Monday, May 17, 2010

Going “Business Naked” is Way Too Much Exposure

Many many months ago, homeowners started complaining of odors, metal being corroded, respiratory ailments, headaches, nose bleeds, etc. After many more months of investigations, it was determined that drywall produced in China was the likely culprit. Apparently Chinese produced drywall has a concentration of a sulfurous chemical, not found in US produced drywall and it was causing the problem. Anyway there has been lots of governmental wrangling over the issue for many more months. Many articles written about the problem and the passage of more time. Finally, today it was announced that rather than wait for lawsuits to be filed (because that is no fun and likely way more expensive) the Chinese drywall makers are agreeing to settle with large and small home builders in the US who in turn will likely settle with home owners and fix the “stinky” drywall problem.

But how do we know which homes got Chinese drywall? As you will recall, we had a major housing boom (a long, long time ago) and drywall was in hot demand. Builders were looking for a source for drywall from anywhere and anybody. So we bought from the Chinese and it happened to have a high sulfur content or something similar which caused a bunch of problems. Well, I guess it’s good we live in America where we regulate what goes into drywall, baby food, dog food, paint for kids toys, etc. But we are a global economy and get products from all over the world-like Chinese drywall for example. Anyway, once it went into homes, how do they know which home got Chinese drywall? Absent a complaint, how do we know which houses to investigate and which walls to replace?

RECORDS. RECORDS. RECORDS. According to the May 17, 2010 Wall Street Journal story covering this matter, “Builders will have to document that their problem drywall did indeed come from KPT (the Chinese drywall manufacturer)and show reasonable repair costs”. Ok, got it-have records to show they bought Chinese drywall, records where the drywall was installed and records to prove expenses. We live in a world where records allow business to happen. Without them we are “business naked”.

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