Chinese Drywall: A sign of problems to come or a false alarm?
Living in Florida there has been no shortage of news about the Chinese drywall and the problems it has caused. While the problems Chinese drywall has caused have been well documented and appears to be a widespread problem with an identifiable source it has caused me to wonder whether this problem is a sign of problems to come. On April 30th Lisa Jackson of the EPA wrote Gov. Christ of Florida a letter stating that the EPA was conducting an ongoing analysis of the drywall samples sent to the EPA labs and was developing a program for air quality sampling.
The Chinese drywall when exposed to high heat or high humidity (both of which are a part of daily life in Florida and much of the South) releases hydrogen sulfide, carbonyl sulfide and carbon disulfide which cause copper corrosion (rapidly deteriorating air conditioning coils and electrical components are common problems) as well as a potential health threat.
Several class action law suits have been filed against foreign manufactures of the drywall. The Chinese drywall problem has caused me to think of what other problems may arise from poor quality control of construction materials. Imagine the problems that could arise if Chinese drywall was used in a LEED certified project! One of the major selling points of LEED certification is the enhanced indoor air quality and corresponding occupant well-being. A building built with Chinese drywall might initially have excellent air quality but after being exposed to heat and humidity could deteriorate to the point where the building becomes unusable. Imagine how that lawsuit would play out! Is the Chinese drywall problem an isolated incident or will we see a wave of future problems arising from quality assurance problems and materials being incorporated into LEED projects?
For more information regarding the EPA's role in the drywall investigation consult this article by the Tampa Bay Business Journal.
Rich,
Good point!
I know someone that has a home in Florida that's likely impacted by this Chinese drywall issue. Interesting is the fact that, after recent testing (an analysis of photographs), their home seems to only have a potential issue with air quality in the unconditioned garage space. However, they keep all exterior windows continually closed and the AC running year round so the interior drywall is kept in a near perfect climate. Along your lines, I'm wondering what would happen if the home ever changes hands and that future owner decides to keep the exterior windows open and there suddenly becomes a problem, say, 20 years from now? I wonder if remediation for this issue will simply use the current owners patterns of interior climate control, or will just assume that at some point someone will expose the Chinese drywall to conditions that are known to cause issues?
Nice work Rich. I have the Chinese dry wall-LEED comparison on my short list of blog posts to write. Keep up the good work.
Mike,
You raise a very interesting issue regarding implied warranties and what might happen down the road. I wonder if a homeowner who suspects but is not sure their home contains a problem material and sells the home without disclosing their suspicion would be held liable? I don't think for remediation you could mandate someone use their home only with the windows shut and A/C on and therefore the home would have to be brought up to the standard of a home which could be used and operated in the traditional manner.
Chris,
Thanks for the kind words. I think that there are numerous LEED related issues with the Chinese drywall and as Mike has pointed out potential disclosure, breach of warranty, and remediation issues as well. Can't wait to see your post!
Caveat Emptor takes on a whole new meaning. I will be interested to see how all of this plays out.
Chris,
As the problem is of great concern in Florida it will be interesting to see how Caveat Emptor and the requirement of disclosure of latent defects known to the seller as established in Johnson v. Davis will play out in the state. Does knowledge that a neighbor's home has had problems but yours has not rise to the level of requiring disclosure? I guess only time will tell...
I am strangely drawn to this particular case and was discussing the details with a local attorney with a specialty in construction and real estate. When we really got into it, he was very concerned about the potential issues of product liability for new, untested building products that are flooding the market on a daily basis. In the event a product should fail on a scope similar to the Chinese drywall (or historical cases like Tyvek, asbestos, or EIFS), how does a GC or subcontractor effectively transfer that risk away from them? Should the product manufacturer provide the defense of everyone that will be named in the suit? What if the manufacturer does not maintain a domestic, US presence (like the Chinese manufacturer or even the German distributor)? That will leave the local GC's, CM's and subs tremendously exposed to massive class-action litigation.
New, untested products scare casualty underwriters. Construction defect and faulty workmanship claims are just sitting patiently, dangling their feet off the edge of the cliff as the sustainable building train speeds down the tracks. How far ahead is the bridge out? With this case, it may be closer than we think. And where is Superman to lie down on the tracks so the train doesn't crash? Vik?
Mark,
I do not believe that any manufacturer would ever agree to indemnify any GC or CM using a new product, as the unknown is simply too great. I think part of the risk will play out in product liability if a product is deemed hazardous to health (i.e. Asbestos). I think that what we will ultimately see is contract provisions which shift the risk to the party wanting to use the new product in a project. In other words if the developer insists on using a new and relatively untested product the GC should not bear the risk of potential problems stemming from the use of the material. If however, the GC or LEED AP pushes for the use of a certain product they should bear the liability for it.
I think the Superman in this one is going to be a combination between careful legal drafting and good system of sharing knowledge such as that to be provided by Vik and Konstructr.