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April, 2004
 Time's
Almost Up on Dryvit EIFS
Time has almost run out on
claims for Dryvit EIFS (exterior insulted finish
systems). If your home was clad with Dryvit EIFS prior to June 5, 2002
you are likely to be eligible for benefits. The last day to file a claim in
order to be eligible is June 5, 2004. We strongly recommend you file as soon
as possible to avoid being excluded. Dryvit must send an inspector to
the property prior to June 5th in order to assess the extent of the repairs
necessary. Once the determination has been made, the homeowner pays for the
repairs to be performed, and will be reimbursed by Dryvit at a later date.
After the repairs are completed, a second inspection will be conducted to
ensure that the work has been done correctly. If up to par, a transferable
Moisture Free Warranty will be issued to provide a measure of preventive
maintenance against any further damage.
A settlement was reached after
more than two years of intensive litigation, and on April 8, 2002, it was
preliminarily approved by the Jefferson County Court, in Tennessee, where
the case was filed. As with all class actions, a "fairness hearing" needed
to be held to determine whether the terms of settlement were fair,
reasonable and adequate for the class members. On January 14, 2003, the
Court entered an Order and Judgment granting final approval of the
settlement. Here are some of the relevant provisions of that settlement:
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A Claims Forms Package may
be obtained through the website at
www.stuccosettlement.com,
or by calling the Claims Administrator at 1-800-320-9415. The Claims
Administrator should also be contacted if someone has a specific
question that cannot be answered after reviewing the Claims Form Package
or the website. Claims will be processed in the order received.
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After a claim is filed, it
is necessary to determine whether the home is clad with Dryvit EIFS.
Once that has been verified, an independent inspector will be sent out
to determine if repairs are necessary. It will take about 8 weeks to
obtain the inspection report. The inspectors do not determine the cost
of repair. Rather, they report their findings to Dryvit who then makes
that determination.
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The cost of repairs is
initially paid by the class member (i.e. the homeowner) but is subject
to reimbursement of at least 40% of the estimated repair costs.
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If repair or replacement is
determined to be necessary, in most cases the homeowner is not required
to have Dryvit EIFS installed again.
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Once repairs have occurred, there is a second inspection
to determine its adequacy. If the repairs are determined to be adequate,
a Moisture Free Warranty is issued to the homeowner. This warranty will
be issued even if it is determined that repairs are not necessary. The
warranty will pay for repairs to prevent excessive moisture intrusion
behind the cladding. The limits are $10,000 per year up to a total of
$30,000.
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Claim
Forms must be postmarked on or before June 5, 2004. The failure to
file a claim by the deadline will result in the homeowner's claims
against Dryvit being automatically released. This is a very short time
frame. Therefore, everyone whose home is clad with Dryvit today should
file a claim in order to obtain the free inspection - since it is the
inspection that will actually determine whether there is a problem. If a
home is clad in a synthetic stucco, but the owner does not know the name
of the manufacturer, it is still prudent to file a claim in order to
meet the June 5, 2004 deadline.
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Homeowners who have Dryvit
on their home as of June 5, 2002 are automatically members of the
settlement class. However, persons purchasing a home after June 5, 2002,
or installing a Dryvit product after that date are not members of the
settlement class, nor are they eligible for any benefits under the
settlement. For this reason, a buyer of a Dryvit clad home today should
ask their seller several questions: (1) Was the seller the owner of the
home on June 5, 2002? (2) Did the home have (in whole or in part) any
Dryvit cladding as of June 5, 2002? (3) Was a claim ever filed to
determine if the product was Dryvit and if there was damage? (4) Was the
damage, if any, repaired and reinspected? (5) If a claim was filed did
the seller obtain a Moisture Free Warranty?
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Homeowners are not eligible
for participation if they have already entered into a settlement
releasing claims against the company prior to June 5, 2002, or a
judgment has been entered for or against Dryvit in an EIFS claim. This
means that going forward, actually pursuing a claim against Dryvit may
be risky if there is a significant chance of losing, since one cannot go
back and take advantage of the settlement.
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The settlement applies to
one and two-family residential dwellings or townhomes in any State other
than North Carolina. The date of installation of the Dryvit must have
been after January 1, 1989.
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Persons (and Realtors®) in
the process of selling a home they believe is clad, in whole or in part,
by Dryvit should contact the Claims Administrator in order to have the
claim expedited.
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In order to verify whether a
claim was previously filed on a home, the current owner must write a
letter to the Claims Administrator requesting this information and
provide proof of current ownership. The address is: Stucco Settlement
Claims Administrator, PO Box 1626 Faribault, MN 55021-1626.
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The 3-year Moisture Free
Warranty is transferable. However, it is not clear whether the transfer
was automatic (i.e. whether the new owner of a home for which the
warranty had been issued automatically receives the benefit of the
warranty, or whether some affirmative transfer or assignment of warranty
language must be included in the sale documents.) Until this issue is
clarified, Realtors® would be well-advised to include a provision in the
Sale Agreement to the effect that all Dryvit claim information,
including all rights under the Moisture Free Warranty, will be
transferred and assigned to buyer upon closing.
Click here for more
information about Dryvit's claim process.
Click
here for more information about EIFS.
Contributed by Brian Lynch
Relocation Account Executive
U.S. Inspect, LLC
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