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LAWS OF MARYLAND

Ch. 288

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1980 January 1, 1981.

Approved May 6, 1980.

CHAPTER 289

(Senate Bill 194)

AN ACT concerning

Home Improvement Loans - Letters of Credit

FOR the purpose of permitting applicants for a contractor's
license to file a an irrevocable letter of credit in a
certain amount as evidence of financial security with
the Maryland Home Improvement Commission.

BY repealing and reenacting, with amendments,

Article 56 - Licenses

Section 257(c)

Annotated Code of Maryland

(1972 Replacement Volume and 1979 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That section(s) of the Annotated Code of Maryland
be repealed, amended, or enacted to read as follows:

Article 56 - Licenses

257.

(c) An applicant for a contractor's license shall file
with the Commission a cash, surety, or property bond OR A AN
IRREVOCABLE LETTER OF CREDIT in the amount of $5,000 or
evidence of financial responsibility satisfactory to the
Commission tor the benefit of any person who is damaged
because of the breach of the home improvement contract. The
bond may not be construed to require any surety to be
responsible for the completion of a home improvement
contract entered into by the principal on the bond. The
liability of the surety under any bond may not exceed in the
aggregate the amount of the bond, regardless of the number
or amount of claims filed, and if the latter should exceed
the amount, the surety shall pay the $5,000 to the Home
Improvement Commission for distribution to claimants and
shall be relieved of all liability under its bond. Claims
shall be paid in the order of filing.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act
shall take effect July 1, 1980.