2023 Maryland Statutes › Business Regulation › Title 4.5 - Home Builder Registration › Subtitle 7 - Home Builder Guaranty Fund › Section 4.5-705 - Recovery From Fund for Actual Loss Caused by Registrant

(a)    Subject to this subtitle a claimant may recover compensation from the Guaranty Fund for an actual loss that results from an act or omission by a registrant as found by the Division or a court of competent jurisdiction.
(b)    Before submitting a claim to the Guaranty Fund, a consumer shall:
(1)    send a registrant a written notice describing the alleged defect or other claim for which the consumer intends to seek recovery; and
(2)    permit the registrant access, during regular business hours, to the consumer’s property to inspect, determine the cause of, and remedy the alleged defect or other claim within a reasonable period of time.
(c)    (1)    (i)    If a consumer has a new home warranty security plan, the consumer may also seek recovery from the Guaranty Fund if the consumer has first:
1.    filed a claim with the new home warranty security plan; and
2.    exhausted the plan’s claim process.
(ii)    A consumer seeking recovery under subparagraph (i) of this paragraph may not receive more than one recovery for the same actual loss.
(2)    A claimant who has also filed a claim with a new home warranty security plan shall include with the claim against the Guaranty Fund:
(i)    a copy or description of the claim filed with the new home warranty security plan;
(ii)    any documents submitted by the claimant in support of the warranty claim, including engineering or inspection reports;
(iii)    any documents submitted on behalf of the home builder or warranty plan in connection with the warranty claim, including engineering or inspection reports;
(iv)    disclosure of any recoveries received in connection with the warranty claim; and
(v)    if all or part of the warranty claim was denied, a copy of the denial.
(d)    (1)    The Division may deny a claim if the Division finds that the claimant unreasonably rejected good faith efforts by the registrant to resolve the claim.
(2)    In determining whether a claim should be denied under paragraph (1) of this subsection, the Division shall consider whether the claimant provided the registrant with notice and a reasonable opportunity to access and inspect and repair the claimed defect as required under subsection (b) of this section.
(e)    The Division may not award from the Guaranty Fund:
(1)    more than $50,000 to one claimant for acts or omissions of one registrant;
(2)    more than $500,000 to all claimants for acts or omissions of one registrant unless, after the Division has paid out $500,000 on account of acts or omissions of the registrant, the registrant reimburses $500,000 to the Guaranty Fund; or
(3)    an amount for attorney’s fees, consequential damages, court costs, interest, personal injury damages, or punitive damages.
(f)    A claim against the Guaranty Fund based on the act or omission of a particular registrant may not be made by:
(1)    a spouse or other immediate relative of the registrant;
(2)    an employee or principal of the registrant; or
(3)    an immediate relative of an employee or principal of the registrant.
(g)    (1)    A claimant may bring a claim against the Guaranty Fund within 2 years after the claimant discovered or, should have discovered the loss or damage or within 2 years after the expiration of the warranty under § 10–204 of the Real Property Article, whichever occurs first.
(2)    If a claimant has filed a claim with a new home warranty security plan, a claimant may bring a claim against the Guaranty Fund within 4 months after the claims process of the home warranty security plan is exhausted.