South Florida homebuyers leery about Chinese drywall

WEST PALM BEACH, Fla. – Nov. 3, 2009 – Home buyers in South Florida are petrified of tainted Chinese drywall.

Some rule out entire neighborhoods or houses and condos built within the past seven years. Others don’t want anything to do with builders known to have used Chinese drywall. And buyers who do sign contracts seek assurances that might not prove reliable.

Mike and Sandy Siegel are asking potential neighbors in the Tivoli Isles community west of Delray Beach about any evidence of the drywall. The couple had a handyman climb into the attic of the home they want to buy to make sure Knauf Plasterboard Tianjin, a Chinese maker of drywall and other building materials, is not written on any of the boards.

“There are no signs yet, but you never know,” Mike Siegel said. “Once you get this, it’s a son of a gun.”

As many as 100,000 homes in the nation, including 36,000 in Florida, could have the imported wallboard, which is thought to corrode wiring, copper pipes, appliances and metals and give off a “rotten egg” stench.

Worse, homeowners say, are the nosebleeds, respiratory problems and other symptoms they blame on the drywall.

However, state and federal officials said last week they had yet to link the drywall to any health risks.

Builders used the material from China because of a shortage of American-made drywall earlier this decade during the housing boom and after the busy hurricane seasons of 2004 and 2005. Even older homes renovated in recent years could have the suspect drywall.

Most builders have refused to fix the homes, and lenders and property insurers have offered little or no relief.

Homeowners who can afford to are moving into rental housing. Others are abandoning the properties.

Hoping to avoid any drywall-caused problems, “buyers are asking a lot more questions and doing a lot more research,” said Jon Klein, a real estate agent for Coldwell Banker in Broward County. “They’re very cautious. Very cautious. I would be, too.”

Some buyers refuse to consider homes that don’t have Chinese drywall if they’re in developments where the problem is prevalent.

“It’s fair to say that anyone who buys a home in a community with Chinese drywall is adversely affected as well,” Boca Raton attorney Allison Grant said. “It hurts everybody’s property values.”

The Broward County property appraiser is slashing assessed values of affected homes in half, and Palm Beach County also plans to cut values.

Based on those assessments, nearby homes without Chinese drywall also stand to lose value.

Drywall complaints in Broward and Palm Beach counties generally have come from Parkland, Pompano Beach, Davie, Miramar, Boca Raton and communities west of Delray Beach and Boynton Beach.

Parkland has been the unofficial epicenter for the drywall complaints in South Florida. About 150 homes there have it, Mayor Michael Udine said.

Heron Bay and Parkland Golf & Country Club are the two developments most affected in Parkland. Many people expected all home sales in those communities to decline, but that hasn’t been the case, Udine said.

Udine said he has heard that investors are trying to get deals on homes with the drywall and factoring in the cost to repair them, even though the federal government has not yet issued an official remediation plan.

But many buyers who intend to live near reported cases of Chinese drywall are trying to make sure they don’t inherit a major hassle.

Debbie Anderson, an agent for Prudential Florida Realty, held an open house recently for a new home in Parkland Golf & Country Club.

“I had a pretty good turnout – about 10 people,” Anderson said. “Almost every one, as soon as they walked in, asked, ‘Does this house have Chinese drywall?’ “

Some real estate agents note it in marketing materials if a home does not have problem drywall. Other agents prefer to exclude any mention of it.

Under Florida law, sellers and their real estate agents must disclose any known material defect or condition that would affect the value of a home.

The Florida Association of Realtors added a disclosure form for Chinese drywall, but there is no state law requiring sellers to use it.

Buyers are starting to hire inspectors such as Howard Ehrsam to test homes before they commit to the purchase.

“They’ve invested a lot of emotion and energy into finding homes, and if they’re tainted, they get pretty upset,” Ehrsam said. “But they’re also relieved that they’re finding out now versus later.”

Ehrsam, a civil engineer and general contractor from Port St. Lucie, said he saw a need for the niche business across Florida and beyond because many home inspectors don’t know how to detect Chinese drywall.

He and his workers check a home’s mechanical systems, electrical outlets and appliances for corrosion. They also dig into walls and ceilings.

They summarize their findings in a written report, but it does not come with a guarantee. Because so little is known about Chinese drywall, Ehrsam said all he can offer is a “professional opinion.”

Julie Fass cast a wide net across Broward County in her search for a home and was drawn to one development in Coconut Creek.

The curb appeal was striking, and the interior of the home had plenty of bells and whistles. But then she found out the builder was dealing with Chinese drywall elsewhere, so she reluctantly moved on.

Fass’ search continues, though she has narrowed it to Weston because most of the homes there were built before 2005, she said. When she does find a house, she will check the drywall in the attic to make sure it’s not from China.

“There are so many things you have to think about when you’re buying a home, and this is just one more,” Fass said. “It’s a pain.”

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