(a) Warranty required. As a condition to being registered under this Chapter, a new home builder and a new home seller must give a consumer a written warranty that provides the warranty coverage required by this Chapter no later than the execution of the contract to sell the home.
(b) Liability. The new home builder and new home seller must honor the terms of the warranty and cannot discharge this warranty obligation by providing a third-party new home warranty plan to the homeowner.
(c) Performance standards.
(1) The warranty must include minimum performance standards for the construction and quality of the components of a new home.
(2) If specific minimum performance standards are not provided, industry standards for good building practice determine compliance with the new home warranty.
(d) Duration of warranty. The new home builder and the new home seller must warrant to the homeowner, and all subsequent homeowners during the warranty period, that:
(1) For 1 year, starting on the warranty date, the new home must be free from any defect in materials or workmanship as defined in the minimum performance standards.
(2) For 2 years, starting on the warranty date, the new home must be free from any defect in the electrical, plumbing, heating, cooling, ventilating, and mechanical systems.
(3) For 5 years, starting on the warranty date, the new home must be free from any major structural defect.
(e) Exclusions. The written warranty may exclude:
(1) damage to real property which is not part of the home covered by the warranty and which is not included in the purchase price of the home;
(2) bodily injury or damage to personal property;
(3) any defect in, or caused by, materials or work supplied by anyone other than the builder, or its employees, agents, or subcontractors;
(4) any loss or damage which the homeowner has not taken timely action to minimize; and
(5) any additional exclusions permitted by Regulation.
(f) Statutory warranties. The statutory warranties required by this Chapter are in addition to all other implied or express warranties imposed by law or agreement. Each new home builder or new home seller must disclose the information required by, and otherwise comply with, Sections 10-601 through 10-610 of the Real Property Article of the Maryland Code.
(g) Financial security.
(1) Before entering into a contract to sell or build a new home, a new home builder or a new home seller must:
(A) inform the consumer in writing whether any bond, insurance, or other financial security is responsible for or guarantees the builder’s performance under the warranty required by this Chapter;
(B) provide proof of any such bond, insurance, or security to any buyer on request; and
(C) include the following notice in the sales contract immediately before the disclosure required by subparagraph (A):
NOTICE TO BUYER
Montgomery County law does not require this builder to furnish any bond, insurance, or other financial security to guarantee the builder’s performance of its warranty obligations. If a builder has promised you any other bond, insurance, or security to guarantee the performance of its warranty obligations, that bond, insurance, or security must be listed here:
(2) The buyer must acknowledge in writing that the buyer has read and understands the notice required under paragraph (1)(C).
(3) A new home builder or new home seller may be required to post a bond if the Director determines that the builder constructed and sold a home without being registered. (2019 L.M.C., ch. 1, § 1.)