Help for homeowners with Chinese Drywall (CDW) does not seem to be coming fast enough. And where there has been help such as local property tax breaks, the amounts are minimal compared to the cost of removal.  And yet there are some people out there who are betting that they can benefit from the Chinese Drywall situation.

Investors are no longer waiting on the sidelines. They are lining up when subdivisions with Chinese Drywall are identified. At this point it looks like the investors are primarily looking at vacant new construction properties owned by distressed builders or banks who have foreclosed on the properties. Bought cheaply enough these houses can be completely gutted to the bare walls and put back with new HVAC, plumbing, electrical and finishes. Then with the curse of Chinese Drywall hopefully removed the remediated houses can be resold for a substantial profit.

Are there downsides and risks associated with this process. Yes, there sure are. There is no agreed protocol for removing CDW. Done wrong the house can revert back to it’s distressed stage and begin to smell like rotten eggs again. In some cases the whole process of discoloration, pitting and deterioration of finishes, wires and HVAC can come back. No matter how profitable the project looks, there is no way to remediate it twice and still make money. Not only that, but if the problem returns after the property is sold to a new owner and the new owner has received full disclosure about the remediation, there are a whole new bundle of legal problems for the would be investor. A careful investor will therefore go overboard and leave no stone unturned in completing the remediation of each house.

While some remediators will save and clean at least some of the hard goods in the house, such as doors, cabinets and countertops. Others won’t even take that much risk. They remove everything and start from scratch with all new components except for the concrete, masonry and framing. Even these remaining members can be vacuumed with special HEPA filter vacuums and then sealed or encapsulated prior to re-installation of finishes. Some contractors will flush the house with forced fresh air or chlorine dioxide gas. And some contractors have started using ozone as a post removal treatment.

Of course the plan of attack is up to the owner and contractor. There are no official standards. At this time Judge Fallon in New Orleans has announced a recommended protocol for those house involved in litigation over CDW. His recommendations include power washing the inside of the structure. Most contractors that I have spoken to are leery about introducing water and therefore potentially mold into an already compromised indoor environment. But, these recommendations don’t apply to investors who are looking to turn a profit on the re sale of the property. Each investor is deciding what approach they are going to take one property at a time.

If you are planning to buy a house that has been remediated, I would go carefully over the protocol that was used and get as many assurances as possible that the problem has been solved. Also, if there are problems in the future what  is the remedy and who is going to be financially responsible.

Overall, I think the best strategy right now is for a potential buyer to work with an investor and remediator right from the beginning. Hire an independent 3rd party inspector to review the remediation plans. The inspector should visit the property while the remediation is underway and offer independent assessments that all of the work that is agreed upon is being done up to professional standards.

In a field where there are no agreed methods of disposal it may seem like an impossible criteria to meet. But there are similar situations in construction such as mold removal, asbestos abatement, radon and other chemical contamination situations. Inspectors who have extensive background in treating contaminated buildings will have a common sense approach to CDW removal as well. Everything should be clean. Workers should be protected. Permits should be obtained. Debris should be disposed of according to state and federal guidelines. Avoid cross contamination. Have a written work plan and daily reports showing how it was followed. Have photo documentation of the entire process.

Buyers should look for a clearance standard that they are comfortable with. In my last post I mentioned an air filtration test that can be sent to an independent laboratory for confirmation that there are no CDW compounds still in the air prior to re installation of new drywall. There is another company which is leaving drywall in place, chemically treating the structure and then testing the drywall for any residual traces of active CDW compounds. The more stringent the clearance protocol is the better for both the investor, the remediator and the eventual purchaser.

Of course, non of this helps the homeowner who bought a house and is now saddled with all of the CDW issues. Somewhat like the rest of the countries problems, it’s not Joe homeowner who is catching a break on this one.