Investor Discrimination - Definition of Owner

2 Replies

By virtue of SUBTITLE 4. HOME IMPROVEMENT GUARANTY FUND Md. BUSINESS REGULATION Code Ann. § 8-405, (f) (2) (ii), "owners" who own more than three residences or dwelling places are denied access to make a claim against the Guaranty Fund.

To me, this seems prejudicial to the "owner" as well as to the contractors who pay into a fund for which they receive no value when working with those disqualified, and does little to encourage those disqualified to use licensed contractors.  That said, this post seeks to solicit feedback from the legal community here at BP regarding the definition of "owner". 

I've been asked by multiple investors if that exclusion pertains to ownership as recorded with the SDAT (and in identical name only) or if ownership carries over to their membership in LLC(s).

Feedback is appreciated, thank you!

Im not positive...but I believe it entails any form of private ownership in privately owned llcs and partnerships are included in this.  Ownership in publicly traded properties, eg REITS, is not considered in this factor.

I think you are misinterpreting the code.  As I read the code section, any owner who occupies the subject property as a primary residence may make a claim against the Fund. If an owner does not occupy the subject property as a principal residence, then a claim may still be made if the owner owns no more than three residences.  

As I interpret the code, even if I own a dozen residential properties, as long as the subject property is my primary residence, I may submit a claim against the home builder guaranty fund for defects that have not been corrected by the home builder, or covered by a new home warranty policy.   Additionally, my understanding of the intent of the Act is to protect owner occupants who purchase new home construction against defects caused by shoddy workmanship.  I have not read the Act in its entirety, so could you refer me to the code section that covers home improvement that is not new home construction.

Updated almost 6 years ago

I found the section of the code that refers to home improvement. My interpretation of an eligible owner does not change.

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