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The federal government’s Consumer Product Safety Commission (CPSC) and Department of Housing and Urban Development (HUD) released today updated guidance for fixing homes with tainted drywall that damaged new homes’ electrical equipment, corroded pipes, created foul smells, and led to residents’ health problems.

Remediating the problem requires that homeowners replace all problem drywall; smoke and carbon monoxide alarms; electrical receptacles, switches and circuit breakers; and fusible-type fire sprinkler heads, the agencies said in a news release. They have stopped recommending the replacement of gas service piping or glass bulb fire sprinkler heads, though they continue to recommend replacement of all fusible-type fire sprinkler heads. Those changes could reduce the overall remediation cost, they said. All the recommendations are based on studies just completed by the National Institute of Standards and Technology.

CPSC said today it believes there may be as many as 6,300 homes nationwide with problem drywall; it said it has received 3,905 reports. A large number of those homes used much of the 7 million sheets of drywall that was imported from China between 2000 and 2009. Today’s CPSC/HUD statement notes that tests conducted at Lawrence Berkeley National Laboratory “found considerably higher hydrogen sulfide emission rates from some, but not all, Chinese drywall samples compared to North American samples.”

While CPSC said it received reports from 42 states and the District of Columbia, American Samoa, and Puerto Rico, homes in hot, humid states such as Florida and Louisiana appear to have been most damaged by the tainted drywall. Today’s announcement said the lab tests found that increases in temperature and humidity “corresponded with increased emission rates of the most reactive sulfur gases.”

According to a list compiled by ProPublica and the Sarasota Herald Tribune and published Dec. 15, at least 95 companies have been implicated as distributors in lawsuits filed against Chinese manufacturers accused of being the source of tainted drywall. Banner Supply tops the list, while others on it include such ProSales 100 companies as L&W Supply, ProBuild, Stock Building Supply, and 84 Lumber. In June, Banner Supply Co. of Miami agreed to pay Florida homeowners $54.5 million to repair homes damaged because of tainted drywall that it had sold to builders.

This article was originally posted on ProSales Online.

As court action grinds on in the thousands of cases of defective Chinese drywall in houses near the Gulf and Atlantic coasts, there’s finally starting to be some action in the real world: people have started fixing the homes afflicted with the defective material.

The court-ordered pilot remediation program of 300 homes involved in litigation in the New Orleans Federal District court will be carried out by a large commercial contracting firm, Moss & Associates. Moss’ portfolio includes state prisons, high-rise condos, and the Florida Marlins baseball stadium. That’s an impressive track record; but to some, the big firm seems like an odd fit for a succession of small one-house residential gut-rehabs on scattered sites. And individual homeowners who may be trying to fix their homes with their own cash, outside of the court-managed program, are more likely to turn to the more traditional residential remodeling market.

But how does a homeowner find a contractor? It’s a puzzle, says Tampa Bay builder and remodeler Eric Stockland of Charter Bay Homes. There’s a lot of information out there, Stockland observes — but much of it is wrong. “Not to name any names,” says Stockland, “but there are some sources out there who have made themselves seem very official, who are just frauds. And to a regular homeowner, who’s not real savvy, you really have to know what you’re looking at to realize that you’re being sold a bill of goods.”

Stockland has been working in the Tampa Bay area for about 16 years — first as the owner of his own remodeling company, then as a project manager for U.S. Home and as a V.P. for Lennar, and then finally as Chief Operating Officer for luxury homebuilders Nohl Crest Homes. But the collapse of the Florida market took Nohl Crest down, and Stockland ended up a remodeler again. These days, about half his small company’s revenue comes from Chinese drywall remediation. As Stockland observes, a good drywall remediation contractor benefits from experience as a remodeler and as a production builder. The demolition and removal part of the job is a classic remodeling task; but once the house is gutted to the studs, you’re basically just setting the clock back and completing a homebuilding job from the dry-in stage on.

Now, Stockland is assembling an impressive set of YouTube videos explaining how Chinese drywall remediation works. On the one hand, it’s marketing for his company; but Stockland says he also hopes his videos will prove useful for homeowners outside the Tampa Bay area. “Ideally,” he explains, “we’d like to become a knowledge resource for anyone with Chinese drywall. We don’t know how many videos we’ll have in the end, because I’ve got tons of raw footage. But we want to have 20 or 25 videos that will walk a homeowner through the entire process, so that no matter where they live, they can watch and understand how it should be done — and it can help them select a Chinese drywall contractor who’s the real deal, who can actually take care of them, and at the end of the process they will get a house that they can live in again.”

