Ch. 520                                        LAWS OF MARYLAND

Except with the express written approval of the buyer not to
pay, in the event a subcontractor or supplier fails, in the
opinion of the [custom home] builder, to perform in accordance
with the contract between the subcontractor or the supplier and
the [custom home] builder, the failure of a [custom home] builder

to pay or cause to be paid the lawful claims of any person
furnishing labor or material, including fuel, within a reasonable
period after the receipt from the buyer of consideration paid to
satisfy the claims, shall create a rebuttable presumption that
the consideration received by the [custom home] builder has been
used or appropriated in violation of the trust established by
this subtitle.

10-504.

(a)  (1) Except as provided under paragraph (4) of this
subsection AND SUBSECTION (E) OF THIS SECTION, a [custom home]
builder who receives consideration from a buyer in connection
with the performance of a [custom] home contract shall place
the consideration into an escrow account to the extent that the
consideration is a payment in advance of the completion of the
labor or the receipt of the materials for which the consideration
is paid.

(2)  The escrow account under paragraph (1) of this
subsection shall be separate and apart from the regular funds of
the builder in order to assure that the advance payment in the
escrow account can be returned to the buyer if the buyer becomes
entitled to the return of the advance payment. However, a
builder may place advance payments received in connection with
more than one home into a single escrow account.

(3)  If the advance payment under paragraph (1) of
this subsection is made in the form of a check or draft, a
[custom home] builder may accept the advance payment only in
the name of the escrow account.

(4)  If consideration received under the HOME contract
in advance of the completion of the labor or the receipt of
materials for which the consideration is paid does not total in
excess of 5 percent of the HOME contract price, that
consideration need not be placed in an escrow account under
paragraph (1) of this subsection.

(b)  A [custom home] builder may make withdrawals from
an escrow account established in compliance with subsection
(a)(1) of this section solely for the purpose of:

(1) Returning all or a portion of the sum of money to
the buyer;

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