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Chinese Drywall - The Final Solution

Two things have happened in the past few weeks regarding Chinese Drywall.  I have been blogging about Chinese Drywall for two years, long before it hit the media or public conversation.  But two interesting things have happened recently which deserve comment.

In April 2010, in Louisiana, and what is called a "warning shot," and a "bellwether case," Federal Judge Eldon Fallon in New Orleans ordered Taishan Gypsum Co. Ltd., a Chinese concern, to pay seven Virginia families a total of $2.6 million to remediate defective Chinese-made drywall in their homes.  This is the first settled case of many that have hit American courts.  There are hundreds of cases already in courts to follow.  Currently residents in 37 states, Washington DC, American Samoa and Puerto Rico have filed thousands of complaints and/or have filed suit.

When was this drywall used?  Mostly during the wave of new building after the major hurricanes in the Southeastern United States between 2005 and 2007.  A majority of the cases are found in Florida, Louisiana, Mississippi and Virginia.

And where was most of it used?  According to Engineering News dot com, “ 'Most of the problems are going to be occurring near the ports where they brought in [the defective drywall],' says Ron E. Wright, a building diagnostic expert and chief operating officer of Buric, a claims consultant with an office in Wilmington, N.C. Wright testified as an expert witness in the Taishan case."

Now, maybe it's just me, but do the affected residents and the courts really think that China, or any Chinese government-controlled company, will roll over and pay whatever it takes to remediate this problem?  I remain a skeptic!  As nice as it would be for the responsible party(ies) to take responsibility for what they have done, I think it's a pipe dream to think they will.

The second recent development are guidelines issued by the Consumer Products Safety Commission.  They call it "interim guidance," issued 2 April 2010.  In their three-page document, they recommend:

  • Removing "all possible problem drywall"
  • Replacing all electrical components and wiring
  • Replacing all gas-service piping and fire suppression systems and
  • Replacing all smoke detectors and carbon monoxide alarms

Interestingly they did not issue guidelines on copper HVAC coils and copper plumbing lines.  Anything copper has been affected and is corroding.  The CPSC guidelines focus only on immediate life-threatening issues.  Copper products are caused to fail by the gas byproducts coming off this drywall and AC systems in particular have been affected and rapidly fail.  Perhaps this is why they call this report "interim guidance."  Further study or review will likely produce more guidelines.  They are still conducting gas emission testing and analysis.

This isn't exactly pure revelation!  It's a big DUH...  OF COURSE ALL OF THE CHINESE DRYWALL AND ANYTHING AFFECTED BY IT NEEDS TO BE REMOVED!!  The question has always been at whose expense.

Since it isn't an insurable problem and the builders are not really at fault, whose problem will it be ultimately?  Of course it's the homeowners' problem!  This may seem a harsh bottom line, because this problem is huge and very, very expensive to remediate, but really, whose problem is it ultimately?  If you are having this problem and want to sell or rent your house, what alternative is there? *

This is a big deal, and getting bigger.  This is terribly, terribly unfortunate.

My recommendation:  I THINK WE NEED TO RECALL CHINA!  AND AVOID CHINESE-MADE GOODS OF ALL STRIPES, SHAPES, COLORS AND SIZES.  THIS, HOWEVER, IS VERY, VERY DIFFICULT TO DO.  WE ARE INUNDATED.

* If the motor goes bad on your car, would you contact your insurance company?  And if you did, what would they say?  That it is a manufacturing problem and not covered by your policy.  And if the manufacturer would not, or could not, take responsibility, whose problem would it be?  If the motor goes bad on your Yugo, who you gonna call?

 

Jay Markanich Real Estate Inspections, LLC  

Based in Bristow, serving all of Northern Virginia.

Office (703) 330-6388   Cell (703) 585-7560

www.jaymarinspect.com


Comment balloon 96 commentsJay Markanich • April 18 2010 05:00AM

Comments

Jay, You are right about Chinese drywall being an issue. I have been reading about it for a few years now. I feel the blame should go back to the manufacturer - China. Contractors purchased the material in good faith never suspecting an issue. Fat chance that China will do anything about it though. Do I see another Government bail out looming on the horizon? - Just my 2¢'s worth this morning...

Helping you help others live their American dream...

Posted by TeamCHI - Complete Home Inspections, Inc., Home Inspectons - Nashville, TN area - 615.661.029 (Complete Home Inspections, Inc.) over 8 years ago

It will cost a lot of money to fix it...

 

Posted by Joshua Zargari, MJ Decorators Workshop (MJ Decorators Workshop LI staging and home decorating) over 8 years ago

Hi Mike - it was first installed in the 2000-2001 timeframe, but the problems didn't crop up for years.  This is my fifth post about it on AR, and likely not my last!  Of course the manufacturer has the responsibility to take care of this, but, like you, fat chance...

