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Lee County homes suffering from Chinese drywall on the rise

Apr. 27, 2013
Chinese drywall Removal
Chinese drywall Removal: Chinese drywall is being removed from a Cape Coral home. The process, which involves gutting the home and rebuilding the interior, will take three months. Video by Sarah Coward.
Carlos Hernandez, right, removes metal electrical outlets and wiring Thursday from a Cape Coral home tainted by Chinese drywall. / Sarah Coward/
Manuel Galabiaz removes a drywall-backed bathroom mirror, destined for the trash, from a Cape Coral home Thursday. / Sarah Coward/

Two simple Chinese drywall tests

Homeowners can do tests on their own to indicate presence of Chinese drywall.

1. Take a piece of copper wire and hang it on the return of the air conditioner, where the air that circulates through your house is drawn back into the unit. Wait about two weeks. If the wire turns black, that indicates possibility of defective drywall.
2. Place a piece of copper tubing in a mason jar along with a piece of drywall from an area in your home where you suspect the presence of defective drywall. Close the lid and place it in an area where it is exposed to heat and humidity, such as a garage or lanai. Wait about two weeks and see if the copper turns black.

Source: Zdenek “Zed” Hejzlar, Engineering Systems Inc., Fort Myers

Carlos Hernandez pulls Chinese drywall from the beams of a Cape Coral home Thursday. / Sarah Coward/
Hernandez stands in a pile of drywall and drywall-affected debris pulled from a Cape Coral home. / Sarah Coward/
Carlos Hernandez removes nails from the slab of a Chinese drywall-affected home in Cape Coral Thursday. / Sarah Coward/The News-Press


Interactive graphic: Chinese drywall by the numbers

Chinese drywall is claiming a second wave of victims.

The drywall, imported mostly between 2004-08, smells foul and emits sulfur compounds that corrode air conditioning coils, electrical wiring, metal appliances, electronics, jewelry and plumbing fixtures. Residents of homes with the drywall complain of health issues from nosebleeds to respiratory problems.

Nearly 1,900 homeowners in Lee County have asked for property tax relief because their homes have been tainted by Chinese drywall, but the scope is wider because many owners don’t disclose the contamination.

“I think there is probably twice that many,” said Bruce Basiliere, a field analyst who handles all drywall claims for the property appraiser’s office. “I say that because we come across people who do not notify us.” Some of the homes may have been purchased with the intention to flip them, he said. That means buying the house at a discount and then quickly selling, or “flipping” it, for a profit.

Other scenarios detailed by real estate attorneys, home inspectors, builders and Realtors include homes sold “as is” that are suspected of having defective drywall, but purposely not proven by inspection; and homes repaired cosmetically and sold as remediated, but contamination remains.

“It’s the old saying, ‘Buyer beware,’ and it’s so true,” Basiliere said

Jim Pascale, owner of JJ Staten homes in Cape Coral, puts it another way. “We’re in the old Wild West. There are no regulations. Anybody can do whatever they want. It’s sick.”

Florida has the highest number of drywall homes. Lee is the focal point of the problem.

A database from the property appraiser’s office, published for the first time today on, lists the homes whose owners have asked for relief so property taxes on their homes can be reduced to zero. The county has provided this relief to homes that qualify since 2009. Since that time, the number of homes has grown from about 1,500 to 1,900.

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An updated list comes out in May.

In comparison, Collier County had only about 140-150 homes reported as having defective drywall, said Bruce Stephens, administrator of real estate appraisal for the Collier property appraiser’s office.“We’ve been very fortunate.”

Some government agencies have put out guidelines on how to detect drywall, but there are no laws or mandatory regulations for inspecting a drywall home or fixing one. Some inspectors lack training to detect defective drywall, and some contractors fix a home as they see fit.

However, even in an ‘as is” sale, under Florida law, a seller has an obligation to disclose anything that affects the value of the property that is not readily observable, said Christopher Shields, a partner with the Pavese Law Firm and Florida Bar Board certified real estate attorney.

But a seller, such as a bank that foreclosed on a property, can make a strategic decision not to become aware of any deficiencies, he said. There is no law requiring the seller to do an inspection. If a deficiency surfaces, such as a roof leak or Chinese drywall, it is up to the buyer to prove the seller knew of these defects and yet failed to disclose them to the buyer. That can be difficult for a buyer to prove after the fact.

“It is incumbent upon the buyer to thoroughly protect themselves,” with language in the contract and inspecting the property, Shields said. “A buyer who purchases a piece of property without hiring a qualified inspector to perform a thorough inspection is extremely foolish.”

Deceptive practices

The county database shows 2006 was the pinnacle year for homes constructed with Chinese drywall reported to the property appraiser, a total of 1,226. The top five ZIP codes with most problem drywall homes include three from Cape Coral, which make up about 32 percent of the total.

Public records sought from the property appraiser’s office tell the stories of people who believed they were purchasing a defective drywall-free home.

