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Chinese Drywall Class Action Is Not The Way To Go

By Alan E. Tannenbaum

"A lot of the builders involved have been reluctant to do anything at all, with the exception of Lennar," Chaikin said. "They have just said, 'We're studying the issue and will let you know,' or they simply say nothing. If the builders won't cooperate we have recourse against them."

Besides Lennar, other builders that used Chinese drywall include Taylor Morrison, WCI, Meritage, Ryland, Standard Pacific, and Aubuchon, Chaikin said.

Lee County's Aubuchon Homes -- owned by State Rep. Gary Aubuchon, R-Cape Coral -- used Chinese drywall in the North Fort Myers house of Florida Lt. Gov. Jeff Kottkamp.

But not everyone is convinced class action is the way to go, including Sarasota attorney Alan Tannenbaum, who specializes in construction law.

"It puts everybody in a defensive posture, and you could be talking about a multi-year battle now, where, in the end, the individual owner might not really get that much compensation," he said. "The question should be, how do I ensure I get my house fixed correctly?"

A single homeowner trying to take on a builder alone also stands little chance of making progress, but there are other choices, Tannenbaum said. One of the best things homeowners can do is involve their lenders, who have a strong financial incentive to get the situation resolved, he said.

"Once you get your lender on board, and as a group when the neighborhood gets all of its lenders involved, suddenly the owners have more power," Tannenbaum said. "Most builders cannot do business without the banks, and therefore when the lenders talk, they listen."

Lenders also can defer mortgage payments, which can solve the most immediate problem facing some Chinese drywall victims: getting out of a defective home.

"They're desperate, because the smell is awful, they're maybe feeling sick all the time, the house is corroding," Tannenbaum said. "If they could afford to, they would be out of there in a second. But they can't afford to pay their mortgage and then rent."  

Full post as published by Florida Community Association Construction Law Blog on February 10, 2009 (boomark / email).