Fill and Sign the Maryland New Home Construction Contract Maryland Form

Construction Contract This agreement is made on the date written above our signatures between Contractor's Name: ______________________________ (Contractor) and Owner's Name: ______________________________ (Owner). Contractor Contractor's Name: ______________________________ Address: ______________________________ Address: ______________________________ City: ______________________________ State: ___________ Zip: ___________ Work Phone Number: ______________________________ Cell Phone Number: ______________________________ Fax Number: ______________________________ Email Address: ______________________________ Builder Registration Number: ______________________________ Contractor's Name: ______________________________ will be referred to as Contractor throughout this agreement. Owner Owner's Name: ______________________________ Address: ______________________________ Address: ______________________________ City: ______________________________ State: ___________ Zip: ___________ Day Phone Number: ______________________________ Cell Phone Number: ______________________________ Fax Number: ______________________________ Email Address: ______________________________ Owner's Name: ______________________________ will be referred to as Owner throughout this agreement. Owner's Representative Owner will be represented by Representative's Name: ______________________________ (Owner's Representative) as described in this agreement. Representative's Name: ______________________________ Address: ______________________________ Address: ______________________________ City: ______________________________ , State: ___________ Zip: ___________ Day Phone Number: ______________________________ Cell Phone Number: ______________________________ Fax Number: ______________________________ Email Address: ______________________________ Representative's Name: ______________________________ will be referred to as Owner's Representative throughout this agreement. Page 1 The Construction Site Legal Description: ______________________________ ______________________________ City: ______________________________ , Maryland Zip: ___________ Page 2 I. Project Description A. For a price identified below, Contractor agrees to complete a new residence (identified as the Project in this agreement) for Owner. II. Contract Price A. In addition to any other charges specified in this agreement, Owner agrees to pay Contractor $ ___________ for completing the Work described as the Project. B. This contract for the initial sale of a new home, as defined in the Maryland Home Builder Registration Act, is contingent on Owner obtaining a written commitment for a loan secured by the property. The maximum loan interest rate the purchaser is obligated to accept is ___________ percent. C. A deposit of ___________ will be made by Owner by ___________ . D. A mortgage, of the type described as ___________ will be obtained by ___________ . III. Payment per Unit of Work A. In addition to other charges specified in this agreement, Owner agrees to pay Contractor $ ___________ per ___________ of ______________________________ 1. If the actual quantity of ______________________________ is more or less than ___________ , the Contract Price will be increased or reduced by $ ___________ per ___________ of ______________________________ more or less than ___________ . IV. Scheduled Start of Construction A. Work under this agreement will begin when requested by Owner in a notice to proceed. V. Scheduled Completion of Construction A. Work under this agreement will be Substantially Complete within ___________ Calendar Days after the date construction begins. VI. Documents Incorporated A. This agreement incorporates by reference certain disclosures and notices required by federal and state law. The following documents are incorporated as though included in full as part of this agreement. Draw Schedule: Maryland's Custom Home Protection Act Section 10-505(1) Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(a) Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(b)(3) Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(b)(4) Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(c) Notice in Compliance with Maryland Real Property Code Annotated Section 10-607 and Code of Maryland Regulations Section 09.01.09.03 Notice in Compliance with Maryland Real Property Code Annotated Section 10-607(c) and Code of Maryland Regulations Section 09.01.09.03 - Rescission Clause for Waiver of Warranty Right Thermal Insulation Disclosure Notice of Right to Cancel under Regulation Z (in quadruplicate) B. This agreement incorporates by reference certain documents which define and describe the Work to be done. The following documents are incorporated as though included in full as part of this agreement. 