Thursday, November 12, 2009

Last week I had the opportunity to attend the Chinese Drywall Technical Symposium in Tampa. Here is a recap on the Environ report on construction materials and remediation protocol.

Jamie Poole, PhD, CIH is with Environ International Corporation. They were one of the first research laboratories called in to test what has become known as “reactive, corrosive or tainted” sheetrock. Dr. Poole made some important points based on their findings. First off he stressed that corrosive sheetrock will continue offgassing for many years and that installation did not trigger a onetime release of stored up gasses. He stated that the scale or residue found on copper coils is sulfur based and not a case of oxidation of metals and that “simply removing the source of the gas is insufficient.” Dr. Poole stated that the scale or residue will continue to corrode metals it is sitting on, even when the source of the gasses is removed.

Bob DeMott, PhD, led the group through a presentation on chemical analysis. Mr. DeMott is a toxicologist with Environ. He discussed some of the chemicals found in the off gassing of tainted sheetrock such as carbonyl sulfide and carbon disulfide and differentiated for the audience the differences between metals affected corrosively versus typical oxidation.

An extremely significant part of his talk was based on Environs research on other building materials that might be impacted by off gassing. He stated that the off gassing would not impact non-porous materials such as tile. For porous materials such as wood, the off gasses will enter it but it will not be stored in a reservoir type condition and the gasses will leave it. They tested wooden home components including plywood, pressure treated lumber and furring strips in 54 houses that were in some stage of renovation, remodeling or repair and found that the potential damage was not significant due to off gassing. They also tested concrete by attaching chambers to the sides of block houses. This is huge news for those people who were speculating that the entire house, frame and shell, would need to come down if the gasses weakened the structure.

Many of the contractors present were hoping for guidelines or a program to start remediation and were disappointed. However, there was practical advice given, particularly by Environ based on some research work they had done and presented as a poster.

Jamie Poole presented key considerations for the repair of structures with defective drywall. He said that work should only be done in unoccupied structures, items that had potential re-use should be removed and stored elsewhere, tile be covered and protected but that all carpet and padding should be removed and thrown away since they are “dust magnets” and that ALL drywall be removed.

In terms of ancillary building components, he suggested that insulation, batting, interior duct work and air handlers and all regular and low voltage wiring be removed. While you can clean the internal air handling systems and duct work, it is labor intensive so he suggested it just be removed and replaced. He did state that the air conditioning compressor unit could stay. He said that typically all copper, brass and chrome plumbing components are being removed.

After demolition, then a cleaning and venting process should be followed. For cleaning he recommended a gross cleaning, a pre cleaning and then HEPA vacuuming using industrial quality equipment and fine filters to try to get as much particulate dust as possible. He then suggested ventilating the house before starting to rebuild. Later on an audience member asked how long a house should be ventilated and it was discussed that it should be from 2 weeks to a month. It was also discussed that the “airing” out period could be accelerated by heating and ozone but to be cautious using ozone around organics, fine fabric and other sensitive materials.

He did give a couple of heads up comments to homeowners and their contractors including making sure that all waste lines were properly capped during demolition and that homeowners should understand that some oxidation of copper is natural.

He said that current evidence does not support cross contamination of wood and concrete. He cited their own research (which should be posted under posters) using a 54 home study of wood components. He also said that cement based products such as durorock, gypcrete flooring and concrete block would not be impacted. They had found no detection of sulfur damage in concrete block based on 80 chamber tests that they did.

Poole stated that some oxidation on metal framing could be observed and should be ordinarily expected. They looked at truss plates, nails, metal framing and hurricane straps and did not see any reason for concern.

In closing, he stated that repairs to homes could be effective and successfully done and that exotic procedures were not warranted. Based on their objective evaluations of wood and concrete homeowners should be “ok” with those components left in place. He felt that adding other products to the mix “to make sure” could actually be more harmful than good because there might be a problem with those items down the road.

For a full copy of my notes go to www.Assetadvisorsandmanagers.com

Thursday, October 29, 2009

CPSC Press Conference October 29 Recap

I was able to listen in to the press conference call held by the CPSC and related agencies today. It was a long call with participants from the CPSC, CDC, HUD, EPA and Florida DOH. Below is a recap of the conversation.

The bottom line, they still are looking for what they call the “nexus” or the pointer or marker to what is causing the defective sheetrock to continue to off gas corrosively. They have now received the results from the 50 home sampling and are analyzing them and plan to release additional findings next month.

They wanted the American public to know that while they continue to find the search for what is causing the off gassing perplexing, they are optimistic. They will continue to look for the scientific causes, which they feel is imperative, in order to find a remediation program that is specifically directed to clean up the cause of the corrosive off gassing.

