Chinese Drywall Remediation (CDW)

14 Replies

We expect to close in a couple weeks on our 2nd flip, a 2400 sqft 3/3 Townhome in Tampa. We purchased this via the MLS from the original owner of this 2009 built home for $115K. Yes 2009...conventional wisdom would say defective or Chinese drywall (CDW) installations ended in 2007. Not so.

We were out looking at property more like our first flip, the rennovation of a home in the Historic Uptown section of St Petersburg with our realtor.   Our agent mentioned this property, his listing while we were out.   After I got home, I called a couple of my contractor friends to get pricing on hanging new drywall.   Armed with that, some basic research on CDW, I created a complete remediation estimate and made the offer.   At this point...I hadn't even seen the property, all I had was my realtors description of the property and his estimate of resale value and my legwork so far.   This was something like the 10th transaction (most others were buy and hold) with this realtor and he was an old friend, but he very much a part of my trusted team.

The offer was accepted, and we closed about 20 days later.   The contractor started remediation the same day and we finished 10 weeks later.

I decided early on to follow the current Consumer Product Safety Commision guidelines for remediation.   They seem to be the most recently updated, and recent changes to them like removing the requirement to replace all wiring based on Sandia Labs analysis of the impact of CDW on building materials made sense in my opinion.     Earlier guidelines and still followed by some, came from a Federal Court in Louisana, suggesting far more remediation.   During the project, I met a couple other guys doing similar projects, one was doing board by board X-ray testing and replacing only those determined to be defective.   I'm not sold on that yet, so we replaced every board in the unit.   Absoluety every one.   We had hoped to salvage the wet board in the baths, but found tile layed on CDW and replaced those and the wet board too.   We found CDW everywhere, ceilings and supposed "firewalls" in the garage where there should have been 5/8 board, but wasn't.

This isn't a complicated rennovation, just time consuming.   You have to pull out everything, demo the drywall, hire a drywall crew to hang new drywall, then put everything back and paint.   Beyond that, all electrical outlets and switches must be replaced, tile flooring can be cleaned, but carpet has to be replaced.   Hire an insulation contractor to replace the attic insulation.   We had to retile the baths and elected to replace the air conditioning system.

Under contract now at 205K, after its all done, we should net about 35K.   Put a full estimate together before you tackle one of these, the new drywall cost was substantial at about 10K, but represents <25% of the total cost.  If we did these all the time, we might shave 5K off the cost and 2 weeks off the time, but more I think would be wishful thinking.

We did full disclosure during the sales process, even did a write up of the process with before, during and after pictures documenting the renovation.   It's a good time now in the market, but we had lots of showings and a contract in about 15 days.

Hope this helps anyone thinking about tackling one of these.   Will answer any questions I can.


What about the AC handler/coils?

The repairs are also considered a casualty loss on your taxes.

@Wayne Brooks ,  It still worked, but did a full replacement of the AC, new indoor fan/evaporator and new outside condenser.

@Sandra Gibson , It would have been deductible for the person I bought it from, if she had completed repairs.  I don't think we can deduct it, we purchased with full knowledge of the problem.   Tax wise, we are "dealers" on our flips and I don't think this will be deductible for us.   But if there is a tax expert that disagrees, please speak up!

* The value of my home has decreased due to the Chinese drywall. Can I have my property reassessed?Contact your county property appraiser for more information. For those in Florida, if the property is uninhabitable, then the

property appraiser must assess the value of the building at $0. See CS/CS HB 965 Real Property Assessment.

* Can I take a tax deduction?Revenue Procedure 2010-36 provides as follows: Individuals who pay to repair damage to their personal residences or
household appliances resulting from corrosive drywall may treat the amount paid as a casualty loss in the year of payment.
Taxpayers with pending claim (or intends to pursue reimbursement), a taxpayer may claim a loss for 75 percent of the
unreimbursed amount paid during the taxable year to repair damage to the taxpayer

@Bob Ebaugh Great post and very informative!  Nice to see people doing things the right way with full disclosure.  Much success to you!

