Chinese Drywall Damages Update

The Chinese drywall claims, litigation, and impacts continue and will continue for many years. This article summarizes the damages aspects of Chinese drywall in the United States. Much has been written about the various parties involved including the homeowners, developers, contractors, subcontractors, suppliers, manufacturers, and insurance companies in addition to the ongoing disputes and litigation regarding who will pay for the harm caused by the installation of the Chinese drywall. Estimates of the number of homes in the United States containing Chinese drywall have varied from approximately 35,000 to over 100,000. At this point in time some information is known about the amount of damages being claimed, with much more to be learned in the future. Many lawsuits have been filed to date, with only a small number of lawsuits having been decided by the courts.

Summary of Chinese Drywall Damages

Several courts have awarded various damages associated with the Chinese drywall installed in homes. In addition, other sources of information related to the costs of addressing the Chinese drywall issues have been made public. The costs associated with the Chinese drywall issues have varied depending on a number of factors including: the amount of Chinese drywall installed, whether the Chinese drywall is installed throughout a home or limited to a specific room or addition, and the size and location of the home, among others.

Based on two court awards in the multidistrict litigation ("MDL") in Louisiana for eight plaintiffs in total, the average cost to remove and replace the Chinese drywall, all other drywall, and the other damaged property, such as the electrical system and the copper piping, is estimated to be approximately $83 per square foot of the home. The cost estimates ranged from approximately $12 per square foot for one room in a basement of a home to $107 per square foot for an entire home. In addition to the removal and replacement of the drywall and other damaged material, additional claims for damages include inspection, repair and replacement of other personal property (e.g. appliances, computers, etc.), and temporary living expenses. These additional claims have averaged 13% of removal and replacement costs. The courts have also awarded damages for some of the plaintiffs for loss of income, loss of use and enjoyment, and diminution in property value, among others. The total damage awards have ranged from approximately $90,000 for a home where only 8 sheets of Chinese drywall were installed in one room in the basement to a $2.5 million jury award in Florida for a home with five bedrooms and five bathrooms. Excluding the jury award in Florida, the average total damages awarded to the eight plaintiffs in the multidistrict litigation in...