* Can I still maintain a claim if I sell my home?  Possibly, however, the nature and/or amount of your damages may
differ.    If there is a settlement and it entails the remediation of your home, obviously that cannot be accomplished once the  
house is sold.     Please discuss this with your attorney.   It is important to consult an attorney before you sign a contract to
sell your home as you may want to have an addendum to the purchase contract to address the following:  (1) the seller's
ability to
preserve evidence prior to the sale;  (2) the seller's retention of the rights to any settlement proceeds; and (3) the
buyer's release of all parties in the distribution chain pertaining to the presence of Chinese drywall in your home.


*  Am I required to pay my mortgage if I cannot live in my home? Many homeowners are faced with the decision
whether to pay their mortgage because they cannot afford to pay the mortgage on a home that is uninhabitable and pay
rent for alternate housing.    Some lenders will provide homeowners with a forbearance agreement or moratorium which,
simply stated, is a temporary freeze on your mortgage.   However, the missed payments must generally be paid back.

A forbearance may not be advisable for everyone.  Ask your lender what will happen at the end of the forbearance.  A
forbearance could negatively affect your credit so please check with your lender and get any agreement in writing.   
Additionally, some lenders are requiring homeowners to affirm the balance of the loan (even if incorrect) or to waive certain
defenses to protect the lender in the event of a foreclosure.  Homeowners are encouraged to contact an attorney to discuss
their options.  

To contact Fannie Mae, call (800) 732-6643 and select option 3.  Ask to speak to someone about Fannie Mae’s “unusual
hardships policy for homeowners with problem drywall.”
Click here to review the agency's new national policy.  Click here
for Circular for Veteran's Benefit Administration.  Note, mortgages are frequently sold.  Click here to find out if you have a
Fannie Mae or Freddie Mac


* Can I still maintain a claim if my home is being foreclosed?    You can still maintain a claim, although again the
nature and/or amount of your damages may differ.  Please consult your attorney and discuss
preservation of evidence.    

* Can I walk away from my house without any further liability? Not unless your lender agrees.   Without an
agreement from your lender, the lender still has the right to sue you for the deficiency.     

* Can I go ahead and remediate now and still maintain a claim?  Please consult your attorney first as this could
affect your recovery, particularly if you have Knauf drywall.    Moreover, you are required to preserve evidence in
accordance with
Judge Fallon's Order.   It is not enough to have an inspection report or merely save a few pieces of
drywall.  Your attorney may also want to put your builder and others on notice before you begin remediation.  


* 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


* What should I do if I am purchasing a home built between 2001 and the present? In addition to a Chinese
Drywall Disclosure form (which is now required in some states) and a thorough home inspection by someone who has
experience with Chinese drywall, you may want to ask the seller to identify all remodeling/remediation work performed,
along with prior A/C repairs, including the date and nature of the repairs.   You should be especially cautious if you are
purchasing a foreclosed home because the lender may have no knowledge of the condition of the property and in some
instances, you may not be able to inspect the home prior to purchase.

Check with the property appraiser (usually available online) to see if the property has been reassessed due to Chinese
drywall.   A significantly reduced assessment may be a red flag.

* 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’s personal residence and household
appliances that resulted from corrosive drywall.  Please consult an accountant.


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Allison Grant, P.A., 14 Southeast 4th Street, Boca Raton, florida  33432 730 S. Federal Highway, Lake Worth,  Florida 33460 | (561) 994-9646.  Admitted to the Florida Bar
HOME      RECENT NEWS      PHOTO GALLERY      LEGAL CORNER      HEALTH & SCIENCE      REMEDIATION       CONTACT US
THE LEGAL CORNER
by Allison Grant, Esq.
730 S. Federal Highway
Lake Worth, Florida  33460
agrant@allisongrantpa.com
561.994.9646
The following is for general informational purposes only and does not constitute legal
advice.  Please contact your attorney for information concerning your particular case.
welcome to chinesedrywall.com
The first website dedicated to educating the public about Chinese drywall
IS THERE INSURANCE COVERAGE?
KNAUF PILOT PROGRAM

In October 2010, KPT entered into an agreement wherein it agreed to repair approximately 300 eligible
homes.   Moss & Associates was hired as the project manager.  A strict remediation protocol approved by
the Court requires, among other things, that all the drywall be removed, along with the wiring, the air-
conditioning system and other components - a procedure that will effectively gut the interiors of the
affected properties.    In addition, KPT has agreed to pay homeowners $8.50 per sq. ft. to compensate
them for moving, storage, temporary housing and damage to personal property.