Already, Charter Bay’s video set is a valuable information resource — not just for customers, but as a good introduction for any other contractor who may want to tackle Chinese drywall remediation work. One of the most useful segments is a two-part pair of videos where Stockland steps through two sets of specifications for Chinese drywall remediation: Judge Eldon Fallon’s court order in the New Orleans litigation, and the remediation protocol put out by the Department of Housing and Urban Development (HUD) and the Consumer Products Safety Commission (CPSC). Item by item, Stockland compares Fallon’s order with the CPSC’s recommendations, and then he weighs in with his own company’s recommendation (based on the assumption that the homeowner, and not a court defendant, will have to bear the cost of repairs).

So for example, where Fallon assumes that cabinets and countertops will have to be completely replaced (on the drywall manufacturer’s dime), Stockland recommends carefully removing, storing, and re-installing the cabinets (which could save tens of thousands of dollars for the homeowners). But when it comes to wiring, Stockland agrees with Fallon — it all comes out.

And Stockland delves into the fine points of what to keep and what to junk. For instance, indoor air conditioner coils are typically ruined. But what about the outdoor coils, which haven’t been exposed to sulfuric gases? Those units should be inspected for damage, but even more important, Stockland notes, is the possible effect of EPA-mandated changes in refrigerants sold in the U.S. market. Explains Stockland: “The homes that we’re typically seeing have the old refrigerant. And when we go to replace the inside unit, the air handler, we also have to replace the outside unit so that the refrigerant types match.”

Stockland’s advice on how to safely remove and store granite countertops, without breaking them, is well worth the time spent to watch that clip. But even better is his detailed walk-through of methods for labeling, photographing, and documenting every sheet of drywall removed — required in Judge Fallon’s order as preservation of evidence for anyone who hopes to be reimbursed for the cost of remediation out of a Federal court damage award.

Stockland’s laid-back manner on the videos partially disguises his natural character as a compulsive organizer. But there’s no missing the telltale signs of a hyper-organized contractor in the methods he shares: numbering each sheet of drywall in place, photographing the “made in China” label on the back, annotating the blueprints with the location of each piece, and even stitching the photos together into a 360-degree panorama of each room. This isn’t bull-and-jam demolition — it’s systematic, carefully documented dis-assembly.

The perfectionism of a high-end builder and remodeler leaves Eric Stockland himself a little dissatisfied with his video product. “As I look at my videos,” he confesses, “there are parts of them that I really can’t stand. I wish I had done it better, and I wish I had better lighting and this and that. But then I tell myself, it’s okay, the information is there. It doesn’t look as professional as I want it to look sometimes, but that’s all right. The homeowner can use it for the purpose that it was intended for. And the idea is not to be fear-mongering. It’s just to say, ‘Okay — you got a problem. Here is what the bona fide experts say needs to be done, and here is how we actually go about doing it.’ I fully expect that the majority of the people who look at that won’t be my actual customers, but I think there’s some value in sharing the information.”

Two days after the release of NAHB guidelines outlining the testing and remediation of contaminated Chinese drywall, the Consumer Product Safety Commission in conjunction with the U.S. Department of Housing and Urban Development issued its own report, one that differs from the NAHB document regarding electrical wiring.

The NAHB’s 80-plus page document, “Imported Problematic Drywall: Identification Strategies and Remediation Guidelines,” recommends that all wiring in affected homes be replaced, while the CPSC/HUD report, “Remediation Guidance for Homes with Corrosion from Problem Drywall as of March 18, 2011,” does not.

Despite these seeming differences of opinion, the NAHB advises its members to follow the CPSC guidelines. The information released by the CPSC had been fervently anticipated by the NAHB for a number of months. The NAHB document even states that the CPSC’s results were not yet available but “recommends that builders pay close attention to these test results when they are announced and take them into account when deciding what steps to take with respect to high-voltage wiring.”

The NAHB supports and fully agrees with the findings in the CPSC/HUD document, according to Ray Kothe, chair of the NAHB’s Chinese Drywall Task Force. “We felt for quite a while that the manufacturers had done testing but nobody wanted to come out and make statements,” Kothe says. “We believe that the CPSC’s conclusions are correct and are not surprising to us. [CPSC] did a lot of testing and I’m sure they erred on the safe side because they have to be extremely sure that their results are accurate before they issue their proclamation.”

That being said, the two documents differ only in the recommendation regarding wiring. Both propose the total replacement of all problem drywall, fire safety alarm devices, gas service and sprinkler system piping, and electrical distribution components such as switches, receptacles, and circuit breakers.

Taken together, both documents would likely be a handy guide for any builder, remodeler, or remediator charged with eradicating a home with contaminated drywall. Since both guidelines were created using very different methodologies yet reaching most of the same basic conclusions, they would be hard to ignore, especially considering the amount of expertise involved from dozens, if not hundreds, of experts.