1. Plans Page 3 Plans dated ___________ Consisting of ___________ sheet(s) Prepared by ______________________________ Last changed on ___________ And further identified as ______________________________ 2. Specifications Specifications dated ___________ Consisting of ___________ sheet(s) Prepared by ______________________________ Last changed on ___________ And further identified as ___________________________ VII. Performance Standards A. The Project shall be constructed in accordance with all applicable building codes in effect at the time of the construction of the new home and certain performance standards or guidelines. These performance standards shall prevail in the performance of the contract and any arbitration or adjudication of a claim arising from the contract. The performance standards or guidelines adopted may be: Any performance standards or guidelines adopted by the home builder and incorporated into the contract that are equal to or more stringent than the performance standards or guidelines adopted at the time of the contract: 1. By the National Association of Home Builders; or 2. Under the federal National Manufactured Housing Construction and Safety Standards Act, to the extent applicable. VIII. Ownership of Plans A. All Plans, Drawings and Specifications created for Work under this contract are instruments of service and remain the property of Owner. The use of these instruments of service on Work other than provided in this contract without permission of Owner is prohibited. All copies of Drawings and Specifications other than a single record copy shall be returned to Owner upon request after completion of the Work. IX. Documents Supplied to Contractor A. Owner will furnish to Contractor at no cost: 1. ___ full sets of Plans and Specifications for all trades, on paper. 2. Contractor will distribute Contract Documents as required by Subcontractors. X. Scope of Work A. Contractor shall supervise and direct the Work and accepts responsibility for construction means, methods, techniques, sequences and procedures required to complete the Project in compliance with the Contract Documents. B. Contractor shall make a best effort to adopt and implement policies and practices designed to minimize Work stoppages, slowdowns, disputes or strikes. Except as may be specifically provided elsewhere in this or a separate agreement, Contractor is not liable to Owner for damages suffered by Owner as a result of Work stoppages, slowdowns, disputes or strikes. Contractor shall allocate labor tasks among the various trades in accordance with local custom, rules, jurisdictional awards, regulations, Page 4 and decisions, regardless of any classification by the Contract Documents. XI. Project Superintendent A. Contractor shall be available to supervise the Work on a regular basis or shall have a competent Representative available, either on the Job Site or by phone, with authority to give instructions and make decisions for Contractor. XII. Employee Relations A. Contractor will ensure that personnel will be furnished and required to use safety equipment complying with OSHA standards, including hard hats, safety glasses with permanently attached side shields, body harnesses with shock cord lanyard, steel toe work boots, and appropriate protective equipment and clothing. Any employee who refuses to comply with OSHA standards shall be barred from the Job Site at the discretion of Contractor or Owner. XIII. Owner's Responsibilities A. Owner will ensure that Owner's Representative responds in writing and with reasonable promptness to written requests from Contractor for (1) Interpretation of the Plans or Specifications, or (2) Other information relevant to completion of the Work. Contractor is authorized to rely on written responses from Owner's Representative. XIV. Authority of Owner's Representative A. Owner's Representative has authority to administer the contract, make construction decisions on behalf of Owner, and is the primary authority on issues of compliance with the Drawings and Specifications, quality of workmanship, materials used, manner of performance, and rate of progress on the Project. B. After the Contract Date, Owner shall make no change in the responsibilities or authority of Owner's Representative without consent of Contractor. C. Owner's Representative shall have the right to visit the Project and view Work in progress at any time. Any Defective Work found or suspected, either as the result of a site visit or otherwise, shall be reported promptly to Contractor. No actions taken or statements made during site visits shall relieve Contractor of obligations described in the Contract Documents. D. Communication between Contractor and Owner shall be initiated through Owner's Representative unless direct communication is required by Law or Contract Documents. Unless otherwise authorized by Contractor, communications between Owner's Representative and Subcontractors or Material Suppliers shall be through Contractor. Communications by Contractor and Subcontractors with Separate Contractors shall be through Owner's Representative. Communications between Contractor and consultants to Owner's Representative shall be through Owner's Representative. E. Owner's Representative shall have the authority to reject and order removed any portion of the Work which does not conform to the Contract Documents. F. Owner's Representative shall have authority