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Venture

Robert Trigaux

Chinese drywall complaints reach federal ears

23

February

Wake up and good morning. Chinese drywall. It started as an unidentified local complaint in a few southwest Florida homes. It spread to other housing communities. It got the attention of builders, health inspectors, state regulators and legislators, and then law firms.

Now it's got the attention of the U.S. Consumer Product Safety Commission. "It" is the rising flood of complaints over Chinese-made drywall believed to be emitting sulfur-like odors and producing corrosions of air-conditioner systems, electrical wiring and plumbing in dozens of Florida homes -- and possibly elsewhere. The Wall Street Journal reported Saturday (subscription required) that the new federal Consumer Product Safety Commission probe comes as drywall concerns continue to spread across Florida and possibly other states. The drywall was imported from China because of a shortage during the housing boom in 2006.

The Journal quotes CPSC spokesman Joe Martyak saying the commission's focus on whether the sulfur-based gases emitted from the drywall are corroding household wiring and posing a potential safety hazard. If a safety hazard is found, the CPSC could order a halt in further sales of certain drywall products. The CPSC has no safety standards for drywall, a construction material commonly used to build interior walls, and the agency is not aware of other federal standards for the product.

Florida homeowners have submitted almost 100 complaints to the Florida Department of Health about problems relating to their drywall, prompting Sen. Bill Nelson, D-Fla., to request the CPSC and Environmental Protection Agency to investigate. Nelson called for the agencies to determine the number of homeowners potentially affected by the problem, and to decide whether a recall needs to be initiated. Nelson also directed the CPSC to promulgate drywall safety standards to avoid a repeat of the issue in the future.

Three days ago, home builder Taylor Morrison, a unit of the London-based builder, Taylor Wimpey PLC, became the latest big builder to acknowledge a drywall problem in some of its houses. The company said it had identified at least eight Florida homes containing defective Chinese drywall and is relocating many of the home owners while it replaces the defective construction material, according to the Journal.

Another builder, Miami-based Lennar, has suffered the most media attention so far over drywall. One Manatee County community of Lennar homes hit hardest by the Chinese drywall phenomenon -- Montauk Point Crossing in Heritage Harbour -- has been the recent scene of a half-dozen houses being gutted by Lennar Corp., according to the Sarasota Herald-Tribune.

Garyaubuchoncape_coral A new bill filed by state Rep. Gary Aubuchon of Cape Coral tweaks and tightens the parameters under which a homeowner can bring a legal claim against a builder for construction defects. Aubuchon (in photo) is president of Aubuchon Homes, one of the builders who has acknowledged that the defective drywall was in a handful of his homes. According to the Fort Myers News-Press, Aubuchon Homes has relocated at least one family in Fort Myers so the defective drywall can be torn out and replaced. And -- talk about bad luck -- the tainted drywall has been found in Florida Lt. Gov. Jeff Kottkamp’s $1.4 million North Fort Myers residence, another home built by Aubuchon.

Meanwhile, a national consumer advocacy group in Washington, D.C., called America's Watchdog is claiming that the scope is much broader. The group, partnering with high-powered attorneys across the country, says that its own investigation has found defective Chinese drywall in Florida, Arizona, Colorado, Georgia, Louisiana, Maryland, Nevada, New Jersey, New Mexico, North and South Carolina, Virginia and Texas.

Although a number of drywall manufacturers may be implicated, the most commonly-cited is Knauf Plasterboard Tianjin Co. Ltd., a China-based producer. The company regularly prints its name on the back of its drywall, making it the most easily identifiable potential culprit -- and the easiest target of lawsuits.

This Venture blog has been tracking the rise of the drywall problem for months and has posted on Lennar's difficulties here and here, as well as the apparent narrowing of the source of the drywall in question to Chinese imports here and here. We're still in the first few innings of this game.

-- Robert Trigaux, Times Business Columnist

[Last modified: Tuesday, June 1, 2010 12:24pm]

    

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