Joshua - you are right.  The CPSC estimates a minimum of $50K per home.  This is a big, big deal.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay,

    I went to a Real Estate "motivation" seminar last week and when I signed in they handed me the literature and an American Flag Pin to put on my lapel.  I was about to put it on my lapel when I noticed the little sticker on the back, MADE IN CHINA.  I got up and left.  We can't hold China responsible but we can hold the distributors of these cheap and dangerous products responsible.

Posted by John Ryan (Century 21 Alliance) over 8 years ago

Jay,

    I went to a Real Estate "motivation" seminar last week and when I signed in they handed me the literature and an American Flag Pin to put on my lapel.  I was about to put it on my lapel when I noticed the little sticker on the back, MADE IN CHINA.  I got up and left.  We can't hold China responsible but we can hold the distributors of these cheap and dangerous products responsible.

Posted by John Ryan (Century 21 Alliance) over 8 years ago

Ewww ewww eww....what a mess....some enterprising lawyer will claim to be able to settle, reap the benefits for the home owners...stay tuned for the infomercia/commercials.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) over 8 years ago

I agree John.  I have personally boycotted anything made in China, if I can determine it.  That is very, very hard to do though - they have really woven into our society.  Your pin probably had abnormal amounts of lead and mercury in it!

S&D - no doubt.  Someone who had "personal" experience and will "personally handle" the case.  Just send the retainer!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

This is a huge problem that will continue to rear its ugly head!

Posted by Bill True-Broker,ABRM,CIPS,CRB,CRS,GRI,RSPS (True Real Estate) over 8 years ago

Hi True - since last year the list of states it has been found in has grown dramatically.  It will grow even more.

Is that your dog?

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Just saw a pretty big judgment handed down to one of the importers of the drywall.  They're trying to go after the source for money at the moment.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 8 years ago

From whom Gabe?  I don't know how importers bringing in something legally and in good faith can be held responsible, but who knows!!  Keep me informed please when you hear of a final outcome!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Its and unfortunate experience for those who move to the Southeastern United States to find a home and then encounter the problems you have listed. Is there anyway to check that the material that is replacing this defective chinese drywall is not chinese made? Is the government doing anything to control the importing of this drywall.

Posted by David Okada, Service-Beyond Your Expectations (Douglas Elliman Real Estate) over 8 years ago

What is very troubling is the growing enormity of the problem. I have not heard of one instance of the stuff showing up here in CT.

Posted by James Quarello, Connecticut Home Inspector (JRV Home Inspection Services, LLC) over 8 years ago

Yes David - http://activerain.com/blogsview/1334774/american-made-drywall

Jim - not yet.  But the list of states seems to grow on a monthly basis.  Who knows!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Does anyone know what parts of Florida was affected most by this?  Just curious being that Florida makes up most of the complaints.  Great article Jay!

Posted by Home Design, Home Design and Real Estate over 8 years ago

Jennifer - this is about a year ago.  It may have changed since.  Like the article says, think mostly near to the ports.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay, this year my insurance company said I had to add a Chinese Drywall disclaimer in my Pre-Inspection agreement.  What a mess.

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) over 8 years ago

Hi Jay, Question?  I live in Miami Beach and heard about this on the news but I have also seen on our local news a product where they put holes in the walls and fill it with some type of special substance, thus not removing all of the drywall.

What do you know about that and is it a good option?

Posted by Jamey Prezzi Miami & Miami Beach Luxury Condos & Homes, Miami Beach & Miami Luxury Homes and Condos (ONE Sotheby's International Realty ) over 8 years ago

It is not China's problem as for as paying for the damages.  But it is their responsibility to hold the manufacturers responsible and make sure that somehow these people are all compensated!  I would not to responsible for that.  I blame the construction companies a bit as well.  Doing no research and putting these people at risk.  Trying to save a dollar and ruining many peoples lives.  They need to be held accountable as well.

Posted by Sajy Mathew, Making your real estate dreams become a reality! (Coldwell Banker Residential Brokerage) over 8 years ago

Morning Jay,  You're preaching to the choir here !  I can't support your call for boycotting China as they would just threaten to delay/cancel loaning us all that money our grandkids will be repaying !   Put pressure on China to fund needed repairs and let them collect from Chinese suppliers !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) over 8 years ago

Major problem with no easy solution.  Biggest Loser here is the homeowner.

Posted by Paul Todd, Vacation and Second Homes Sales and Management - Mentone Alabama (Mentone Cabins Realty, LLC) over 8 years ago

Jay.  You're surely on top of this matter.  

I see long term affects to our industry and home owners that go far beyond the matter of replacing some drywall.

Excellent and informative article.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 8 years ago

Jay, I'm sure these manufactures wish to walk away from the defective products they have sold consumers in the U.S. but like Toyota they are going to find it hard to stay in business without offering a solution.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) over 8 years ago

Jay, Do you have any idea of the average cost per fix? Are we talking complete homes here, one or two rooms...?