@Sandra Gibson , This particular CDW example was a shame to have to demo.   You really could not detect the presence of CDW until you looked at the copper ground wiring or air conditioning evaporater coil, then it was clear, but really in now way impacted the livability of the unit.   No odor at all.   But the previous owner had to disclose it since she knew based on an inspection it had CDW.   And to sell at market, it has to be remediated, unless you find a really silly cash buyer.   But there is no way I believe the the property appraiser would have declared zero value for the building on this one.

I personally hope that for some of these milder cases they will determine the out gassing from the drywall stops at some point.   Makes sense, since the evidence is humidity or moisture is what reacts with the drywall, but at some point whatever the flawed content is in the drywall would be exhausted and stop reacting.   But some lab/chemist smarter than I am needs to prove this is more than an educated guess.   The young person buying this in 2009 did all the right things, large downpayment, current on her mortgage and had to write a 30K check to the bank to sell it to me...unlike many of the others in this complex that are in or have been foreclosed.  Because it's a mild problem, many are in denial until it comes time to sell.

Tax wise it was never my personal residence, so I don't think I can claim the tax relief.

The first sign is when the air-conditioning  and the appliances quit working.  During the first class action lawsuit involving Knauf Tianjin Co, the tenant  had a right to damages.

That's correct, but best I can tell now, anyone not already part of one of the lawsuits is SOL.   The person we purchased from looked around with a lawyer, the developer was out of business and the class actions closed to adding new litigants.

I am looking at purchasing a CDW home to re mediate. So I have been doing a lot of research on the subject. Here is the most in depth and most recent report done on the subject by:


Agency for Toxic Substances and Disease Registry

Division of Community Health Investigations

Atlanta, Georgia 30333

It states that the worst drywall was shipped in in 2005-2006 from china. But after doing lab tests (there are charts and explanations in the report), they found that in just a 1 yr period the off gassing was 90% less than the prior year. Which led them to believe that the only time this drywall was at toxic levels was within the 1st few years from manufacturing. It also says that chronic HQ was  approximately 25 times lower (329/13) after a 1-year time frame (2009 to 2010). 

The testing was completed in 2010. I would like some other people opinions on this report. After reading it I personally wouldn't have any worries about living in a CDW home today. If the levels were 90% less in 2010 then they should be almost non existent now.

Disagree? Let me know and why. Thanks

Took me a couple days to have time to wade through that report.   Very interesting evidence of what I surmised a couple posts up...that eventually whatever causes the out gassing runs out of steam over time.  So from a practical sense, I agree with you that it's probably OK now.   I'd probably want to do some air quality testing to determine present levels of contaminants, if any.

That said though, the official guidance in the linked report remains to follow the CPSC remediation standards.   That requires drywall replacement.   So until the remediation standard is changed, I think an unremediated property will have a much lower market value.

Being that some of you have experience with CDW, I have found a lot of different types of inspections out there. The X-Ray gun some companies use sounds interesting because they don't have to destroy anything and they can mark exactly which panels are bad. I have read some bad reports on this technology though, that it is not the most reliable way to test.

I am hoping someone can recommend the best bang for the buck while still being accurate testing that they have had experience with. If you have used the X-Ray method and everything was good, I would love to hear about that as well.


Strictly IMHO, the X-Ray (XRF) testing for strontium leaves a lot to be desired.  However I've observed remediation via that protocol that sells.   I think the guys that do the testing generally come back and certify the property free of CDW for resale.

The issue I have is the one we did had CDW, defined as made in China  (during the timeframe in question, throughout the entire unit).  The literature doesn't support the conclusive analysis via the strontium link tested for.   YMMV.

That said, I think the whole problem is overstated.   As mentioned above in this thread, I think the problem of emissions Is greatly reduced over time.   But that won't help you sell a tarnished property today!

that's why newly built high rises in China stay empty for about a year.  they looked creepy just standing empty everywhere. 

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