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PARRIS N. GLENDENING, Governor
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Ch. 492
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(3) Within 60 days from the warranty date, the builder's new home
warranty security plan shall provide the owner with validated new home warranty
documents.
(f) A new home warranty shall benefit any successor in title to the owner who
occupies the home for residential purposes during the warranty period.
10-606.
(a) A new home warranty security plan shall:
(1) Provide for the payment of claims against a builder for defects
warranted under this subtitle;
(2) Be operated by a corporation, partnership, or other legal entity
authorized to do business in Maryland;
(3) Demonstrate to the [Secretary] DIVISION that the plan will maintain
financial security to cover the total number of claims that the plan reasonably
anticipates will be filed against participating builders;
(4) File with the [Secretary] DIVISION a surety bond or an irrevocable
letter of credit from a federally insured financial institution in an amount set by the
[Secretary] DIVISION, but not less than $100,000, for the benefit of owners injured by
the failure of the new home warranty security plan to pay claims as required under
this subtitle;
(5) Provide within the new home warranty documents the performance
standards that describe the builder's obligations for defects warranted under this
subtitle;
(6) Provide for the mediation of disputes between an owner and a builder
before a claim will be paid by the builder's new home warranty security plan; and
(7) Meet any other requirements determined by the [Secretary]
DIVISION and be approved by the [Secretary] DIVISION.
(b) (1) The [Secretary] DIVISION may revoke or suspend approval for a new
home warranty security plan if the [Secretary] DIVISION determines that the plan:
(i) Is unable to meet its obligations under a new home warranty; or
(ii) Is administered in a manner that denies owners the warranty
coverage required under this subtitle.
(2) Except for new homes that were registered in the new home warranty
security plan prior to the revocation or suspension and for which a purchase or
construction contract has been executed, during the time period that approval for a
new home warranty security plan is revoked or suspended by the [Secretary]
DIVISION, the new home warranty security plan may not provide warranty coverage
for any new homes built in Maryland.
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- 3881 -
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