The Chinese Drywall saga and how it relates to builders shook up a bit in Virginia this week when the Chesapeake Board of Building Code Appeals ordered a developer to remove Chinese Drywall from a hotel that was days from opening. While not an order from a Virginia court, the board's action demonstrates that builders and developers may actually be committing code violations and breaching their duties to the construction project by installing Chinese Drywall - whether they're aware of it, or not. Aside from what this order says about builder exposure, what is perhaps more interesting here is that Chinese Drywall is still being used on construction projects in the U.S., as this project was just nearing completion. Developer Dilip Patel said the order will delay the hotel's opening by at least six months. Here are some of the legal questions this situation will present for the parties:
- Whether or not there is a liquidated damages clause, is this excusable delay? Or will Patel be liable for delay damages?
- Is this going to be a change order, or will the developer be forced to swallow the added expense?
- If the drywall was given the time to cause damage, it's possible that Patel would have a claim against his insurer. But what now? No damage, no claim?