Posted by Rick Hendershot (BlogEasy for Real Estate Agents) over 8 years ago

Charlie - my lawyer son, who lives near you "up on the hill," (your words), added that to my agreement a year ago.  You should contact him and have him review your agreement...

Jamey and Ognjen - I don't know.  So far no solution has been "approved" except for the recent CPSC guidelines.  It might be that after further testing they decide that this works, but until they do the insurance companies and/or your renters/buyers might not accept it as a solution.

Sajy - ALL aspects of Chinese society, its manufacturing to occupations to school curriculum to whatever, is controlled by the government.  They have made many, many agreements with the United States government and corporations, for approved production of all kinds of products, including the drywall back in 2004.   They have one by one completely disregarded these "agreements."  98% of the CPSC recall notices I get in email form from the CPSC are Chinese.  They are not incompetent people.  Could it be on purpose?

As to the construction companies - they and the local, state and customs authorities DID investigate this drywall for months before it was admitted into the country.  Unfortunately the problems did not crop up for a couple of years.  There is only one party at fault - and that party is China.  There are reports that scientists have found pig and human feces in the drywall and strontium, which means the manufacturing process must have used nuclear waste water.  That is all by accident?  There are whole countries, particularly on the Pacific rim near China, which prohibit the importation of any and all Chinese products.  They have wised up.  We should too.

Bill - well, if we did NOT sell our (worthless) paper to China we would probably be better off!  Back in 1973 I had an econ professor in college who said we should completely boycott the importation of Middle East oil and in the long run we would be better off.  He was right...

 Wow, Bill, you are living in the middle of it!

Paul - that's it in a nutshell!

 

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Even when done well, new homes have quite a bit off offing from walls, paint, flooring, etc., but this is just incomprehsenible.  What irks me is the little guy (I don't care whether it's a 100K or 900K home -- as most people cannot afford to retire immediately with no financial consequence) ends up bearing some or all of the brunt for this while the products they buy and the taxes they pay to corporations and international companies don't seem to return the favor when there is a problem.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 8 years ago

Jay, I agree it has to be the manufacturer. In a lot of cases the builders probably have gone out of business. The builder was innocent of the knowledge anyway.

Posted by Ted Tyndall, FL Homes for Sale-Palencia, World Golf Village,Nocatee,St. Augustine (Davidson Realty Inc.) over 8 years ago

Lenn - it's weird.  If you Yahoo or Google search "Northern Virginia Chinese Drywall Expert" I pop up #1!  You blog about something for a couple of years and BOOM! you're an expert!

Steve - the manufacturers are protected by a government which disclaims responsibility or control over manufacturers.  Good luck getting money out of them!  But I agree with you.  The difference is that Toyota still wants to sell their cars here and the U.S. prohibited the further importation of this drywall in 2008.

Rick - they are thinking that the repairs may START at around $50K, per house!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Chris - if you buy a new, stylish "Smart Car," and the company suddenly goes out of business, and you find it has bad suspension and steering, what would you have to do about it?  This is going to go back to the homeowner in the end.  And we don't really pay any taxes to corporations of any type, well, untill the VAT goes through!!  Watch out there!   (;>)

Ted - of course it does!  But good luck with that.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

It is so sad for the poor homeowners.

I think if China wants to be a respected leader in the global economy, it should start acting like one by having its companies take responsibility for their products.

-Shari

Posted by Shari Song (Berkshire Hathaway Home Services) over 8 years ago

I agree Shari.  The United States consumers' purchases float about 22% of China's "global" economy.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay,

It is important to stay on top of this issue. Obviously, it's more prevalent in some areas than others. I'm not sure about the extent of the issue in Toronto and the immediate vicinity, but, it makes sense for me to find out.

Brian

Posted by Brian Madigan, LL.B., Broker (RE/MAX West Realty Inc., Brokerage (Toronto)) over 8 years ago

Not being near a port or in an area that suffered for lack of drywall after so many U.S. disasters, you are probably safe Brian, for now....   (;>)

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay,

 

I too have blogged on Chinese Drywall and the ability of renovation loans like the 203k to help with those who want to buy a home with the drywall.  As for the poor homeowners stuck with homes that contain it a class action law suit is the only I see them being made whole.  As your map above points out those of us in Florida are living with this in a big way.  Thanks for the post and I will reblog to my readers.

 

Michael

Posted by Michael Cantwell (Envoy Mortgage - NMLSR ID #644428) over 8 years ago

Michael - like Bill above, you are in the thick of it in Florida!