Since the announcement of this settlement, KPT has added hundreds of homes to the program.  


BANNER SUPPLY SETTLEMENT

In July 2011, a preliminary settlement with Banner Supply in the amount of $55 million was announced.   
Although the Banner settlement alone will not provide enough money for remediation, this settlement is
believed to be only part of the puzzle which will lead to a global resolution for homeowners.   This
settlement, if approved, would apply to all homeowners whose drywall was supplied by Banner regardless
of the brand of drywall in their home.  The settlement has been preliminarily approved.   The Court has
appointed an allocation committee to distribute the insurance proceeds.    


KNAUF GLOBAL SETTLEMENT

On January 10, 2012, Judge Fallon entered an Order preliminarily approving the Knauf Global
Settlement.   See full proposed settlement agreement.

A summary of the settlement benefits is contained in the Notice of Pendency and Proposed Settlement of
Knauf Class Action (see pages 5-10) and is also set forth, in part, below.  This information is NOT a
substitute for legal counsel nor is it intended to provide you with any legal advice
.  Please contact your
own attorney.

The Settlement establishes two funds – a “Remediation Fund” (which is uncapped) and an “Other Loss
Fund” ($30 million) for the benefit of a class consisting of all persons or entities who, as of December 9,
2011, filed a lawsuit asserting claims arising from or relating to Knauf Plasterboard Tianjin ("KPT")
Chinese  Drywall.

Residential Owners and Commercial Owners have three options:

(1) they may elect to have their properties completely remediated; (2) they may hire a contractor (which
must be approved) and payments will be made directly to the contractor; or (3) they may receive a
discounted cash-out payment subject to certain disclosure requirements and, if applicable, a release from
their lender.   For mixed properties (i.e., KPT and another brand of Chinese drywall), owners may elect
either options 2 or 3 above, however, payment will be discounted by multiplying the payment by the
percentage of KPT drywall.  

Under Options 1 and 2, residential owners will also receive a lump sum payment of $8.50 (for homes
under 3,500 sq. ft) or $10.00 per sq. ft.  (for homes over 3,500 sq. ft).   These monies are intended to
compensate owners for damage to personal property, moving, storage and temporary housing
expenses.   

In addition, Owners with provable economic losses resulting from foreclosures and short sales caused by
the presence of KPT drywall may be eligible for compensation under the Other Loss Fund.   

The Other Loss Fund will also provide a mechanism for resolving personal injury claims.  


BUILDER, INSTALLER AND SUPPLIER SETTLEMENT

On May 31, 2012, the Court granted preliminary approval of a Global Settlement involving participating
builders, installers and  suppliers.  See list of participating Defendants.  The  amount of the settlement per
claimant has not yet been  determined.   The Court will establish a procedure for  allocation of the
settlement funds.
  

FAIRNESS HEARING FOR ALL PENDING SETTLEMENTS IN THE MDL

A Fairness Hearing with respect to the INEX, Banner, L&W, Knauf and global settlements will be held on
November 13, 2012.   The deadline for objections and opt outs is September 28, 2012.   
See Order.
JUDGE FALLON DENIES CLAIMS UNDER OWNERS' INSURANCE POLICIES

Judge Eldon Fallon ruled that homeowner’s insurance policies do not provide coverage to victims of
Chinese drywall for damage to their home or personal property or additional living expenses.

While Judge Fallon rules that policy exclusions for latent defects and pollution
do not apply (which is very
significant in interpreting commercial general liability policies), Fallon went on to hold that Chinese
drywall is a faulty material and, therefore is properly excluded.   The corrosion exclusion also applies,
however, if corrosion causes fire, it may be covered.  However, a Hillsborough County Judge recently
ruled that Chinese drywall is a covered loss under an "all-risk" homeowner's insurance policy.   
CLICK
HERE FOR RULING.
WHAT IS THE MULTI-DISTRICT LITIGATION (“MDL”)?

MDL is a procedure to consolidate similar cases for the purpose of, among other
things, conserving resources and preventing inconsistent rulings in different courts.  
All such cases are assigned to a judge in one federal district court.  

