What to Do if You Installed or Supplied Chinese Drywall
Posted 11 months ago in Construction / Development. Jurisdiction: Federal
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Enough Chinese Drywall was imported into the United States to build 60,000 average-sized homes. Many now fear the drywall was contaminated, and to blame for the rapid corrosion of building elements and health concerns. What to do if your company supplied or installed Chinese Drywall? Read on.
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Determine Whether Your Company Installed or Supplied Chinese DrywallThe first question a builder or supplier needs to ask themselves is simple: Did we supply or install Chinese Drywall? In the event you haven't received a formal complaint, there are a few ways to get to the bottom of this question. First, you can review old contracts and work orders to determine where your drywall was originally published. If it came from a supplier such as Knauf or Interior / Exterior, and it was supplied to you between 2004 and 2006, you should be concerned. Second, you can review your warranty calls and call-backs for projects completed between 2004 and 2006. If a home or business is having recurring problems indicative of Chinese drywall (air conditioning unit failures, premature corrosion, etc.), these properties may have Chinese Drywall contamination. 2
Mitigate Your DamagesOnce you've determined that you have, or may have installed or supplied Chinese Drywall...your company may want to immediately take steps to mitigate your losses. In plain English, this means taking steps now to ensure that the damages related to the drywall don't get worse. What type of steps may these include? - If you have information that a home or business may be contaminated, you should alert the property owners. Many health experts are expressing concern that the contaminated drywall may cause health problems, and your company may increase its legal exposure by not informing someone of their exposure to these health risks. - If your customers are calling your company to repair the problems caused by Chinese Drywall (i.e. air conditioning failures, replacing the drywall, replacing building elements, etc.), your company may be obligated under warranty laws to fix it. Mitigating your damages may require that you fulfill your duties under your warranty. 3
Get PreparedIgnoring the problem will not make the problem go away. You should prepare yourself for a legal battle, and an economic battle with the duty to meet warranty obligations while trying to apportion blame to your suppliers and subcontractors / installers. How can you get prepared for these battles? -Put your insurance companies on notice. It's important that you put all of them on notice going back several years, as there will be some debate as to which policies are liable. Further, you want these insurance companies to be involved with the process, and to fulfill your obligations under the policy of informing them of the loss. - Get your documents together, such as contracts, master agreements with subcontractors, insurance policies, warranties and builders risk policies to understand, in the event of needing to make a legal or practical move, who is involved and how the parties are related to one another. 4
Get Counsel & Consider Legal OptionsTalk to an attorney as soon as possible about your company's liability exposure with respect to Chinese Drywall claims, and your obligations under construction warranties. You will want to bring your contracts, insurance policies, and other documentation to the attorney, and you will want an attorney with knowledge in the field of construction law. You and your attorney should consider your legal options with respect to these damages. For example, if you're required to repair problems related to your building warranty, you may want to file suit against your suppliers and installers. You will also want to get advice as to whether your insurance policy will cover any damages, and/or if your insurance company has the duty to appoint an attorney to represent you with respect to any claims made against you related to Chinese Drywall damages. |
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