I have every hope that people can be made whole somehow, but fear that it will be up to them.  Aren't there still people waiting for hurrican relieve from a decade ago or so?  Wasn't that Andrew?  I don't think I would wait around for a lawsuit to handle things.  By the end of that it might be impossible to mitigate the problem.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay - Thanks for keeping on top of the issue.  The stories I have read over the past few years are a nightmare.  The financial hardship is hard to imagine.  It is going to take years for this to wind its way through the courts.  In the end I hope that everyone affected is compensated but I fear the collection process will not be very easy.  ~ Doug

Posted by Doug Anderson, Bay Area Real Estate Views (Tucker Associates Real Estate Services) over 8 years ago

This is what happens when you try to cut costs by using a new and untested product. We buy all kinds of imported goods because they are cheap, and later learn that they contain mercury and other toxins. If you want to sue the manufacturere of this drywall, you will have to hire a legal firm in China and let the case(s) work through their court system. Lots of luck. Most likely the insurers for the importers, and construction crews will pick up the tab for these lawsuits, raising the cost of manufacturing for everyone. This is a big, ugly mess.

Posted by Millie C. Legenhausen, CRS, GRI, CIPS, MBA, Realtor (Calcagni Real Estate, Hamden, Connecticut) over 8 years ago

boycott China?...that wont happen as long a we demand cheap products here in the US. And if we do the cheap goods will be made somewhere else where there is cheap labor and no regard for the environment. This is just like are so called war on drugs. Is the problem with the farmers the grow to poppy or with the US consumer hooked on heroin? Until the demand dries up the problem will continue

 

There are too many involved in the supply chain and they are all pointing the finger somewhere else. Someone here has already made the point that the homeowner is the one stuck with finding a solution And because remediation costs more than the house is worth the ultimate "bag holder", if there is a mortgage involved,  will be the mortgage holder. And if they dont pay their taxes these places will be sold for back taxes. Of course if the back taxes are more than the land value our local governments will own them

The ultimate solution will be with a bulldozer unless real estate values somehow get to the point where it costs less to fix the problem than to buy or build

 

I usually suggest that my buyers pass by the homes built since 2001 and concentrate their search on the older homes to be sure they arent buying a problem

Posted by Ron Parise (LocateHomes.com) over 8 years ago

Doug - I agree with everything you said!  I would like to stay positive, but as this problem grows it is harder to be so.

Millie - agreed too!  As to this drywall, it was not purchased because it was cheaper, but available.  There was so much demand for drywall after the disasters which began with Katrina, that American manufacturers could not keep up with the demand and providers began looking elsewhere.  Unfortunately Chinas was available!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay,

Thanks for shining a light on this topic. It is a horrible situation for homeowners.  I definitely think the manufacturer should pay for this disaster.  Great post!

Posted by Dinah Stallworth-Lewis, NATCHITOCHES, LA HOMES FOR SALE (Priority Real Estate LLC - 800.978.4847) over 8 years ago

I think so too Dinah.  Time will tell, and hopefully in favor of the homeowners.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Hey Ron - I didn't see you there!  You may be wise where you are to pass up on houses since 2001.  Most of the problem occurred after 2004, but they have found some Chinese product as far back as 2000.  Buying drywall to satisfy a real need isn't exactly like buying heroin, which is totally voluntary.  Housing values will get back up there when the market takes them there.  If they go there outside natural market forces, like during the recent bubble, there will be yet another crash.  But yes, a boycott on China would only bring good!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay - Like many of our other real estate problems, Chinese drywall will be with us for years.  I agree that it's unlikely that a Chinese manufacturer will just roll over and pay.  And it's hit homeowners in some of the worst markets, making it virtually impossible to for them to recover.

Posted by John Mulkey, Housing Guru (TheHousingGuru.com) over 8 years ago

This really is huge John.  And unlikely that a solution would be so easy as the responsible party stepping up to the plate.  If there's ever a solution...

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

This is what happens when insurance companies buy "cheap" and when the US doesn't step up IMMEDIATELY and get those vacant factories in Detroit tooled to produce what we need.  A lot could have been accomplished had we used US resources, and manufactured -- AND TESTED, and went with our safety standards, and our ingrediants -- the standards of practice.  But NO!  We had to look for the cheap, shoddy products . . . I'm NOT an isolationist.  I believe in fair world trade -- emphasis on the word FAIR!  The more I hear about these SNAFU's the more I want to barf at capitalism.  I'm all about making the Yankle Doodle Dollar -- but when people, families, home owners are so deeply affected by the outcomes, I just want to barf.  What firm/company brokered that deal to import the drywall manufactured in China?? Someone/entity brokered that deal. Who?

And not including the cooper pipes is ridiculous.  They need to AMEND that, and quickly!

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 8 years ago

I wasn't aware of this until I read one of your blogs. I haven't heard very much on the subject in Arizona at all. I'm guessing we must have some Chinese Dry Wall here too. I agreed getting China and the manufacture to step up will not be likely. What astounds me is the lack of media attention to this subject.

Keep blogging Jay maybe they will listen!

