Congress Introduces Chinese Drywall Legislation

Posted on July 12, 2009 by David Lindner

Congress has recently introduced a number of measures in response to the problems caused by defective drywall imported from China. Both the House and Senate introduced identical bills titled the Drywall Safety Act of 2009 (H.R. 1977; S. 739), which, if enacted, would require the U.S. Consumer Product Safety Counsel to study at least ten samples of drywall imported from China between 2004 and 2007 taken from homes in Florida, Louisiana, Mississippi, Texas and Virginia. The study is to include an analysis of (1) the chemical and organic composition of the drywall, (2) the effect of the drywall compounds on metal wiring, air conditioning and heating units, and other metal fixtures, and (3) any health or environmental impact of the compounds. The Act further directs the CPSC to initiate a proceeding to determine whether a consumer product safety standard regulating the composition of materials used in drywall is necessary to protect the health and safety of residential homeowners and imposes a temporary ban on the importation of drywall exceeding five percent organic compounds.

Additionally, the House passed a measure to amend the Mortgage Reform and Anti-Predatory Lending Act, H.R. 1728, to direct the Secretary of Housing and Urban Development to study the effect on residential mortgage foreclosures of (1) the presence of defective Chinese drywall in such residences and (2) the availability of property insurance for residences where such drywall is present.  HUD is required to report its findings, conclusions and recommendations to Congress. This bill has been referred to committee.

 

The focus of the legislation under consideration is the evaluation of the drywall problem and its impact upon residential owners, and addressing future drywall imports, as opposed to providing any relief to those whose homes contain the defective Chinese drywall. If the proposed studies show that Chinese drywall issues have caused environmental, health, foreclosure or insurance issues for residential property owners, there may be another round of legislation to address those issues. Check back here for updates as we track the progress of these measures through Congress.       

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Lawsuits Begin over Defective Chinese Drywall

Posted on May 29, 2009 by David Lindner

Imagine purchasing a brand new home, only to discover it has a persistent rotten egg smell. On top of that, your new appliances mysteriously stop working and the home’s copper wiring turns black. It sounds like a nightmare, but for those in Florida and other southern states whose homes contain defective Chinese drywall, it is reality.

Although it now seems a distant memory, there was a time not long ago when new homes were being constructed across the country at a record pace. This housing boom, combined with the need to repair damage from severe hurricanes in Florida, created unprecedented demand for building materials such as drywall. When domestic sources of drywall ran low around 2005, some contractors and builders, particularly in Florida, began using drywall imported from China. It has been estimated that enough Chinese drywall for 60,000 homes was imported to the U.S.   

Unfortunately for the owners of the homes containing the Chinese drywall, it emits sulfur gas that corrodes copper and gives off a rotten egg smell. Attorneys for the affected homeowners also allege that the gas causes respiratory and other health problems, though the manufacturers of the drywall contend that it does not.

Class action lawsuits have been filed against builders and drywall manufacturers in a number of southern states. So far, it does not appear that any Chinese drywall made it as far as Ohio, although one Columbus-based builder, M/I Homes, has been named as a defendant in a lawsuit concerning homes it built in Florida.

Though certain builders have stepped up and voluntarily replaced the defective Chinese drywall in some homes, others are unwilling or financially unable to do so, frustrating owners who have already seen their property values plummet due to the mortgage crises. It remains to be seen whether these owners will receive any relief as a result of the lawsuits.

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