to require additional Inspection or testing of the Work regardless of the completion status. G. Owner's Representative shall have authority to conduct Inspections in connection with Beneficial Occupancy and to determine the dates of Substantial Completion and Final Completion. XV. Representations by Contractor Page 5 A. Contractor has reported to Owner all errors, inconsistencies, ambiguities, and omissions found in the Plans and Specifications and has concluded that the Contract Documents define the Work required with enough detail to allow Contractor to complete the Project. XVI. Payment for Materials Stored Off-Site A. Except as otherwise provided in the Contract Documents, cost of materials and equipment to be incorporated into the Work which are stored off the Job Site may be included in an application for payment. XVII. Interest A. Payments due and not paid under the Contract Documents shall bear interest from the date payment is due at the rate of ___________ percent per month. B. Payments due and not paid under the Contract Documents shall bear interest from the date payment is due at an annual rate of ___________ percent. XVIII. Liens and Waivers A. Contractor will ensure that Subcontractors, tradesmen and Material Suppliers working under direction of Contractor are paid when due to avoid the exercise of lien rights provided by state Law. XIX. Details on Lien Claims A. On request of Contractor, Owner shall provide to Contractor a legal description of the Site and all information about the Project as may be required by Contractor, Subcontractors, Material Suppliers, or tradesmen to enforce lien rights in Maryland. XX. Grounds for Withholding Payment A. Owner may withhold payment due Contractor for Defective Work which has not been corrected in compliance with terms of this agreement. B. Grounds entitling Owner to withhold certain amounts due Contractor under this agreement shall not relieve Owner of the obligation to pay Contractor other amounts then due and shall not relieve Owner of the obligation to pay in full when the reason for withholding payment no longer exists. C. Should any mediation, arbitration or court proceeding determine that Owner was not justified in withholding payment to Contractor, the amount wrongfully withheld shall be treated as an unpaid balance and accrue interest as provided by Law or this contract from the Calendar Day payment was wrongfully withheld. XXI. Final Payment A. Contractor will submit an application for final payment and will notify Owner's Representative when the Work has been completed. Owner's Representative will issue a certificate of completion on determination that the Project is complete and in compliance with the Contract Documents. When the certificate of completion is issued, the entire unpaid balance of the contract amount, including any Retainage, is payable to Contractor. B. Making of final payment constitutes waiver of all Claims by Owner against Contractor except those Claims previously made in writing and delivered to Contractor and those obligations otherwise provided by this agreement or by operation of Law. C. The acceptance of final payment by Contractor shall constitute a release by Contractor of known Claims against Owner arising out of this contract except those Claims which (1) Have been made in Page 6 writing and identified by Contractor as not having been settled at that time, or (2) Are based on fraud or misconduct by Owner. D. Owner will notify Contractor of the date when notice of Final Completion is recorded. XXII. Changes in the Work A. Except as provided elsewhere in this agreement, no change to this contract (including modification, clarification, interpretation or correction of the Plans or Specifications) shall be made without mutual agreement and a written Change Order signed by Contractor and Owner identifying the change, the cost of the change, and the effect on Project schedule, if any. B. Any change in Plans, Specifications or Contract Documents necessary to conform to existing or future Laws, codes, ordinances or regulations shall be considered Extra Work. C. Changes in the Work required due to defects or inconsistencies in Plans, Specifications or other Contract Documents shall be considered Extra Work. D. Any act, error, or omission by Owner or anyone acting on behalf of Owner which increases the cost of completing the Work or delays the Contract Completion Date shall be considered Extra Work. E. The price for Work done under a Change Order shall be the most Similar cost published in the most recent edition of the National Construction Estimator (or equivalent) plus supervision, taxes, insurance, overhead and a reasonable profit. Profit and overhead (including Job Site overhead, off-site overhead and overhead caused by delay) shall be calculated as 25 percent of the cost of Work performed by crews of Contractor and 15 percent for Work performed by any Subcontractor. F. Any increase in the cost to Contractor of labor, materials, equipment or Subcontract Work between the time the contract is executed and the time the Work is done shall be considered Extra Work so long as the