Posted by Mark Gridley, TecKnow Real Estate Agent, Fountain Hills, AZ (eXp Realty, Reinventing the National Real Estate Office!) over 8 years ago

Hi Carla - the productive capacity of drywall manufacture was at its peak when Katrina and then other disasters hit.  There was huge need for drywall, without the productive capacity to satisfy it.  I don't think they looked cheap.  The looked, and there is was. They promised that they had satisfied our safety standards (they always do, agreement, after agreement, after agreement) but still their bad stuff gets into our market.  Lead and mercury when it shouldn't be there, clothing that burns when it shouldn't have to, food that is dangerous.  It goes on and on and on.  I agree with you - the key word is FAIR.

No system other than capitalism has ever brought so many billions out of poverty and into a higher standard of living.  And it is the only system that weeds out the crap produced by people who really ARE trying to take advantage of a bad situation - like, for instance, this drywall problem.  And it's the only system with the productive ability to overcome it!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

It took blogs like mine to get the media's attention Mark!  Bloggers have become the new investigative journalists.  Journalism is too focused on its political bent to investigate anything really.  Particularly TV journalism...

I have six AR blogs on the topic you can look up.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay,

I am a skeptic that anyone will get anything out of this. I think people might as well rip it out, grimace, and get on with life.

Posted by Steven L. Smith, Bellingham WA Home Inspector (King of the House Home Inspection, Inc.) over 8 years ago

Jay, I am in Naples, FL...need I say more!  When we purchased last year we purchased a 20 year old home after previously living in a 2 year old rental.  We did not have or notice any symptoms in the newer home, but were only there 8 months.  Thanks for the info you are providing and Congrats on the feature!

Posted by Christine OShea (Christine E O'Shea Real Estate Broker) over 8 years ago

What a mess and a misfortune for so many unsuspecting homeowner, US building contractors and building supply merchants. Bet there hasn't even been any study yet, as to the long term health effect of being exposed to the toxic off gassing of the ingredients in this drywall. Who knows if it contained radio active material or whatever it contained. Very scary stuff, in fact to me it is a form of terrorism if they get away with this without paying compensation.

Posted by Mary Strang over 8 years ago

Jay, you're in Bristow.  Are there some Northern VA areas that were affected more than others?  Did this drywall make it out to your neck of the woods which has seen a lot of new construction in the mid 00s?

Posted by Rick Phillips, I care about you and your transaction. (Frankly Realty - Old Town) over 8 years ago

The Chinese drywall issue is one that Canadian snowbirds need to be knowledgeable and have a knowledgeable REALTOR and inspection team when purchasing property in the USA.

Posted by FN LN over 8 years ago

Thanks for the post. It is unfortunate for this to happen and for those who are affected will be a hassle in trying to get it rectify. 

Posted by Mike Yeo (3:16 team REALTY) over 8 years ago

I am with you and will vote with my wallet and avoid CXhinese goods until these companies make good on the defective products they sold us

Posted by Charlie Ragonesi, Homes - Big Canoe, Jasper, North Georgia Pros (AllMountainRealty.com) over 8 years ago

Let's see, the Final Solution ? - Strategic Default  or hire an arsonist ???????????????

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 8 years ago

The problem will be compouded when our Government won't stand up to China and make THEM pay to fix the problem THEY caused.

Posted by Cameron Wilson, The Short Guy - Murrieta,Temecula,Menifee Californ (Labrum Real Estate) over 8 years ago

A lot of U.S. companies have moved some manufacturing to china and from what I am hearing quality is a night mare. I hope we do stop buying chinese and revert to American made and full of "quality".

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) over 8 years ago

Jay - good point about how if your car engine goes bad, you don't have the insurance company replace it. I think it is unrealistic to ask for millions of dollars of restitution. We should all just buy American.

Posted by Mark Montross, Listing and Buyer Specialist (Catamount Realty Group) over 8 years ago

Steve - if you recall, that is what I was saying a year ago!  I am very skeptical as well.

Christine - sometimes it takes a couple of years for the symptoms to begin.  Glad you got out!  You are at ground zero!

Mary - I do not think this is accidental, but that is just me.  And the long-term problems associated with this is a big unknown, as you speculate.

Rick - I have not found it here.  My understanding is that it is in the Norfolk, VA Beach, Newport News areas.

Marc - that would be very wise.  Everyone needs a big head's up.

Mike - this will be a hassle in many ways and likely for a long time.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Charlie - that is really hard to do, which you know if you have been trying!

Michael - for sure, a lot will go into any clean up one undertakes.  And so many products are affected beyond the drywall!  A lightening strike and a complete burn down would work...

Cameron - you think this government would stand up to anyone?  I am with you - they will not.

Mike - you are right.  They are learning the hard way.  We need to wise up as a society and simply say no.