Wing and Maggie Chi bought a Lehigh Acres home in December 2009. They were told the home once had Chinese drywall but it had been fixed. The couple was given an inspection report by the seller, saying the drywall had been removed.

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But four years later, air conditioning needed repair and the serviceman told them the problem indicated Chinese drywall. “We ended up having a lot of corroded wires in the AC unit,” said the couple’s daughter, Jennifer.

They called in a firm specializing in drywall inspection. The report showed the drywall remained behind the kitchen cabinets, bathroom mirrors, toilets, ceiling lighting and garage walls surrounding the air unit, the inspection report says.

The home was remediated a second time. The family owns the residence but resides near Albany, N.Y.

An April 14 letter to Basiliere from Maria Hartzell in Cape Coral tells of purchasing a house in 2011 that had been built in 2006, only to find it had Chinese drywall. “Our son and I had to move out last year because of health issues (respiratory), my husband is still living in the house so we will not lose our homestead exemption, even though he too has respiratory problems from the gases emitted from the Chinese drywall. In two years we have had to replace most of our electronics, air conditioner, air handler and our appliances, because they are corroded from these gases.”

Remediating the house will be equal to, or more than, the purchase price of the home, she wrote. “We did not know that the house has Chinese/defective drywall when we bought it.” They paid $79,000 for the house. Hartzell asked for relief from their 2012 property tax.

The potential for fraud is huge, said Allison Grant, an attorney who represents about 1,000 drywall clients across the state, including about 300 in Southwest Florida. “The problem is the people who are concealing the Chinese drywall. What they do, and I’ve seen this firsthand, they do just enough to pass the inspection.”

Sellers will clean corrosion and hide other evidence of the drywall’s effects, she said. An inspector who is not trained to spot it will be fooled. If a home was built in 2006, it shouldn’t have to be remodeled, with new appliances and air conditioner, she said. Buyers must do their due diligence and research public records, to see if the owner filed a lawsuit because of drywall, see if tax relief was given, or pay for a drywall inspection, she said.

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Brandon Richardson, supervising inspector for Kross Inspections of Fort Myers and Cape Coral, said many people are coming down from up North to buy or rent homes and are not aware of the drywall problem and its impacts. Sellers cut corners in remediating a home in their haste to sell a property, he said. They do the bare minimum, just removing the drywall and not the insulation or duct work. The odor and symptoms will come back, he said. Or it comes down to plumbing, electrical and AC components, where signs of corrosion exist, he said.

He’s had clients that don’t tell him a home has been remediated and he will find signs of it, or the client does a partial remediation and says the home was completely gutted. “And of course there will be no documentation for it, no report, no photos,” he said.

The company also has done a lot of second opinions. Many places fail not because they have drywall, but you can’t prove that they don’t have drywall, he said. “You have to remember that when you do remediations, no one is looking.” No proof, no diagnosis.

A third-generation builder, Pascale started remediating drywall houses five years ago. He said his motivation was seeing friends and their families suffer from the financial and physical effects of having the drywall.

The average amount for fixing a drywall home is about $100,000. Pascale’s company only uses the remediation protocol put forth by federal Judge Eldon Fallon, who presides over about 10,000 drywall cases in multi-district litigation in New Orleans. Fallon’s is considered the the strictest and most comprehensive method.

The Consumer Product Safety Commission has a less stringent protocol. For example, it doesn’t require removal of the home’s wiring.

Pascale doesn’t believe the safety commission’s guidelines are good enough. He said he pulled out of bidding for a $1.3 million job to fix 53 condo units in Punta Gorda because the job called for using the commission guidelines. There isn’t enough money in the world if something happens down the road, such as a fire, he said.

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Neither Fallon’s nor the safety commission’s protocol is mandatory.

Right to know

Donna Stout, a Realtor for 27 years, said she believes agents have an ethical obligation to inform the buyer.

“My feeling is that as a Realtor we are supposed to disclose anything that is a material fact that will affect somebody’s purchase of a home,” Stout said. “Having defective drywall or having been remediated, would that not be a material fact?”

Stout, a broker associate with Miloff Aubuchon Realty Group, also is president-elect of the Cape Coral Association of Realtors. She emphasized she was giving her own opinion, not speaking on behalf of the association.

When a Realtor lists a home in MLS, there is no category that says it has or hasn’t been remediated for defective drywall, she said.

“Many agents feel because it has been remediated, and there is no current evidence of defective drywall, they don’t have to disclose it,” Stout said. “I have a problem with that.”

To her, it’s a red flag when a house built in 2006 is listed as remodeled. If a prospective buyer is interested, she will check the property on tax records, and websites to find what permits have been pulled, then follow up to see if there may have been a remediation.

Others avoid the controversy. Douglas J. Hannah, managing director of Silverleaf Advisors LLC, said the Miami private equity firm has bought up about $30 million in distressed real estate in Southwest Florida the last three years. They were aware of the problems and implications associated with Chinese drywall, he said.

“If it had Chinese drywall, you just stayed away. You didn’t buy it,” he said. “There was no price tag on it that was worth that type of risk.”

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