increase is beyond control of Contractor. Contractor shall provide detailed records showing each cost change claimed. G. No Claim for payment for Extra Work and no Claim for additional time to complete the Work shall be recognized under this agreement without a written Change Order or a notice of Claim. Failure by Contractor to assert the right to a written Change Order or a Claim within 30 calendar days after beginning Work on a change in the Work shall constitute waiver by Contractor of the right to additional compensation and waiver of the right to additional time to complete a change in the Work. No act or omission of either Contractor or Owner shall be interpreted as waiver of the Requirement for a written Change Order or notice of Claim, nor shall any Claim that Owner has been unjustly enriched support a Claim for a constructive Change Order. The provisions of this paragraph are the essence of this agreement. H. Failure of Contractor and Owner to agree on the terms of a Change Order shall be resolved under the provisions of this agreement which cover Claims and disputes. I. Should Contractor and Owner fail to agree promptly on the terms of a Change Order, Contractor shall be paid, pending resolution of the dispute, the portion of the cost of the change not in dispute, including the costs of time and materials required to execute the change. Payments required under this paragraph shall be made as the Work progresses, concurrently with progress payments. J. A substitution of materials may be made in the following circumstances and in the following manner : ____________________________ . XXIII. Cooperation of the Parties A. Contractor shall cooperate with persons employed by Owner and coordinate Work with others on Page 7 the site. In the case of disagreements as to the sequence of Work, use of space, responsibility for damage, or other dispute related to the Work, Contractor and those working for Contractor shall abide by the decision of Owner's Representative on the procedure to be followed. XXIV. Job Conferences A. Prior to the start of construction, Contractor and Owner shall hold a pre-construction conference to identify: (1) The people who will be involved in construction of the Project, their chain of authority, addresses, telephone numbers, fax numbers and email addresses to be used when requesting information or giving notices, (2) The proposed construction Schedule, (3) Procedures for approving Shop Drawings, product data and Submittals, (4) Procedures for handling Change Orders, (5) Construction Site Requirements such as dust and erosion control, storm water management, Project signs, clean up and housekeeping, temporary facilities, utilities, security, and traffic, (6) Safety Requirements and procedures, (7) Quality control, testing, Inspections and notice Requirements, (8) Inspection procedures, and (9) The handling of payment requests. XXV. Contractor Claims A. Contractor and Owner agree to make a good faith effort to resolve all Claims that arise under this agreement and shall seek the opinion of expert disinterested parties on the validity of Claims, when appropriate. Claims not resolved to the mutual satisfaction of Contractor and Owner shall be resolved under the provisions of this agreement covering dispute resolution. XXVI. Notice of Claims A. No Claim by Contractor shall be considered unless Contractor provides Owner or Owner's Representative with a notice that there will be a Claim for additional compensation or an extension of time. This notice of Claim shall be made no less than 5 Calendar Days after Contractor recognizes or should have recognized that circumstances exist which support such a Claim. The notice of Claim shall include: (1) The date of the notice, (2) The date the basis for the Claim was discovered, (3) The circumstances that support the Claim, and (4) The estimated additional cost to Owner or additional time required to complete the Project. B. If the Claim involves Extra Work, Contractor shall maintain detailed records which show each expense incurred, including payroll records and receipts for Subcontracted Work, materials and equipment. These detailed records shall be made available to Owner for verification while Work subject to the Claim is being performed. C. The amount Claimed by Contractor shall be calculated in accord with provisions in this contract on charges for Extra Work. XXVII. Arbitration A. Any controversy or Claim arising out of or relating to this contract or contract warranty or the breach thereof which cannot be resolved by mediations shall be settled by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. 