Mark - woulda, coulda, shoulda!   There will be no restitution, and certainly not from our government (read that you and me...) because we are broke now!!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Sometimes in this country you here people angry about consumer protection laws, as if they kill business. What kills is unregulated industries in China that produce deadly toys, drywall, and the like.  

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 8 years ago

Joe - we try to regulate them to our standards with agreement after agreement, but they disregard everything they agree to...  What we ask them to do is really basic however.  And they are not incompetent people, which leads me to believe it is on purpose.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

No more bailouts please, and if they do help out the citizens, then it should be taken off our bill with China. If it were easier for our own businesses to expand when there is a need (supply and demand) then our builders could BUY AMERICAN!

Posted by Elizabeth Baklaich (Virtual Assistant to Steve Baklaich RE/MAX Realty Source MN) over 8 years ago

How about the insurance companies, are they stepping up to cover the costs?  And if so, are they suing "China"?  I doubt if we'll see any money coming back from China... but maybe they'll knock some debt off of the trillions of dollar owed them by American banks!

Posted by Regina P. Brown, M.B.A., Broker, Instructor (MBA Broker Consultants) over 8 years ago

Not that I think the US government has the balls for this...  But, if they were to pay off the lawsuits on China's behalf, and then withhold the money, that would solve the problem... and lower our Chinese held debt.  The companies in China are all state controlled... and if they aren't their government could deal with collecting from the companies. 

Of course, the administration would probably want a ruling from the UN... and China would be able to veto any resolution.

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 8 years ago

I agree Elizabeth, but our "bill" with China is on paper and I don't think you can just take a portion off of it!

I address that in the post Regina.  The insurance companies have no liability in this.  Our government (read that you and me) owe the Chinese principal and interest on the paper they have bought from us, but not our banks.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Hey Lane - that's a creative solution with the debt, but they have bought our Treasury Bills and Bonds, the most trusted investment in the world.  If we were to default on some of that it would have other repercussions.  The UN!!  HA!  Good one!  The next step, AFTER the final solution!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay - Excellent post!  I'm in Delray Beach, FL.  This is something we hear about all the time.  There are certain communities that have been decimated due to some homes having Chinese Drywall.  Not all the homes have it, but enough to keep new buyers away.  The builder went belly up - there's no one to fix them.  The homeowners are stuck and homes are selling for one quarter of what they were sold for.   It's a very sad situation.

We have a couple of builders left who are taking responsibility and fixing homes with Chinese Drywall.  The situation is still bad, but they are to be commended for standing behind their product in these times. 

I  try never to buy anything made in China unless I am forced to.  They have no quality control in manufacturing of any product.   I am all too familiar with this story as my husband is an American manufacturer.  The problem is  that the American people don't want to pay for American made goods, as someone mentioned earlier.   They simply cost more.   I don't know the answer to this problem; I wish I did.

Posted by Elyse Berman, PA, Boca Raton FL (561) 716-7824 CRS, ABR, GRI,ePR (Best Connections Realty, Inc.) over 8 years ago

Wow Elyse, you are at ground zero!  I am surprised that those houses have only lost 1/4 of their value.  That builder, in stepping up like that, is building good will that is expensive now, but will pay probably dividends for him for years to come.  "We stand by what we do."  They can use that for years and years.  I try very hard to buy American, but it is really very hard to do.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay, thanks for this very informative post.  Not an easy fix for sure and boycotting can come back to bite us as we are in debt to the Chinese way over our heads, as someone mentioned earlier. 

In addition to all the health issues to people here in the US and other countries outside of China who have used this product, I can not help but think of the long term health hazards to the workers in China who are innocently making these products under the rule of their powerful employers.  It is not like there is a great respect for workers over there or unions that will halt work because of hazards in the workplace.  So on top of all this, what is the unseen toll the manufacturing of this dry wall is taking on the poor powerless laborers in China?    ---Gloria

Posted by Gloria Todor, & Doug Durren (484) 431-3686 in SE PA (Century 21 Absolute Realty ) over 8 years ago

Gloria - we are in debt to them for sure, but not over our heads.  We have done that to ourselves without their help!  You have to wonder about the Chinese people and their treatment.  You have to know they aren't treated well, as you say.

The American consumer represents 22% of their GDP.  That is a lot of power should we boycott.  Maybe it would straighten some things out!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Hi Jay, gosh yes we have a lot of power (22%) and I am all for boycotting their goods to make a statement for sure.  Boycotts do make a difference.  Thanks for the heads up.   ---Gloria

Posted by Gloria Todor, & Doug Durren (484) 431-3686 in SE PA (Century 21 Absolute Realty ) over 8 years ago

Jay,

I believe everything coming in here from China should be tested. Lead in toys, melamine in milk and candy? Everything to cut corners and save costs and improve profit.

Posted by Terry Chenier (Homelife Glenayre Realty) over 8 years ago

My recommendation: I THINK WE NEED TO RECALL CHINA! AND AVOID CHINESE-MADE GOODS OF ALL STRIPES, SHAPES, COLORS AND SIZES. THIS, HOWEVER, IS VERY, VERY DIFFICULT TO DO. WE ARE INUNDATED.