They have found higher levels of strontium and sulfide in tainted drywall. They are looking at elevated volatile sulfur compounds as part of their continuing research but at this time they still cannot find what is causing the medical effects. They have noticed in houses that do not have air conditioning running that there is a higher than normal level of formaldehyde present. However, they are also quick to point out that when the houses are conditioned, what is being found in the air in relation to formaldehyde is typical to what is found in new homes and within tolerances of what is considered tolerable. (The presence of formaldehyde and other VOC’s in newer homes is not surprising due to more synthetic materials being used and higher energy efficiency that allows for less air leakage or fresh air intake in new homes with more efficient exchanges.) They are sympathetic to homeowners reporting health concerns and are continuing efforts to look at the problem in relation to medical impacts from a short and a long term point of view (acute and chronic).

HUD’s spokesperson stated that he urges homeowners to look at HUD resources for foreclosure counseling to seek help and that some communities with HUD grants might choose to allocate additional resources to lower and middle income homeowners through existing block grants if they are available and the community has high incidence of impact. Again, they also need the scientific analysis to continue until they can make further recommendations.

The CPSC is continuing to follow the chain of custody for drywall and have located warehouses where potentially defective sheetrock is still stored and notifying the suppliers of their awareness. If it is distributed the warehouses are required to notify the CPSC. That does not mean that the suppliers are prohibited from selling it; there is no code or act that would currently stop that. They did state that no imports were received this year so what is in the warehouses is stockpiled from previous years.

They stated that as far as they are concerned, all options for remediation, funding, recall, etc are still on the table and that there are ongoing discussions with the White House and with Congress. They also gave us a heads up that unless the manufacturers choose to issue the recall, then the CPSC can do it but only if they can make a case to do so. Hence again, the importance of continuing their scientific work.

They are also looking at this as being a synergistic problem in the drywall or in homes. Perhaps there is more than one factor causing the off gassing such as interaction of a couple of different compounds. If that is the case, there is not a simple way to determine and isolate what is causing the corrosive off gassing and it will take more time. It is important they try to isolate what is causing the corrosive off gassing because the remediation will need to be pointed directly to cleaning that up. They are hopeful that once they find that, then perhaps the current process of tearing everything out at high expense might not be needed, but they need to continue their analysis to say that for sure.

They were asked if the Chinese were going to pay for this and their response was hedged and directed back to Ms. Tennenbaum’s recent discussions with the Chinese. They stated that the Chinese are assisting with the technical aspects.

They have spent over 3.5 million in research and assured the journalists on the call that they are dedicated to continuing all efforts to try and help homeowners, some of whom they even named by name, to try and find out what is happening and help.

They also stressed that it is imperative they hear from ALL homeowners and for homeowners to please call them as well as their local departments of health.

The results of the testing and the press conference is posted in .pdf format under “release of current study” at: www.drywallresource.com or at http://www.cpsc.gov/info/drywall/index.html

The number to call them to report tainted sheetrock is 800-638-2772

You can view the results of the testing to date at the above website. I am sure, based on who was on the call and the questions they were asking, we will have extensive reporting and analysis of this in the media also.

I know some of you are going to be disappointed they were not forthcoming on what is causing the corrosive off gassing and they knew you would be also. They asked the members of the press to make sure that homeowners are aware that they are really working on this full force. However, they want to be certain they nail what is causing the corrosive off gassing because so much hangs upon them getting it right.

Wednesday, October 21, 2009

Mortgage Forbearance help for people with Chinese Drywall or tainted Drywall

Howard Ehrsam sent out a newsletter today on how he got a mortgage forbearance. This info might be of help to some of you or people you know who are trying to get help from their lenders. It looks like the key is getting through to the right people with the right documentation. I think we all knew this but he talks about how he did it and what paperwork he used.

If you are interested in seeing what he has to say, email him at Howard@chinesedrywallscreening.com

County Appraisers usually have cut off dates for negotiating reductions in taxable values for the year. If your County has passed that date and you did not already ask for a reduction based on the presence of tainted drywall, ask them if they will provide a letter for you to use to talk to your lender. They might be willing to do that. The letter could state that they have been adjusting value for homes similar to yours or in your neighborhood with tainted sheetrock and what the typical percentage of drop of value is. They might ask that you provide documentation to them first though proving you have it. You will also need that for the lender.

Also, take note on what Howard says about the impact of this on his credit record. This has been another common concern I have heard expressed on why people do not ask for help from their lender. What he says is good news for people who are concerned.