1. Any controversy or Claim arising out of or relating to this contract or contract warranty or the breach thereof or a Change Order or addendum to this contract which cannot be resolved by mediations shall be settled by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Page 8 B. Contractor and Owner agree to include in each contract for construction or design services on the Project a clause which requires that disputes under that contract be settled by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules. C. If a Claimant in arbitration recovers less than 50 percent of the amount demanded in arbitration, Contractor and Owner agree that the Claimant shall pay all costs in arbitration, including the arbitrator's fees and the attorney's fees of the opposing Party. XXVIII. Insurance A. General Requirements 1. Contractor shall carry workers' compensation insurance and public liability insurance as required by Law and regulation for the protection of Contractor and Owner during progress of the Work. XXIX. Subcontracted Work A. Contractor shall notify Owner of each principal Subcontractor and vendor Contractor proposes to retain for Work on the Project and the Scope of their Work. Contractor shall not contract with any Subcontractor or vendor to whom Owner makes a reasonable and timely objection. Contractor shall not change a previously selected Subcontractor or vendor without notifying Owner of the proposed change. Contractor shall bear any additional cost incurred due to voluntary substitution of Subcontractors or vendors. B. If Owner rejects any proposed Subcontractor or vendor, Contractor shall promptly propose another for approval by Owner. On approval of the successor, the Contract Price and Contract Time shall be adjusted in proportion to the difference between proposals of the rejected and the approved successor Subcontractor or vendor. C. Contractor agrees that the terms of this contract shall apply equally to each Subcontractor. Contractor agrees to take such action as may be necessary to bind each Subcontractor to the terms of this agreement for the appropriate portion of the Work. XXX. Substantial Completion A. When, in the opinion of Contractor, the Work is Substantially Complete, Contractor shall prepare a preliminary Punch List of Work remaining to be done and deliver that Punch List to Owner's Representative with a request for evaluation of Substantial Completion. If, in the opinion of Owner's Representative, items on the preliminary Punch List are consistent with Substantial Completion, Owner's Representative shall conduct an Inspection of the Work to evaluate compliance with the Contract Documents. B. The Project shall not be considered Substantially Complete until: (1) All utilities and services are connected and operating, (2) All installed equipment has been tested and found to be in working condition, (3) Contractor has completed performance tests required by the Contract Documents, (4) Reports, maintenance manuals, warranties, keys, control devices, and Drawings required by the Contract Documents have been delivered to Owner, (5) Debris, waste, and excess materials have been removed from the site, and (6) Final Inspection has been passed and occupancy has been approved by the public authority. C. Any acknowledgment of Substantial Completion may be annotated to indicate that it is not applicable to specified portions of the Work. D. If, after Inspection, the Project does not qualify as Substantially Complete, Owner or Owner's Representative shall provide Contractor with a written list of the Work found to be: (1) Incomplete, (2) Page 9 Out of compliance with the Contract Documents, or (3) Defective in operation or workmanship. Contractor shall complete or correct all Work listed prior to requesting a subsequent Inspection for Substantial Completion. E. Before Owner takes possession or occupancy of the Project, Contractor shall receive a comprehensive Punch List of discrepancies to be corrected or Work to be finished by Contractor and a date for completing this Work. Contractor shall complete and correct items on the Punch List by the designated date. F. The Punch List given to Contractor is a complete and final list of Defective or incomplete Work on the Project. Owner shall be deemed to have accepted Work not on the Punch List. Nothing in this paragraph shall be interpreted as relieving Contractor of the obligation to meet warranty and call-back obligations. G. Owner's Representative will prepare a certificate of Substantial Completion for signature by Owner and Contractor when the Project or a specific portion of the Project is ready for occupancy. Except as otherwise provided in the Contract Documents, signing of the certificate of completion shall: (1) Transfer to Owner responsibility for maintenance, safety, utility expense, controlling access at the site, and (2) Begin running of any warranty or call-back period on the Project. Disclosures in Compliance with Maryland Real Property Code Annotated Section 10-505 Statement in compliance with Maryland Real Property Code Annotated § 10-505(3): Any other provision of this contract notwithstanding, any and all changes that are to be made to the contract shall be recorded as "change orders" that specify the change in the work ordered and the effect of the change on the price of the house. Statement in compliance with Maryland Real Property Code Annotated § 10-505(5): Contractor will deliver to Owner within 30 days after each progress payment a list of the subcontractors, suppliers, or materialmen who have provided more than $ 500 of goods or services to date and indicate which of them have been