The CPSC/HUD report (it is a breeze to read at only three pages) is based on a study conducted by Sandia National Laboratories that found no evidence of a safety hazard to home electrical systems from tainted Chinese drywall. The Sandia experiments exposed various residential electrical components to harsh corrosive conditions for a number of weeks that would mimic a 40-year exposure in a house constructed with contaminated Chinese drywall.

No fire, smoking, or other “safety events” occurred during the course of the Sandia research, but the document notes the experiment’s limited scope which could not take into account all of the variables in every home with contaminated drywall, i.e., weather, shoddy workmanship, various component brands, etc. For the purpose of these studies, all of the components were installed to the manufacturers’ specifications.

The NAHB document is the result of more than a year of research, testing, analysis, and evaluation by the NAHB’s Chinese Drywall Task Force, which was charged with identifying a permanent solution to deal with a problem that has been affecting contractors as well as homeowners, mostly in the Southeastern U.S., since 2006. According to Kothe, the NAHB guidelines were created after “we got as much input as we could gather.” Builders and remodelers in the field from every cross-section of the residential construction industry were queried and the guidelines were created based on their myriad recommendations. Experts from the gypsum industry—a major component of drywall—were also included in the conversations along with legal and medical experts.

NAHB’s guidelines are nothing if not thorough, giving contractors step-by-step instructions on everything from where to place metal probes that detect airborne impurities to details on how to properly air out a home once the drywall has been replaced, and quite literally every step in between. There are even details on how to deal with a house that has its own elevator. “Our document is very hands-on in the way in which it was created,” Kothe says. “The terminology is understandable and self-explanatory about what we recommend and that was our intention. Basically the NAHB has created a user-friendly, working document that someone in the field can easily use.”

NAHB emphasizes that its new document is only a guideline for contractors who are undertaking the drywall-abating procedure. No federal, state, or local governments have mandated that the recommendations should be followed to the letter. In fact it is entirely possible—if not probable—that contractors who have been dealing with contaminated Chinese drywall might already have their own methods that could possibly go beyond the NAHB recommendations.

The CPSC, meanwhile, is in the final stages of completing its investigation into the problematic Chinese drywall debacle. The findings of the Interagency Drywall Task Force’s investigation can be found at www.drywallresponse.gov

—Mark A. Newman

A federal court judge in Louisiana has rendered a decision that is bad news for owners of homes with defective Chinese drywall and good news for home builders facing claims for the costs of replacing defective drywall in homes they built.

U.S. Judge Eldon Fallon of the eastern district of Louisiana ruled in December that the foul-smelling, metal-corroding drywall does qualify as a sudden, accidental, physical loss that would be covered under homeowners’ policies. However, the homeowners’ policies contain exclusions that prevent it from being a covered loss.

Specifically, many of the homeowners’ polices have clauses that exclude coverage for faulty materials or corrosion damage. Fallon said those two exclusions apply and, therefore, the homeowners insurance companies that have such exclusions can deny payment for damages and repairs related to the drywall.

In the ruling, Judge Fallon did rule out other exclusions that insurance companies said also excluded the drywall damage from coverage, including the latent-defect, pollution and/or contamination, and dampness-exclusion clauses in some policies.

While the ruling was bad news for homeowners seeking insurance compensation, it had aspects that were good news for builders, said Stephen R. Mysliwiec, an attorney at DLA Piper who represents builders in product liability, construction defect, and insurance coverage cases.

“Judge Fallon’s ruling may make it more difficult for homeowners to persuade courts that they should be covered under homeowner policies, but his ruling helps builders seeking coverage under their general liability policies,” he said.

The fact that the judge ruled that the drywall causes an accidental, physical loss should make it easier for builders seeking to recover repair costs under their own liability policies, he said. Since builders’ liability policies don’t typically have the exclusions of coverage for faulty workmanship or corrosion in their policies, they stand more of a chance to collect on their policies.

“In a builder’s general liability policy you don’t find exclusions for corrosion and faulty workmanship,” Mysliwiec said.

Fallon’s ruling was based on Louisiana law, but Mysliwiec thinks it is likely that other judges across the country will be influenced by it.

“It’s so well written, and Judge Fallon has so much respect around the country that I think his opinion will have an impact beyond Louisiana,” Mysliwiec said.

In fact, a number of the defective Chinese drywall cases in federal courts around the country have already been consolidated in Judge Fallon’s court.

“What it means is that a builder may be more likely to obtain insurance funds to make the repairs to the extent that the culpable manufacturer (of the drywall) does not step up and make the repairs,” Mysliwiec said.

A major manufacturer of defective drywall, Knauf Plasterboard Tianjin, stepped up in October and agreed to a preliminary settlement and will remediate 300 homes built with 95% or more Knauf drywall.

Teresa Burney is a senior editor for BUILDER magazine.

This article originally appeared on Builder Online.