If you need mortgage assistance and dealing with your lender has been a negative experience to date, remember there are mortgage forbearance professionals and attorneys who deal in this daily and can get through quicker than you which makes their fee more affordable. If you hire one, make sure that they are reputable. The State Attorney General’s office has recently cracked down on this due to opportunists taking advantage of people with distressed properties. Ask the individual for references from other recent customers, a copy of any licenses they might have and check them out, especially if you are asked for money to go into any kind of escrow account.

Speaking of escrow accounts, they can also help you if, like Howard, you do it yourself. Talk to your attorney about setting one up to put your mortgage payments in if your lender will not talk to you unless you are in default. We do it in commercial management over rent and repair disputes.

Again, whatever you do, be shrewd and make sure the people helping you are trustworthy.

Wednesday, October 14, 2009

The FDIC has a stake in tainted drywall remediation

There is an article in the South Florida Business Journal this week about a partnership with Northwest Investments, LLC and Starwood Capital and some other groups. They have bought a significant portion of the Corus Portfolio and the FDIC is partnering with them. I think the thought is that by working with a group willing to pay more than what the assets are really worth it can help stabilize the South Florida real estate market because it helps establish a higher appraisel value in sales for the rest of the market. One of the problems in commercial real estate in the last year is that sales have virtually stopped because there were few transactions to establish value and the opportunity or "vulture" funds were hesitant to buy in case prices dropped even lower.

This is in effect a double bailout - it keeps prices relatively stable for all property owners (bailout 1) and it provides significant equity to an opportunity fund (bailout 2). I don't have a problem with that - I lived in Miami in the early 80's when the condo market crashed then and it was not a happy time.

However, apparently some of those units have tainted drywall. This means the FDIC now has a stake in making sure there is some sort of remediation protocol shortly. I wonder if they have realized that yet?

Saturday, October 10, 2009

Help needed now for people with "tainted" or Chinese Drywall

One of my homeowners I keep in contact with from Vrginia asked me yesterday to send over my thoughts on what people impacted by Chinese drywall need for a list they are compiling as a result of a meeting in Washington DC this past week.

Here were some of my thoughts plus more:

We need to find out ASAP what the identifiable markers are and if they are consistently found in tainted sheetrock so we can cut loose on remediation protocol that can certify a house as clean.

A certification has to be based on a measurable scientific basis by someone who has a license at risk. That is going to be determined by the scientists and researchers if they can find a common marker. If they cannot find a marker, then the Florida Drywall Coalition’s “smell” and HEPA vacuuming protocol or whatever Spiderman Mullohand and his group comes up with might be sufficient, at least for now. At least it is something and involves qualified people with licenses.

We need FEMA assistance or help for people who have medical impacts or children and need to get out temporarily. This could also be financial assistance through mortgage forbearance or rent assistance programs.

We are going to have to get help for homeowners if their homeowners insurance cancels; the lenders will demand that because of their cancellation clauses in their loan documents. We need the government to hold insurance companies accountable; just like we need financial oversight reform we also need it on all insurance. Whether it is health, home, auto or professional. It is unfair to charge exuberant rates and then refuse to pay, cancel or pull out just because things got unexpectedly riskier than you anticipated. If you are going to play, play fair.

We need lower thresholds on tax deductions to assist people on repair, especially if it is coming out of their pocket. We also need to widen the scope to include deductions for temporary places to live, etc.

Tuesday, October 6, 2009

chinese drywall remediation still problematic

A massive grab in intellectual property is taking place even while consumers still wait upon the Consumer Product Safety Commission and the inter-agency task force they are heading to announce their findings on what is causing defective sheetrock to off-gas corrosive gasses.

At the heart of the matter are two lines of thought, neither proven as definitive as of the date of this article.

The question seems to come down to whether you believe the nature of what is in Chinese or “tainted” drywall is a dry particulate similar to asbestos or if you think that it will continue to interact with other materials due to its gaseous nature long after removal of the primary offending materials.

What is at stake is millions of dollars and a national reputation for having “solved” the problem along with establishing the right protocol for remediation or removal of the defective sheetrock itself.

Chinese drywall, also increasingly being referred to as “reactive, tainted or defective” sheet rock, was brought into the United States between the years 2000 and 2008 during the recent construction boom. International competition for building supplies in both the commercial and residential sectors resulted in supply shortages in drywall, concrete and steel. Manufacturers of sheetrock went to the Chinese for help and it is estimated that in 2006 alone over 550,000 million pounds of drywall were imported into the United States from China.

It is important to note that not all Chinese drywall is tainted and that all drywall, regardless of place of manufacture, does off-gas to some extent. It is also important to state that tainted sheetrock has been found in homes as early as 2001 and that up until spring of this year it was still being stocked in warehouses for distribution.

