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Attention Maryland Home Builders–New Maryland Legislation

Author: Michael A. Faerber Date: 09/26/2018

Categories: Real Estate Law

The following are some of the many new laws that will go into effect in Maryland on October 1, 2018, which are of interest to home builders in Maryland.

  1. Chapter 778 (House Bill 239) – Prince George’s County – Sales of Residential Real Property – Community Amenities – Advertising.  This legislation requires home builders in Prince George’s County to make available to prospective purchasers, a copy of any recreational facilities agreement (RFA) recorded with the PG County Planning Department.  The home builder must display in the sales or management office of the community (1) the amenities listed in the RFA; (2) a detailed site plan and building permit number for each amenity listed in the RFA, and (3) the expected completion dates of each amenity as stated in the RFA.  This applies only to residential communities. The legislation is prospective only, and does not affect advertising for a development that promotes an amenity listed in the RFA recorded prior to October 1, 2018. The legislation still requires that you provide a disclosure to home buyers, and that advertising shall include a disclosure of the requirements.
  2. Chapter 681 (Senate Bill 648) Real Property – New Home Sales – Information on Energy –Efficient Options. – This legislation requires that a home builder in Maryland, with respect to a development that contains 11 or more new homes to be built by the same builder, prior to executing a contract for the initial sale of a new home, provide written information to the purchaser about energy-efficient options available for installation before construction is completed.  The written information must also include a statement that tax credits may be available related to the energy-efficient options. The bill also requires that the contract contain an acknowledgment regarding delivery to the purchaser of the written information about energy-efficient options and tax credits.
  3. Chapter 340 (Senate Bill 755) Credit Regulation – Escrow Accounts – Water and Sewer Facilities Assessments.  This legislation is related to the private front foot benefit charges we are dealing with at most communities.  We are not yet certain how a home builder would apply this bill, but what it does is allow a homeowner to request that their lender escrow the annual FFB payments and pay them on behalf of the homeowner to the private utility company.  This is helpful, but it depends upon the homeowner requesting it. Developers, Builders and any of their related mortgage companies may want to consider an educational aspect of this, by notifying and strongly suggesting to home purchasers of their right to request this, so that it can be easily dealt with as part of their mortgage payment process.
  4. Chapter 347 – Condominiums – Claims Against Developers and Vendors – Unenforceability of Certain Provisions.  This legislation specifies that any provision of any instrument, such as a declaration, bylaw or contract for the initial sale of a residential condominium unit, made by a developer or vendor, is unenforceable if the provision places certain limitations on specified building defect and other claims.  The legislation provides that, with respect to a claim alleging failure to comply with (1) applicable building codes, (2) plans and specifications approved by a county or municipality, (3) manufacturer’s installations instructions, or (4) specified warranty provisions contained in a statute, any provision is unenforceable if the provision (i) shortens the statute of limitations applicable to the claim, (ii) waives the application of the discovery rule or other accrual date applicable to the claim, (iii) requires a unit owner or the council of unit owners to assert a claim subject to arbitration within a period of time that is shorter than the statute of limitations applicable to the claim, or (iv) operates to prevent a unit owner or the council of unit owners from filing a lawsuit, initiating arbitration proceedings for a claim subject to arbitration, or otherwise asserting a claim within the applicable statute of limitations.  There are applicable limitations and exceptions in the legislation and the legislation only applies prospectively to contracts, declarations and bylaws signed or recorded after October 1, 2018.

Contact Michael Faerber or any of the attorneys in our real estate legal team at McMillan Metro, P.C. if you have question about any of the foregoing or if we can help you with your real estate law matters.