Business Notes HOUSING

Many proud new homeowners in the U.S. may be about to lose the roof over their heads -- literally. A fire-resistant plywood widely used in the roofs of nearly 1 million town houses during the past decade has turned out to have an unexpected vulnerability. Over just a few years, the heat of the sun triggers a chemical reaction that causes the wood to blacken, decay and eventually collapse. Result: a sudden epidemic of leaky buildings, expensive repairs and bitter lawsuits.

Makers and suppliers of FRT (fire retardant-treated) plywood, which was used mostly in houses east of the Mississippi, insist that the product is perfectly sound when properly installed. But homebuilders who used the wood during the 1980s housing boom are taking the manufacturers to court. In New Jersey alone, 45 lawsuits have been filed seeking damages that could amount to more than $130 million.