Proponents of the two major theories are starting to create separate protocols for remediation and training. The irony, of course, is that until we do know exactly what is in tainted sheetrock, the best thing to do right now is absolutely nothing. That is a hard pill to swallow for homeowners and contractors ready to move now.

If you do choose to remediate, make sure you obtain a copy of the multi district litigation court’s procedure for removal and tagging of sheetrock. Unless you do it exactly as they proscribe you are in danger of having the manufacturers accuse you of “destroying” evidence and your case could be kicked out.

Do you think you might have tainted sheetrock? Here are some immediate “do’s”:

  • Contact a professional screener to verify and create a photographic report for your records as well as your builder, attorney, tax appraiser and insurance company. Do not use cheap air quality tests. The best examination to date remains visual based on the effects of the gas on the rest of the house.
  • Report to the local County Department of Health and report to the Consumer Product Safety Commission through their web site on line reporting form.
  • Hire an attorney willing to assist you in putting your homebuilder, insurance company and lender on notice.
  • Notify your contractor. Some builders are self insured and remediating. If your s offers to help, do not sign any releases without legal advice.
  • Contact your county tax appraiser. Some are offering assistance to impacted homeowners.
  • Do not remove or remediate without consulting your tax accountant as well as your attorney.
  • Make sure you only use a licensed general contractor who protects his staff with proper equipment during removal of tainted drywall ad cleanup. Right now it is better not to remediate until a protocol is issued based on scientific research produced or released through the CPSC.
  • Be wary of any gimmicks or silver bullets. While some sound promising, until we know what is causing the offgassing it is best to be wary of any claims by contractors or research firms.


To get a copy of my recently updated presentation “Chinese Drywall: Facts and Fears” visit www.centerworksretailseminars.com To get on my newsletter for home and property managers go to Assetadvisors.com or email me.

Friday, June 5, 2009




Commercial property managers sitting back right now and watching increasing reports and issues with Chinese drywall in the residential, apartment and condominium sectors of the real estate market and thinking they are “OK” because their industrial, office and retail properties have not been tainted are in danger of becoming complacent.

Typically commercial uses require 5/8” versus ½” sheetrock in construction. Chinese drywall to date has been found in ½”. However there are occasions when ½” sheetrock is specified or used in office and retail construction. Property managers should know how to identify when Chinese drywall is present so that if their tenant’s have issues within their space that could be related to Chinese drywall, it can be identified quicker.

Chinese drywall is gypsum board, also known as sheetrock or drywall, which was manufactured and brought into the United States between the years 2000 to 2006 when we were having huge shortfalls of availability of drywall due to the recent construction boom. Houses, apartments and condominiums suspected to have Chinese drywall have issues with air handler coils, corroded silver and chrome based metals and copper wiring and unexplained shortages or failures of electronic equipment. Some of these residences also have peculiar odors and there are reports of medical side effects including headaches, allergies, nose bleeds and upper respiratory issues.

Samples of sheetrock from houses suspected to have Chinese drywall have been found to have strontium sulfide and a higher percentage of organic compounds than what typically appears in regular sheetrock manufactured in the US or in other factories in China. When the sheetrock is subject to high humidity and heat, it starts producing an off gas with carbonyl sulfide and carbon disulfide which in turn reacts with silver and copper, causing pitting and corrosion. In some cases hydrogen sulfide has also been found present in the air which may account for why some houses also have strong odors of rotten eggs, matches or wet cardboard.

To date, Chinese drywall has been found in Florida, Louisiana, Mississippi, Virginia and the Carolinas. There has been speculation that this sheetrock will also be found in other high growth states as well as in overseas markets. It is showing up in the southeast first due to proximity to ports taking delivery of the sheetrock as well as the higher levels of dampness and humidity in the air.

Although the Chinese drywall currently seems limited to residential applications, there are occasions where ½” drywall can be used in commercial applications.

Architects might suggest ½” sheetrock if there are critical dimensions that have to be achieved in a room where literally every half inch is needed for the installation of equipment or racks. This recently happened with a commercial property developer who changed from 5/8” to ½” in a space sensitive electronics room. He is now noticing a peculiar odor typical to one of the side effects of Chinese drywall and suspects he has it.

Another situation that might occur is where retail or office tenants did their own build-outs and hired drywall contractors who substituted ½” board for 5/8” because of lack of availability of 5/8” board or because they just happened to have the ½” on hand.

