New Builder Guaranty Fund Helps New Home Buyers with Additional Security


BALTIMORE (Jan. 9, 2009) - Attorney General Douglas F. Gansler announced today that new homebuyers in Maryland now have the added protection of a Home Builder Guaranty Fund when confronted with construction defects or structural problems. The Home Builder Guaranty Fund will allow consumers to be compensated up to $50,000 for problems with a new home built by a registered builder, such as uncorrected construction defects or failing to finish the structure. Funded through a $50 fee paid with each application for a new home permit, the Guaranty Fund only applies to contracts made with a registered homebuilder after January 1, 2009.

“I am pleased that my office is able to provide additional protections for Maryland consumers who are making a huge investment with a new home purchase,” said Attorney General Gansler. “In the midst of an unstable economy, consumers now have additional security when they contract to buy a new home.”

A consumer must take certain steps before applying for compensation from the Guaranty Fund. First, the consumer must send the builder written notice describing the alleged defect and permit the builder access onto the property during regular business hours to inspect and remedy the alleged defect within a reasonable period of time. If the consumer has a new home warranty security plan, the consumer must first file a claim with the warranty plan and exhaust that process before seeking recovery from the Guaranty Fund.

Once the consumer has complied with those requirements, a claim may be filed for recovery from the Guaranty Fund. To file a claim for recovery from the Guaranty Fund, the consumer must submit a written complaint to the Consumer Protection Division’s Mediation Unit, which will first attempt to resolve the matter through mediation.

The law requires that a claim against the Guaranty Fund must be filed within two years after the consumer discovered or should have discovered the loss or damage, or within two years after the expiration of the implied warranty, whichever occurs first. Consumers can obtain additional information about the Guaranty Fund by contacting the Home Builder Registration Unit at 410-576-6573 in Baltimore or toll-free at 1-877-259-4525.

Source: Attorney General Douglas F. Gansler

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