Chinese Drywall Maker Reaches Settlement
In a move to quell the controversy over homes built with defective drywall, Knauf Plasterboard Tianjin Co., a German-owned exporter of the Chinese-made product, has reached a settlement with Atlanta-based builder Beazer Homes USA, Inc., reports The Wall Street Journal.
This agreement is the first of around 200 lawsuits filed against Knauf for its faulty drywall, as the company races to keep the matter out of court.
As home construction surged during the boom, Knauf's product, which is also called gypsum board, was imported and slapped into the construction of many residences across America.
Now U.S. homeowners -- many of whom paid top price -- and their home-builders have discovered that the drywall is emitting hazardous sulfur-like odors, corroding metal and causing health problems. The builders are facing lawsuits, and in turn have sued the product's manufacturers and others associated with it.
According to the Journal, Beazer disclosed in its quarterly report that there are approximately 50 homes in Southwest Florida where the drywall was installed, and the company is setting aside close to $27 million toward the problem. Lennar Corp., another builder embattled in the mess, has allocated $81 million to fix about 750 Florida homes.
In an average home, the estimated expense to extricate the defective drywall and cover related damage to electrical wiring and appliances is $100,000. According to the consulting firm Towers Watson, the U.S. has incurred total costs ranging somewhere from $15 billion to $25 billion.
And this figure may stem from the number of individuals affected.
Approximately, 3,300 complaints from 37 states have been filed with the U.S. Consumer Product Safety Commission. But despite allegations implicating the company nationwide, Kerry Miller, a partner at the New Orleans law firm Frilot LLC which is representing Knauf, said the origins of the drywall will have to verified as a Knauf product.
"We have a lot of people calling and saying we have drywall that says "Made in China" on it and they assume that it's ours," said Miller. "But it's not necessarily ours."
Miller added that Knauf is in negotiations with six to 10 other builders, who used the material in U.S. home constructions, and that further settlements are imminent within weeks.
If you're contemplating the purchase of a new home built by one of these companies, find out the source of the drywall before going to contract.