In June 2009, all federal lawsuits filed around the country against foreign
manufacturers of Chinese drywall were ordered to be transferred to the United States
District Court for the Eastern District of Louisiana, where Judge Eldon Fallon will
preside over discovery and pre-trial hearings.   
Click here for current developments.  

In addition to suing the foreign manufacturer, claimants (which are primarily
homeowners, but some are commercial property owners) can also name U.S.
builders, installers, suppliers and distributors as defendants in the MDL.   Note, some
attorneys are also bringing separate actions in state court.
FREQUENTLY ASKED QUESTIONS
The foregoing does not constitute legal advice.   
Please consult an attorney to discuss your particular case/situation.
THE OMNIBUS COMPLAINTS

On December 9, 2009, the Plaintiffs Steering Committee filed an Omnibus Complaint
("Omni I") against Knauf Plasterboard Tianjin ("KPT") in the MDL.    The Plaintiffs
Steering Committee has since filed complaints against other foreign manufacturers.

BELLWETHER TRIALS IN THE MDL

Two bellwether trials were heard by Judge Fallon.  These were non-jury trials that
were limited to property damage and not personal injuries.  The purpose of these
types of trials are to address representative samples of cases with regard to
geography, distinctive facts and certain legal issues with the goal of flushing out or
narrowing issues that could potentially apply to everyone.  

GERMANO V. TAISHAN

The first Chinese drywall began on February 19, 2010.   This trial involved seven
Virginia families and Taishan Gypsum, who did not respond to the Complaint filed
against it so a default judgment was entered.   Another manufacturer, Knauf,
intervened in the lawsuit and defended on behalf of Taishan.  On the eve of trial,
however, Knauf withdrew from the case after an adverse ruling by Judge Fallon in
which he ruled that the proposed fix by Knauf was experimental.  

On April 8, 2010,  U.S. District Judge Eldon Fallon awarded the seven families $2.6
million in damages for homes ruined by Chinese drywall.   This ruling only addresses
property damage.  
 CLICK HERE FOR COMPLETE RULING   

Unlike interim guidance issued by the Consumer Protection Safety Commission
(CPSC) in April 2010 which addressed safety items only, Judge Fallon’s decision sets
forth a very detailed protocol for what needs to be done in order to remediate a home
with Chinese drywall
.  

In May, a Final Judgment was entered against Taishan (which is owned in part by the
Chinese government).  Taishan has appealed the decision.   The appellate court
stayed the appeal so that Judge Fallon could rule on Taishan's jurisdictional
challenges.   A hearing was held on June 29, 2012.    The Court has not yet ruled.

HERNANDEZ V. KNAUF

This was the second Chinese drywall trial.  Unlike the Germano case, the Hernandez
case was vigorously defended by Knauf.  On April 27, 2010, Judge Fallon ordered
Knauf to pay a Louisiana family $164,049.64.  Remediation costs were $136,940.46
or $81 per square foot.  The protocol was very similar to the Germano case, and in
addition, damages were awarded for personal property, recurring alternate living
expenses, and attorney's fees (to be determined).   On May 10th, a Final Judgment
was entered.   
Click here for ruling.    Knauf appealed the Final Judgment, but later
agreed to a proposed settlement (discussed below).
SETTLEMENTS APPROVED.

On November 13, 2012, a Fairness Hearing was held in the MDL regarding five related settlements which
are collectively valued at approximately 1.1 billion dollars.  Plaintiffs' and Defendants' attorneys presented
evidence and argued that the settlements are fair, reasonable and adequate, and that the settlements
were negotiated in good faith.  

On February 7, 2013, Judge Fallon agreed and entered an
Order (which contains an excellent history of
the litigation) granting final approval of the INEX, Banner Knauf, L&W and Global Settlements.  
See list of
Participating Defendants and Participating Insurers.   Press Release.

See attached Banner and Global Settlement Allocation Plans.   The amount of recovery per claimant will
be determined after claims have been submitted and evaluated.   Details regarding the claims process for
the above settlements to follow when announced.

A claims process for the "Other Loss Fund" will also be established for homeowners with Knauf drywall.  
The Other Loss Fund provides a mechanism for resolving very specific claims of economic losses (such as
foreclosures and short sales) and personal injuries.   
See Third Amended Knauf Settlement Agreement.

Litigation against non-participating defendants and other drywall manufacturers continues.