Typically inspectors only check drywall installation on fire rated walls which require 5/8” thick sheetrock. If ½” was used or substituted on interior partition walls, they might not have noticed or thought anything of it. If they did and required a letter from the architect or a change in plans, then as long as the installation was good, most architects would not have been concerned. They certainly would not have known about Chinese drywall either.

The Palm Beach Post reported on April 24 that a Davie Legal Group reported during a town meeting on Chinese Drywall that he and his partners discovered that they have Chinese drywall in their offices after realizing that symptoms many homeowners were describing matched problems in their own building.

If a tenant starts to complain about odors or issues with electronics, then what should a property manager look for?

Howard Ehrsam, EI, CDP is the owner of Chinese Drywall Screening based in Port St Lucie, Florida. Howard has done over 200 visual inspections and recommends property managers look for the following indicators of potentially “tainted” Chinese drywall.

Look at coils on air handlers and check for the presence of “soot” on the coils. Also find out if the coils have had to be replaced already. In some residential cases there has been repeated failure of coils and the mechanical service contractor is the first to suspect there might be a problem.

Look at the electrical panel inside the store and see if there is evidence of “soot” or corrosion on the copper wires. Do not reach in and touch unless you are trained in handling electricity. Also check the copper tubing on the water heater if there is one in the space. If the space is “tainted” then the copper will probably be corroded or have soot on it also.

Ask if the tenant has had to replace their computer hard drives or if they are having problems with their fire alarms, thermostats, computer point of sales or any other small electronics.

Check to see if there are odors like sewer gas. This can get tricky for retail property managers because unoccupied spaces do tend to have sewer gas accumulation so if no one is regularly flushing the toilets or priming the traps then these smells can move into adjoining space.

If a landlord or property manager observes any of the first three during a preliminary inspection, then they should take the next step which is hire a trained Chinese drywall inspector to come in and look and verify or require the tenant to do so if they did the interior build-out and are still located in the space.

Landlord’s who have tenants sharing air handling or chilled water systems should take immediate action to isolate the space if Chinese drywall is found in order to protect other tenants and critical components of their own systems. If it is a stand alone unit with its own air handler, then whoever contracted with the builder who did the interior should contact them and put them on notice. They should also contact their attorney and ask for their assistance.

Builders and drywall contractors are as much of a victim of tainted drywall as the user is and though willing to help, will not know how to remediate the issue short of taking out all fixtures and cabinets and tearing out all sheetrock that can be identified as Chinese or tainted. If the Tenant has issues with odor then they will either have to get their furnishings and merchandise deodorized or they will have to toss them out. If the Landlord has available space, it might be advisable to temporarily move the tenant until the work is complete.

There are currently no formal protocols for remediation and any work someone does can be subject to additional remediation at a later date if required by the municipalities or governmental agencies that will be charged with overseeing any remediation in the future. If you decide to proceed on remediation with a contractor, do not sign off on accepting any responsibility for the space after they are done until you know local authorities will accept it as “clean”.




Below are two photos of the same air handler - the first shows a new coli installed in February of 2009 and the second shows the same coil on May 14, 2009.








Karen M. Scott, SCMD, CDP
Centerworks Retail
Kscott2784@msn.com

Friday, March 27, 2009

The Future of Shopping Centers in the United States and Abroad

Yes! There is one. Despite factors out there that currently might lead people to question the future viability of the industry.

Before the current credit crunch, the industry was already starting to see a shift from traditional malls to lifestyle and mixed use centers. Tenant's however, were starting to move back into denser urban centers instead of the suburban outlying areas they had favored in the past. Big boxes such as Home Depot and Target, who had traditionally avoided downtown areas because of the inability to build efficiently their prototypical stores, were starting to work with developers to create store formats that would work in denser areas, whether through multi-story buildings with parking garages or in retrofitting historic buildings and providing typical urban delivery services. We were starting to see this happen in New York City, Chicago and San Francisco.

They were following behind grocers and multiplex theaters who were also venturing back into core urban areas such as Publix in Miami and Whole Foods in Manhattan.

Retailers were already telling the developers that they wanted the benefit of higher density. When they start expanding again, we believe that those projects in denser downtown areas will be one of the first to start moving again, many with even greater support from the municipalities than before due to budget cuts and shortfalls from decreases in sales taxes and property taxes and the need to drive more employment centers back into downtown areas for commercial viability as well as to keep existing downtown residential areas viable and thriving.

Retailers and developers who are willing to be even more creative together and combine retail with entertainment, sports arenas and civic and cultural centers and transportation hubs will not only be bringing life back into downtown areas, but also capturing drastically under served retail markets whether it is in Detroit or Manhattan or Warsaw, Birmingham and New Delhi.