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(a) A registered new home builder or new home seller may apply to renew their registration before the current registration expires by:
(1) submitting a completed renewal application;
(2) paying the required renewal fee; and
(3) making a payment to the Maryland Home Builder Guaranty Fund as required under State law.
(b) At least 60 days before a new home builder or new home seller registration is set to expire, the Office must send written notification to the registrant. This notice must contain:
(1) a renewal application form or online link to the renewal form;
(2) the date on which the current registration expires;
(3) the date by which the Office must receive the renewal application; and
(4) information regarding the required fees associated with the renewal.
(c) A registrant must submit a completed renewal application to the Office no later than 30 days before the registration is set to expire.
(d) The Director may request that the Board review any renewal application to ensure the applicant continues to meet the criteria in Section 31C-5.
(e) By the date on which a registration is set to expire, the Director must send the applicant written notification of the Board’s recommendation, if any, and the Director’s final action regarding renewal of a registration. If the Director fails to notify the applicant by this date, the renewal application is deemed approved.
(f) If the applicant is denied registration approval, the Director must send the applicant written notification of the denial and the reasons for the denial.
A contract for the performance of any act for which a home builder registration is required is void unless the home builder was registered at the time that the contract was signed by the contract purchaser. (2019 L.M.C., ch. 1, § 1.)
(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.)
(a) Complaint. A consumer or homeowner may file a written complaint with the Director. A complaint should state the name and address of the builder or seller alleged to have committed a violation of this Chapter, describe the violation, and provide any other information that the Office requires. The Director may act on a complaint that is not complete.
(b) Investigation. The Office may:
(1) investigate any complaint made against any person who is operating as a new home builder or new home seller and who is or should be registered under this Chapter;
(2) investigate any potential violation of and enforce this Chapter without receiving a complaint;
(3) hold hearings or refer any matter to a hearing officer designated by the Chief Administrative Officer for an administrative hearing;
(4) subpoena the attendance of witnesses and documents;
(5) administer oaths;
(6) require the production of evidence relating to any matter under investigation;
(7) inspect relevant books, papers, records, or documents of the builder or seller at the place of business of the builder and seller during business hours; and
(8) conduct inspections of new home construction sites and models.
(c) Hearing.
(1) Before denying, suspending, refusing to renew, or revoking any registration, the Director must afford the builder or seller an opportunity for a hearing before a hearing officer designated by the Chief Administrative Officer for an administrative hearing.
(2) After giving a builder or seller the opportunity for a hearing, the Director may deny, suspend, refuse to renew, or revoke the registration of a new home builder or new home seller if the Director finds that the builder or seller:
(A) made a misstatement of material fact in the application for registration or renewal;
(B) committed fraud or misrepresentation in connection with any building activity conducted under the requirements of this Chapter;
(C) committed gross negligence in connection with any building activity conducted under the requirements of this Chapter;
(D) violated the building code or laws of the County or State;
(E) did not provide the new home warranty required by this Chapter;
(F) did not correct or settle a claim arising out of a defect that is covered by the warranty required by this Chapter;
(G) did not file an amendment to a registration application within 30 days of any material change in the information provided in the most recent application or amendment;
(H) aided, abetted, or knowingly combined or conspired with an unregistered person to evade this Chapter;
(I) abandoned or willfully failed to perform, without justification, a contract for construction of a building that is to be used as a residence;
(J) willfully deviated from or disregarded plans or specifications in any material way without consent of the consumer or homeowner;
(K) did not comply with this Chapter in any material way;
(L) diverted funds or property that were received for the completion of a construction project, and used the funds or property for another project, operation, obligation, or purpose, with intent to defraud or deceive creditors or the contract purchaser;
(M) served as an officer, Director, owner, member, principal, or stockholder for a builder or seller whose registration was revoked or suspended under this Chapter;
(N) engaged in a pattern of unfair or deceptive trade practices in violation of Chapter 11;
(O) obtained or attempted to obtain a residential home construction permit by falsely representing that the applicant was seeking a permit to construct a home to be occupied by the applicant as a personal residence;
(P) failed to satisfy final judgments or liens in favor of a contract purchaser, homeowner, subcontractor, or government;
(Q) engaged in fraud, deception, misrepresentation, or knowing omissions of material facts related to new home building contracts;
(R) engaged in a pattern of poor workmanship as evidenced by unresolved building code violations or unsatisfied arbitration awards or judgments in favor of a consumer; or
(S) violated a term or condition of a conditional registration.
(3) The Director may refer a complaint or a violation to a hearing officer designated by the Chief Administrative Officer for an administrative hearing.
(d) Hearings, generally. Any hearing held under this Section must be conducted under the Administrative Procedures Act.
(e) Appeals. A person aggrieved by a decision of the hearing examiner or Director to deny, suspend, refuse to renew, or revoke a registration may seek judicial review of the decision in the Circuit Court under the applicable Maryland Rules of Procedure governing judicial review of administrative agency decisions. A party aggrieved by the decision of the Circuit Court may appeal that decision to the Court of Special Appeals. (2019 L.M.C., ch. 1, § 1.)
Any violation of this Chapter is a Class A violation. (2019 L.M.C., ch. 1, § 1.)
(a) The Director administers and enforces this Chapter.
(b) The Executive must adopt Method (2) regulations to implement this Chapter. The regulations must:
(1) set one or more fees appropriate to cover the cost of administering this Chapter;
(2) provide for the form and content of the warranty required by Section 31C-8;
(3) set forth the terms of the warranty required by Section 31C-8;
(4) describe other allowable warranty exclusions the Executive deems necessary;
(5) include standards under which a person may receive a waiver under Section 31C-2; and
(6) include standards by which a person may be deemed qualified to comply with County and State law, as required in Section 31C-5. (2019 L.M.C., ch. 1, §1; 2019 L.M.C., ch. 23, §1.)