You find the new home of your dreams. But what happens when the builder does not deliver as promised?
As if buying a home is not stressful enough, what are your rights and recourse? How do you protect your deposit?
Marylanders buy more than 10,000 new homes each year, according to the attorney general's office, and a new-home purchase is protected by state law.
Here are questions to consider:
How do I find a reputable builder?
For starters, make sure your builder is registered. All homebuilders operating in Maryland must register with the attorney general's Home Builder Registration Unit, except for firms that build exclusively in Montgomery County. (Builders there must register with the Montgomery County Office of Consumer Protection.)
Call (410) 576-6573 in the Baltimore area or (877) 259-4525 elsewhere in the state to find out whether your builder is registered with the Home Builder Registration Unit. Or go to www.oag.state.md.us/homebuilder.
A builder's registration can be suspended, revoked or denied for several reasons, including engaging in a pattern of poor workmanship.
Another way to investigate your builder is to check lawsuits at the Maryland Judiciary Case Search at http://casesearch.courts.state.md.us/inq uiry/inquiry-index.jsp.
A word of caution: The number of lawsuits alone might not be a good indication of a builder's reputation and quality of work.
How do I protect my deposit?
State law requires the builder to place your deposit in an escrow account, unless the builder has a corporate surety bond or irrevocable letter of credit on file with the state.
The builder must disclose whether your deposit is protected by an escrow account, bond or letter of credit.
Verify the builder's escrow account by calling the bank. To verify the builder's bond or letter of credit, call the Home Builder Registration Unit.
What if I encounter problems?
Contact the builder first. Put your problems in writing to the builder. Keep copies of all correspondence and maintain a log of your contacts with the builder.
The attorney general's office says the best chance of resolving problems is to catch them early and to try to work them out with the builder.
What if a dispute with a builder goes nowhere?
There are several options.
If the builder has provided home warranty coverage, you might be able to file a claim under that plan.