 

This is, by far, the best advice EVER given on ActiveRain. Will the masses actually pull their heads out and follow suit? Probably not. Whenever I grumble about Chinese-made garbage, my girlfriend's daughter gives me a look and asks me what's wrong with China. Listen, I've got no problems with Chinese people or even the country itself. It's the poor consumer safety standards that they DON'T have, and the fact that our economy wouldn't be in nearly as poor of shape had we kept the majority of manufacturing jobs HERE that went overseas in the last two or three decades.

 

Posted by Nick Snow over 8 years ago

Gloria - many of the countries on the Pacific Rim ban ALL goods coming from China, particularly because of all the people who have died from the melamine in Chinese food products.  Remember the dog food here?  We have many food products full of melamine and don't realize it.  I think 22% is a big number and represents a lot of power myself.

Terry - the problem with that is the the CPSC does not get involved in testing, and then issuing recalls or warnings, until AFTER a problem is found to exist.  We have no mechanism for testing everything, unless some importer wants to do that.  I know that chemical products that are imported by our companies needing them are tested for content, but that is done by those companies.

Gee Nick, what's your point?  The Chinese masters control every aspect of their society, and could not give a goat's butt about oversight of quality or standards.  I personally think all these problems we have with Chinese (and other) products is not an accident.  Why else would there be lead and mercury in things that shouldn't have them, under-wired electrical products that burn, baby high chairs that collapse and clothing that burns really easily?  It goes on and on.  I wish we had the cajones as a society to boycott, but there is never enough political will or just too much societal apathy to do what those Pacific Rim countries have done.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Tagrid - wow, how could the banks accept such a house?  The drywall does more damage, and more quickly, than termites.  They wouldn't accept a property destroyed by termites!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Very interested in this topic Jay! Keep it coming! How do we identify Chinese drywall from non-Chinese drywall?

Posted by Dean Carver (United Brokers Group/Carver Home Team) over 8 years ago

Hello Jay,

Thank you for your very relevant post.  Those of us in SW Florida (along with hundreds of others around the country) are really at a loss as to what's available to remediate short of total "rip and tear" which is now what is recommended.  To your knowledge, is there anything that can be done short of a total rip out of all sheetrock, wiring, HVAC unit, carpeting, etc.?

We're all hoping that there will be a method that is not so devastating to homeowners and homebuyers.

Thanks,

Connie Addison, RE/MAX Sundance. Bonita Springs, FL

Posted by Connie Addison, Realtor (RE/MAX Sundance Realty II) over 8 years ago

With the big lawsuit verdict that recently happened, some people seem to think that this is almost over.  Far from it.  The corporate mindset that has forced manufacturing out of the US is the culprit when we find out later the quality of imports like this are so shoddy.  When is the US public going to wise up and demand stricter import regulations and tarriffs?

Posted by Jonathan Benya, The Benya Group (The Benya Group) over 8 years ago

Jay-

There is an amazing number of replies to this.  As with all products that come from China, they manufacture and send them to us.  In return, they are often used, not due to quality, but cost.  If it breaks in a week, so be it.  It is still cheaper to purchase a new one.  We as Americans have ourselves in a pickle.  We quit buying non US manufactured materials and prices rise...to  a level that is no longer within the budget of the middle class. 

Of course it would create a ton of new jobs, but that would follow down the road.  After many of us on on the streets. 

We are in one big giant bed with China, like it or not.  Which now puts us on the defensive.  As with Johnathan above me, I agree that our job now is to demand strict import regulations. 

Posted by Rich Edgley (Greater Chicagoland Home Inspection) over 8 years ago

Dean and Sonia - from the stamps on the back.  Look for stamps that say USA or some American company.  The Chinese stamps will say Knauf, Taishin (some say Taijin) or simply Made In China.

Connie - you are at ground zero!  Over a year ago I speculated that the safest way to mitigate this is total tear down.  There are some chemical clean-up companies out there that advertise that they have a spray to get rid of the sulfur gases, etc., but I don't know 1. how well it works or 2. for how long a spray will last.  There are other problems with the material not related to sulfur, like strontium and feces (pig and human).  If it was my house I would remove it, but everything it damages will have to be removed too.  This will be hugely expensive.

Jonathan - I agree with you that this lawsuit is just the beginning of a long-term, ever-expanding, never-ending process.  In economic history, raising tarrifs has had a devastating affect on our economy.  See "the depression" for example, and the Smoot/Hawley Tarrif Act.  But we have multiple and multiple agreements with the Chinese about manufacturing things to our standards and they simply ignore them.  These are not incompetent people.  Do you think all these dangerous products are accidental?  I do not.

