Toxic Chinese drywall in luxury condo: what recourse do owners have?

By Deborah Goonan

A recent news report shatters the myth that shoddy construction and materials are only associated with low-end housing construction. Brickell, a luxury south Florida condominium – price range $300K to $1 million – has discovered that 29 of its units contain toxic Chinese drywall. It’s going to cost millions to replace, and result in a long, drawn-out legal battle with the contractors who originally did the drywall installation.

Apparently, Chinese drywall emits gases that corrode plumbing and other components. So this goes well beyond replacing drywall. What a nightmare!

It’s amazing to me that some developers are so fixated on saving a few pennies here and there that they will ultimately risk the health and safety of future owners and tenants.

You would think that a developer would be concerned about avoiding future liability for shoddy or defective construction. But the fact is that, especially for the big players, it’s all a numbers and probability game. As long as they sell enough units, the massive profits will more than cover losses from lawsuits and warranty claims. Many of these claims are insured, although construction insurance costs has skyrocketed in recent years as a result of an increase in construction defect claims. During the last housing boom, it seems, a lot of homes were hastily built, and not carefully inspected for building code violations prior to occupancy.

Less than a decade later, all of that careless behavior and insufficient oversight is coming back to haunt property owners all over the country. Most of these defects would not be apparent with a regular home inspection at the time of sale. They would be hidden, or latent, defects that aren’t noticed until several years later.

What recourse do homeowners have? It may prove difficult to fully recover costs of repairs and damages, if any costs can be recovered at all.

A recent legislative summary written by James Birr, Esq., Jimerson & Cobb, notes that developers and construction companies know how to navigate the system, and get homeowners and Associations to settle out of court, confidentially.  Unfortunately, that means consumers will never know about all the warts and flaws of homes they are about to purchase, and whether or not those issues were fully resolved or addressed with “band-aid” solutions.

And at the state level, powerful developer and construction lobbies in Florida have managed to push for laws that limit their liability for defective construction, especially with regard to common elements of HOAs, according to this summary of the American Bar Association.  And this blog written by Alex Nelson, Benson, Kerrane, Storz & Nelson, P.C., summarizes the efforts by Colorado developers to make it difficult for homeowners to find justice through the civil courts, by forcing mandatory arbitration on terms unfavorable to homeowners. These are just two examples. Similar efforts exist in other states.

Most homeowners are not paying attention to this issue, but they should be.

Read more about the nightmare in Brickell condos at the Miami Herald:

Defective Chinese drywall found in luxury Brickell condo

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