I understand that transactions today are harder, even without the stench of rotten eggs and deteriorating electrical systems. And, if you're not reading articles like this and keeping in touch with issues that adversely effect our market, then you are working behind the 8 ball. If you haven't incorporated contaminated drywall in to your Listing Agreements and Seller's Disclosure then you are setting yourself up for litigation.
Keep informed.....keep ahead of the game.....keep pushing forward!
David B. Manley
Gold Coast Inspections