Lennar Homes puts tainted drywall price tag at about $100,000 per home
More news on the tainted Chinese drywall front, which has spread from a smelly, health-suspect condition inside many new homes built in Florida to a multi-state investigation and federal debate over what to do with this mess.
The defective drywall, imported into the United States during a building materials shortage in 2004-2007, emits sulfur compounds that corrode air conditioning coils, and damages other metals on items inside the home, including jewelry, chrome, silverware and copper wiring inside electrical outlets.
In photo from April, Mary Ann Schultheis displays the black dust covering the copper tubes in the air conditioner in the second story of her home in Parkland, Fla. (AP photo: J. Pat Carter.)
Here are the latest highlights:
* Lennar Homes has identified about 400 homes with Chinese drywall that were delivered in Florida, mainly in its 2006 and 2007 fiscal years. The company's set aside just under $40 million to repair the homes, which puts the average cost per house at close to $100,000. That represents 2.1 percent of the homes delivered in Florida and 0.5 percent nationally by the Miami-based builder.
“Based on its efforts to date, the company has not identified defective Chinese drywall in homes delivered by the company outside of Florida,” Lennar says in a recent SEC filing. “The company is currently unable to reasonably estimate its future exposure relating to defective Chinese drywall. However, the company is continuing its investigation of homes it delivered during the relevant time period in order to determine whether there are additional homes, not yet inspected, with defective Chinese drywall and resulting damage. The outcome of the company’s inspections might require it to increase its warranty reserve in the future.”
Here's more detail at the Fort Myers News Press. And the Wall Street Journal notes the U.S. Consumer Product Safety Commission said in a letter to four U.S. senators last week that it has received more than 600 complaints related to the drywall issue from 21 states and the District of Columbia. Most of the reports are from Florida, Louisiana and Virginia.
* The Wall Street Journal also reports that U.S. and Chinese officials are cooperating in efforts to sample drywall and indoor air quality in affected homes to determine what may have gone wrong. The U.S. Environmental Protection Agency in May reported that preliminary sampling turned up sulfur in some Chinese drywall. The EPA tests also found strontium, a metal, at higher concentrations than in U.S.-made drywall. The Consumer Product Safety Commission, a federal agency that regulates many household products, has opened an investigation into the safety of imported drywall and posted information on its Web site.
* Senator Bill Nelson, D-Fla., says homeowners dealing with damages associated with Chinese drywall may qualify for special tax deductions through the Internal Revenue Service. These homeowners may be able to claim a casualty loss. Read more here and here.
-- Robert Trigaux, Times Business Columnist