What is Chinese Drywall?
Chinese drywall refers to defective gypsum drywall imported primarily from China between 2001 and 2009, predominantly during the post-Hurricane Katrina construction boom. This drywall emits sulfur compounds (hydrogen sulfide and other gases) that cause a distinctive "rotten egg" odor, corrode copper wiring, blacken silver jewelry and copper pipes, and can cause respiratory irritation and other health symptoms in occupants.
How to identify it
Properties most at risk were built or renovated between 2001 and 2009, particularly in Florida, Louisiana, Virginia, and other Gulf Coast and Southeast states. Signs include: persistent sulfur odor, blackened copper wiring (especially visible on exposed AC coils and ground wires), corroded copper pipes, premature AC coil failure, and blackened silver items. Laboratory testing of drywall samples can confirm the presence of problematic Chinese-manufactured boards.
Remediation
Remediation requires removing all affected drywall, replacing corroded wiring and plumbing, replacing HVAC components, and reinstalling new drywall. This is effectively a full gut rehab of the interior. Costs range from $100,000-$250,000+ for a typical single-family home, making it one of the most expensive residential remediation issues.
Investment considerations
Properties with confirmed Chinese drywall are extremely difficult to sell or finance. Most lenders will not fund loans on affected properties. Insurance may not cover the remediation. However, some investors have profited by purchasing confirmed Chinese drywall homes at extreme discounts (sometimes under $50,000 for homes with $200,000+ post-remediation values), remediating completely, and selling the restored property.
Due diligence on any property built 2001-2009 in affected regions should include Chinese drywall screening. The cost of testing ($300-$800) is trivial compared to the potential remediation expense.