Posts Tagged ‘Knauf’

Around the Web in Construction Law – May 13, 2010

On May 14, 2010        

For some time in 2009, the Construction Law Monitor published an “Around The Web” post each Friday, highlighting some of the top construction law updates around the web that week.   We’ve fallen off the wagon a bit in recent months, but we’re doing our best to bringing the feature back.

A lot of the Around The Web material will come from my personal Google Reader Shared Items Feed. You can subscribe to its RSS directly.

Here’s what we’ve been following ( and talking about) for the past few weeks:

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China Speaks Out on Drywall Issues

On March 31, 2009        

It was really only a matter of time.

The Wall Street Journal’s “China Journal” has translated an article written in Chinese that provides us with some insight into how the U.S.’ Chinese Drywall crisis is playing out in Chinese media.

The verdict?   They blame America.

According to the report, China is simply confused (and I’m paraphrasing) that Knauf Plasterboard could supply 75% of the drywall for the Beijing Olympics and over a million tons of drywall to countries around the world in 2006 and 2007, yet only receive complaints from the United States.

Xu Luoyi, the head of the National Building Materials Industrial Technology Supervisory Research Center (real organization) offered this potential explanation:

It’s worth considering why this problem has only emerged in the United States.  The U.S. credit crisis has caused the real estate market to collapse, and as a result domestic drywall manufacturers have seen their sales suffer and their product is relatively expensive compared to the Chinese-made drywall, so we should also consider these issues.

Cryptic quote from Xu Luoyi, but the commentary does offer a perplexing thought:  Why is the United States the only ones complaining?   Is it a climate issue?  Is it because we’re more litigious than other countries?   Or did we coincidentally get the only contaminated drywall?

It is important to note that the concern from China (and its defensiveness) comes at the heels of 2 U.S. Senators proposing federal legislation to put a hold on certain Chinese imports.

Posted in:     Chinese Drywall  /  Tags: , , ,   /   Leave a comment

How One Builder is Handling Chinese Drywall Problems

On March 23, 2009        

Lennar Co. used Chinese Drywall in the construction of some of its Florida homes. Now that the drywall is earmarked contaminated, and causing problems across the country, the nationwide builder has dealt with the problem with a one-two punch.

First, it is working to rebuild the affected homes. That’s right, rebuild them.  According to press releases, Lennar Company is removing and replacing contaminated drywall, and even paying the relocation expenses for customers while they are out of the home.

Second, to protect itself from future legal liability and to recover the expenses of its first move (above), it has filed suit against its suppliers and installers for the damages caused to them.

This proactive approach is perhaps one of the most aggressive responses to the Chinese Drywall situation from builders or suppliers.   And, arguably, it may be the best approach a company with Chinese Drywall exposure can take.

Lennar’s approach seemingly has the following positive affects for its company:

  1. By repairing the contaminated homes, Lennar has fulfilled any of its warranty obligations;
  2. The pro-active approach resulted in positive press for the company’;
  3. By filing a lawsuit against its suppliers and installers, Lennar preserved its legal rights against those parties (read the 105 page complaint here);
  4. Lennar has proof that it mitigated its damages after exposure to contamination liability.  The mitigation efforts will pay off in Lennar’s claims against its insurers, suppliers and installers.
  5. Lennar has homeowners whose homes are repaired sign waivers to limit the company’s future exposure.

Of course, Lennar’s efforts are not without its critics.

InjuryBoard.com reported that some homeowners regret signing Lennar’s waiver because they were not completely compensated for damages.   Further, in response to Lennar’s suit against Knauf, the supplier released a statement complaining that it only supplied approximately 20% of the drywall at controversy – yet is the only company sued.

The Chinese Drywall situation is clearly a bad situation…and any company involved must simply perform damage control.   Lennar Company is one of the first to aggressively protect themselves – legally, publicly, and practically.   It serves as a very fair example of how some companies involved with the contamination may approach the controversy.

As part of Lennar’s PR campaign, they recently spoke out about their response to finding Chinese Drywall contamination.  The video is reproduced below.

Posted in:     Chinese Drywall  /  Tags: , ,   /   4 Comments