Last week, the Wall Street Journal reported that powerhouse builder Lennar Corp. has identified 400 homes in Florida with Chinese Drywall, and has set aside $39.8 million to repair the homes.
This is an enormous amount of money, and it should be a wake-up call to builders and homeowners who have yet to clash over the Chinese Drywall saga.
Would Lennar Co. really spend $39.8 million to repair a problem that wasn’t its fault? Or of which it didn’t have liability?
Indeed, time is continuing to tick without an onslaught of suits between builders and homeowners, but one has to believe that this is only a matter of time. Time, however, is on neither party’s side.
Homeowners are facing steadfast deadlines in any warranty claims made, or claims in redhibiation. If they wish to seek damages from any insurer (theirs or the home builders), they are likely facing quickly approaching deadlines.
Builders have deadlines themselves. Once they are sued by homeowners, builders will necessarily turn to their insurance companies and suppliers for reimbursement or indemnity. These suits also have impending statutes of limitations, and questions will loom as to whether the builder successfully mitigated its damages.
Lennar Corp. has been a leader among builders from the get-go on the Chinese Drywall problem.
As Chinese Drywall reports became widespread, Lennar Corp. had already begun examining the problem, replacing faulty drywall, relocating residents, and asserting claims against its subcontractors, suppliers and insurance policies.
Lennar Corp. has a lot of liability in this Chinese Drywall crisis, but in the end, they will likely have a lot of protection. That is due to their foresight and good management of the situtation.
Can the same be said for your company?