paid by Owner Statement in compliance with Maryland Real Property Code Annotated § 10-505(6): Any other provision of this contract notwithstanding, Contractor will provide waivers of liens from all applicable subcontractors, suppliers, or materialmen within a reasonable time after the final payment for the goods or services they provide. Disclosure of Subcontractors To the extent known, the following are the primary Subcontractors who will be working on the Project. Subcontractor, Trade or Specialty ______________________________ , ______________________________ ______________________________ , ______________________________ Notice Required by Maryland Business Regulation Code Annotated Section 4.5-603 and Maryland Real Property Code Annotated Section 14-117(j) Owner has the right to receive a consumer information pamphlet as provided under the Home Builder Registration Act. Owner has received a consumer information pamphlet as provided under the Home Builder Registration Act. Owner's Name: ______________________________ , Owner Page 10 ______________________________ ________________ (Signature) (Date) ______________________________ (Printed Name) ______________________________ ________________ (Signature) (Date) ______________________________ (Printed Name) Disclosure Required by Maryland Business Regulation Code Annotated Section 4.5-307(c-1) The sales representative works for the home builder, which means that he or she may assist the buyer in purchasing the property, but his or her duty of loyalty is only to the home builder. Page 11 Signatures The signatures that follow constitute confirmation by those signing that they have examined and understand the Contract Documents and agree to be bound by the terms of these documents. This contract is for immediate acceptance. Any delay in acceptance beyond ___________ will require renegotiation of the terms of this agreement. This agreement is entered into as of the date written below. Owner's Name: ______________________________ , Owner ______________________________ ________________ (Signature) (Date) ______________________________ (Printed Name) ______________________________ ________________ (Signature) (Date) ______________________________ (Printed Name) Contractor's Name: ______________________________ , Contractor ______________________________ ________________ (Signature) (Date) ______________________________ (Printed Name and Title) Page 12 Draw Schedule: Maryland's Custom Home Protection Act Section 10-505(1) Payments by Owner will be due as provided below. As required by law, this draw schedule is on a separate sheet of paper and is signed by both Owner and Contractor. I. Payment Plan A. Owner will pay to Contractor the Contract Price in installments consisting of progress payments and a final payment on completion of the Work. II. Progress Payments A. Schedule of Progress Payments 1. Progress payments are due as each phase of the Work is completed. 2. Payments will equal the Contract Price (less any initial payment) times the percentage listed for each phase: 10 percent of the Contract Price after Breaking Ground 10 percent of the Contract Price after Foundation is Complete 15 percent of the Contract Price after Rough Framing is Complete 10 percent of the Contract Price after Rough Plumbing is Complete 10 percent of the Contract Price after Doors and Windows are Installed 10 percent of the Contract Price after Exterior Wall Finish is Installed 10 percent of the Contract Price after Cabinets and Counters are Installed 10 percent of the Contract Price after Mechanical and Electrical Pass Inspection 10 percent of the Contract Price after Interior Finish is Complete 5 percent of the Contract Price after the Project passes Final Inspection B. Processing of Progress Payments 1. No later than 5 calendar days before a progress payment is due under the terms of this agreement, Contractor shall submit to Owner's Representative an application for payment itemizing charges for Work done in previous pay periods and for Work done in the current pay period, including adjustments to the Contract Price resulting from approved Change Orders or other changes required by Owner. Within a reasonable time after receipt of a request for payment, Owner's Representative will inform Contractor and Owner that a Certification of Payment has been issued covering all, part, or none of the payment request. If any portion of an application for payment is not approved, Contractor shall be entitled to payment on the portion approved. 