Rich - that regulation thing has been tried over and over and failed.  They ignore their agreements with us.  Actually manufacturing things in the US would work if corporate costs weren't so high, and these costs will only increase with things like "health care," "cap and tax," etc.  These companies went to places that had comparative advantage in labor costs to try to reduce prices on their products - the Pacific Rim, Mexico, Pakistan, etc. - but in the end the costs to the consumer in terms of quality are devastating.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Great information and worthy of a reblog!  Thanks for the well written information.

Posted by Damon Gettier, Broker/Owner ABRM, GRI, CDPE (Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert) over 8 years ago

Be careful not to rely on visual inspections for Chinese drywall.  We have been in numerous homes that had no visual signs of Chinese drywall (corrosion, etc) that tested positive.  That is why we do not even offer visual inspections, even though we are constantly asked to do them.  They are not reliable.

Think about it this way -- it took several years for the signs to show up in some homes.  What about all of the variables that could increase/decrease the manifestation of these problems.  We know that heat and humidity are highly impactful.  Air conditioning (heating and cooling) drastically affect heat and humidity.  How often was the AC run?  Is the AC sized appropriately (most residential units are not)?  Was the home occupied all year long?  Way too many variables...

Posted by Joseph Weissglass, Chinese Drywall Testing (Certified Chinese Drywall Testing, LLC) over 8 years ago

Damon - thanks.  This is something that will not be going away any time soon!

Joseph - certainly condensation is very affective.  Humidity as well.  I have told many people about your spectrometry service.  We were going to link websites and you never got back to me!  I am still interested.

What's your take on Northern Virginia?  How affected is it?  I have heard very little.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Jay, if the Chinese government were to owe a judgement, and the money to satisfy that judgement were withheld from the payout of an investment, that wouldn't be a default... although it would likely limit their future investment in out Treasury paper. 

Posted by Lane Bailey, Realtor & Car Guy (Century 21 Results Realty) over 8 years ago

Buy American.

Posted by Whitney Peddy (de Luxe Homes & Estates) over 8 years ago

Jay, Great article, congrats on your featured post. I know first hand here in SW Florida, this stuff is nasty, and is devastating to new homeowners that have poured their entire life savings into a home they can't even live in. I've seen homeowners evacuate their home leaving all their possessions because the smell from this stuff just permeates. It's heartbreaking. Jay

Posted by Jay Lloyd, Allpro Home Inspection (Cape Coral Florida) over 8 years ago

This is really ashame.  There are so many ways I think Americans have been taken advantage of.  I hope the Chinese companies are responsible, but like you I am skeptical.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 8 years ago

The reason why the problem is so widespread is not just the fault of China. Its builders and contracts selecting the cheapest drywall available to cut costs. Just like the American flag pins made in China by a cheaper manufacturer. Im witnessing Chinese corporations build warehouses to import and distribute equipment purchased by American companies because its cheaper than Made in the USA equipment.

Posted by Mike Wong, Realtor: Commercial, Residential, Leasing, Invest (Keller Williams Realty Southwest) over 8 years ago

Hi Jay.  It's time we got back to producing our own products!  I think it just terrible we're allowing everything to be imported.  What ever happened to good ol' USA knowhow?

Posted by Gary Swanson (Century 21 Harris & Taylor) over 8 years ago

It would Lane.  Which I am not sure is such a bad idea - limiting their investment.  The problem is, we have been gotten into so much debt.  It's sell paper and pay big bucks or print money and pay bigger bucks.  This government has us in a deep hole with poop-tipped bamboo at the bottom.

Jay - you are at ground zero man!  This is a big, big deal and people are only now waking up to it.

Whitney - smooch!  You are right...

Joan - I remain the skeptic I was two years ago when I first started writing about this problem.

Mike - that wasn't how it happened at all.  And the Chinese Drywall isn't the cheapest.  It was available at a time when we could not produce enough.  If you read all my posts on this stuff you will see that I think it is not accidental.

Gary - it's still out there.  Our manufacturing was trying to employ some comparative advantage in labor costs and we are left with all the other baggage that comes with that.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

Between Chinese drywall and all the lead paint violation recalls on products coming from China, it might be useful to recall China, but then they would recall our debt. LOL

Posted by Russel Ray, San Diego Business & Marketing Consultant & Photographer (Russel Ray) over 8 years ago

They bought paper, Russel.  It hasn't matured yet.  But the drywall appears to have!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

How does one test for Chinese Drywall?

And is it safe to say that one can avoid it (in most cases) by buying a home built before 1999?

Posted by Benjamin Clark, Buyer's Agent - Certified Negotiation Expert (Homebuyer Representation, Inc.) over 8 years ago

Yes to the second question, Benjamin.  As to the first, there are a couple of companies checking for it with spectrometers, but there are no "approved" protocols for determining it.  Looking for the stamps on the back works too, but sometimes that is not easy.

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) over 8 years ago

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