CHINESE DRYWALL

White Paper: Chinese Drywall
Overview. Due to a shortage of U.S. manufactured drywall between 2004 and 2007, many builders were
forced to buy drywall imported from China. The “Chinese drywall” has been linked to seeping sulfide gases that
can corrode electrical wiring and components of air-conditioning and other household appliances. Some
residents have been forced to move from their homes, and a few builders in Florida have begun gutting homes
and replacing the drywall.
The potential scope of the problem is huge. In Florida alone, an estimated 36,000 homes are believed to contain
Chinese-made drywall. It is estimated that between 60,000 and 100,000 homes nationwide may contain this
tainted drywall.
The Florida Department of Health (DOH) has received numerous complaints about drywall that has polluted
homes with a “rotten-egg” smell. The agency is currently identifying and assessing potential human health
hazards related to the phenomenon of rapid and recurring corrosion of metals inside homes. Florida Gov.
Charlie Crist has also sent requests to the U.S. Environmental Protection Agency (EPA) and Centers for Disease
Control and Prevention (CDC) asking for help with problems attributed to tainted Chinese drywall. Governor
Crist is specifically asking that the federal agencies help Florida develop chemical testing strategies for homes
that are experiencing severe copper corrosion.
Legislative initiatives. U.S. Sens. Bill Nelson (D-FL) and Mary Landrieu (D-LA) have filed two bills
relating to this issue. S. RES. 91 is an effort to press the Consumer Product Safety Commission (CPSC) for a
recall of Chinese-made drywall, based in part on findings by a Florida homebuilder and state officials who have
confirmed the presence of sulfide gases in homes built with the drywall. S. 739, the Drywall Safety Act, would
require the CPSC to work with federal testing labs and the EPA to determine the level of hazard posed by
certain chemicals and as yet unidentified organic compounds in the drywall. In addition, the legislation calls on
the commission to issue an interim ban on imports until it can create federal drywall safety standards so
consumers are protected in the future.
Nelson and Landrieu say they’re pressing the CPSC for a recall in the hope of jump-starting a process for
helping affected homeowners with the costs of repairs or replacement. Under their legislation, manufacturers
would be responsible for these costs.
U.S. Rep. Robert Wexler (D-FL) sent a letter to Governor Crist requesting the Governor declare a state of
emergency over the problem. A spokesperson for Governor Crist has stated that he is not clear what practical
effect a state of emergency declaration would have at this time.
Legal considerations. Several federal class action lawsuits have been filed, including claims against
U.S. homebuilder Lennar, Banner Supply Company, Chinese drywall manufacturer Knauf Plasterboard Tianjin
and the foreign company that distributed that company’s drywall within the United States, Rothchilt
International Ltd. Attorneys who filed one of the lawsuits say they estimate homes in 13 states are believed to
have defective Chinese drywall. They anticipate that when the Consumer Products Safety Commission
completes its investigation, this could be potentially one of the largest product liability cases related to home
construction in U.S. history.
The tools you need, the advice you count on. We’re your partner in Florida real estate.
Like any condition that could materially affect the value of a property, the presence of defective Chinese drywall
triggers the need for an affirmative disclosure of its presence. No one expects real estate professionals to
conduct home inspections or recognize signs that a home may contain this material. However, if a homeowner is
aware of the presence of this material, they as well as the real estate professional must disclose it. It is important
to understand that not all Chinese drywall is defective and not all defective drywall is from China. The extent of
the problem is still being researched.
To assist Realtors working with buyers and sellers of property potentially affected by Chinese drywall, the FAR
Law and Policy Department has developed a “Chinese Drywall Addendum for Purchase” contract addendum
and modified the Seller’s Real Property Disclosure. These forms are available in the Forms Basic and
TransactionDesk™ areas of floridarealtors.org. These forms are designed to alert potential buyers of the
possible presence of this material and provide awareness on the availability of inspections or other options to
evaluate any concerns. Real estate professionals working with buyers may choose to provide a copy of the
addendum to buyers during their property search to educate them on this issue. PLEASE NOTE –There is no
requirement under Florida law to use this addendum. It is provided to assist the real estate professional
when working with buyers and sellers.
Resources
Florida Department of Health: http://www.doh.state.fl.us/environment/community/indoor-air/drywall.html
Florida Gov. Charlie Crist’s letter to U.S. Environmental Protection Agency:
http://www.flgov.com/release/10642
U.S. Sen. Bill Nelson: http://billnelson.senate.gov/news/details.cfm?id=310757&
This publication is provided as a service to members of the Florida Association of REALTORS® and is intended for educational
use only. Opinions or suggestions in this publication do not necessarily represent the official policies or positions of the Florida
Association of REALTORS®. The Florida Association of REALTORS® does not accept responsibility for any misinterpretation or
misapplication by the reader of the information contained in this article. The publishing of this material does not constitute the
practice of law nor does it attempt to provide legal advice concerning any specific factual situation. FOR ADVICE ON SPECIFIC
LEGAL PROBLEMS CONSULT LEGAL COUNSEL.