State fines 15 homebuilders $23,000 total

Penalties tied to deposits, failure to file registration

July 07, 2005|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

Fifteen homebuilders have paid $23,000 in fines for allegedly failing to provide protection for customer deposits or register with the state, the Maryland attorney general's office said yesterday.

The builders - mostly small businesses, and about half of them new to the industry or to the state - were individually hit with penalties ranging from $500 to $2,500.

None of the builders was accused of failing to perform work or similar wrongdoing; the problems were administrative. But Attorney General J. Joseph Curran Jr. said the issues can't be ignored - especially as new homes become increasingly expensive and more builders enter the market to get a piece of the pie.

"It's a consumer protection law, clearly," he said.

About 3,500 homebuilders work in the state, an increase of 500 in two years. Prices have risen even more quickly because of land constraints: A new single-family home in Baltimore County costs more than $550,000 on average, a 28 percent jump in a year.

Curran said his office gets about 300 complaints each year from homebuyers, sometimes about construction, sometimes about work delays.

It's a noticeable improvement over the years before 2001, he said, when Maryland started requiring builders to register for a license so the state can track complaints, mediate disputes and keep repeat offenders from plying their trade here.

"It's good to see that the overwhelming majority of home- builders are not getting any complaints," Curran said.

All 15 builders who paid fines agreed to comply with the law as part of a settlement, he said.

Three - Anchor Down Homes Inc. of Burkittsville, Cher-Chris Construction Inc. of Cockeysville and Liller Construction of Oakland - allegedly did not have the required deposit protection. To ensure they finish construction as promised, builders must place customer deposits in escrow accounts or protect them with a surety bond or letter of credit.

The attorney general's office said the other builders failed to register or re-register with the state. They are A&M General Contracting Inc. of Salisbury; B&F LLC of Potomac; Barnett Ventures LLC of Severn, Charles Black Construction Co. LLC of Upper Marlboro; Country Carpentry Construction of Prince Frederick; Halp Properties LLC of Phoenix; Maxxam Homes LLC of Hagerstown; October Development LLC and July Development LLC, both of Berlin; Park Place Residential Condominium Trust of Annapolis; River Run Development Associates LLC of Huntington, N.Y.; and Southern Builders Inc. of Salisbury.

Ron Baquol, owner of Halp Properties, said he discovered that his registration had expired when he tried to renew it.

"It isn't something they came after me on," said Baquol, who said he's been building homes for 30 years. "Nobody was harmed, I paid my fee and my fine, and that was it."

The chief executive of Anchor Down Homes said he was planning to stop building homes when the state brought up the issue of deposit protection. Mark S. McCulley, who formed the business three years ago, said it is now in bankruptcy.

"Material costs have gone up about 300 percent," he said.

Tom Ballentine, director of government affairs for the Home Builders Association of Maryland, said the fines are all for "business management issues."

"The important thing to note is they aren't construction defects," he said. "There are very, very few complaints regarding construction quality."

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