2. Except as provided otherwise in this agreement, Owner shall pay the amount due within 7 calendar days after approval of any application for progress or final payment. C. Approval of Progress Payments 1. Promptly on disapproval of all or any portion of a payment request, Owner shall provide to Contractor written notice of denial identifying for each line item denied: (1) The amount withheld, (2) The Defect or reason for withholding, (3) The remedial action required to cure the Defect, and (4) Documentation needed to reestablish an obligation of Owner for payment. Within 7 calendar days after Contractor cures the Defect and provides appropriate documentation that is approved by Owner's Representative, Owner shall pay Contractor within 5 calendar days for the value of line items thus approved. As required by law, this draw schedule is on a separate sheet of paper and is signed by both Owner and Contractor. Page 13 ______________________________ ________________ (Owner's Signature) (Date) ______________________________ ________________ (Contractor's Signature) (Date) Page 14 Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(a) BUYER'S RISK UNDER MECHANICS' LIEN LAWS Unless your builder pays each subcontractor, materialman, or supplier, the subcontractor, materialman, or supplier may become entitled to place a lien against your property in order to ensure payment to the subcontractor, materialman, or supplier for services rendered or goods delivered on or to your home. This could mean that your home could be sold to satisfy the lien. Your builder is required by law to give you periodic reports that list the subcontractors, suppliers, and materialmen who have provided more than $ 500 of goods or services to your custom home, and indicate whether they have been paid. If at any time you have any questions or concerns about whether a subcontractor has been properly paid you should discuss them with your builder, your subcontractor, and your financing institution." ______________________________ ________________ (Owner's Signature) (Date) Page 15 Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(b)(3) CERTIFICATION BY BUILDER Contractor hereby certifies that to the best of my knowledge, both I and any business entity in which I had an ownership interest in excess of 51 percent HAVE NOT: Been adjudged liable for a final judgment in connection with a custom home contract, which judgment currently remains unsatisfied. ______________________________ ________________ (Owner's Signature) (Date) ______________________________ ________________ (Contractor's Signature) (Date) Page 16 Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(b)(4) CERTIFICATION BY BUILDER Contractor hereby certifies that, to the best of my knowledge, the information provided below includes all instances in which I or any business entity in which I had an ownership interest in excess of 51 percent HAVE: Within the past 3 years been adjudged by a court of competent jurisdiction in Maryland to have failed to comply with any provision of the Custom Home Protection Act or the Consumer Protection Act as it applies to the construction of a new home. Adverse adjudication(s) include the following: ______________________________ ______________________________ ________________ (Owner's Signature) (Date) ______________________________ ________________ (Contractor's Signature) (Date) Page 17 Notice in Compliance with Maryland's Custom Home Protection Act Section 10-506(c) ESCROW ACCOUNT REQUIREMENT Unless your contract is financed by a mortgage issued by a federally chartered financial institution or a financial institution supervised under the Financial Institutions Article of the Annotated Code of Maryland, or unless all deposits, escrow money, binder money, or any other money paid in advance, or is paid to the licensed real estate broker, to be held in the escrow account of the broker, Maryland law requires that all consideration exceeding 5 percent of the total contract price which is paid by a buyer to a custom home builder in advance of the completion of the custom home shall be deposited in an escrow account and paid out of that account only for certain purposes specified by law. To ensure this, the law requires that your builder may only accept such payment in the name of the escrow account. Thus, you should make out your check to Contractor escrow account". Records of payments out of this account must be carefully maintained by your builder, and the builder must permit you reasonable access to escrow account records. Your builder, however, may choose to establish a separate escrow account for your project which will require your signature for any withdrawals. ______________________________ ________________ (Owner's Signature) (Date) Page 18 Disclosure Required by Maryland Real Property Code Annotated Section 10-607 and Code of Maryland Regulations Section 09.01.09.03 Maryland law allows a builder who participates in a new home warranty plan to offer the warranty to the buyer at the buyer's option. A builder who proceeds in this fashion must make the following disclosure as part of the contract for sale or construction of a new home. Builders of new homes, in the State of Maryland, are required to be registered with the Consumer Protection Division of the Office of the Attorney General unless they build new homes exclusively in Montgomery County. In that case, they are required to register with the Montgomery County Office of Consumer Affairs. I have decided to allow the buyer the option of obtaining a new home warranty. If the buyer decides not to have the builder obtain the new home warranty, the buyer may be afforded only certain limited warranties as provided by law. The buyer may decide to waive the right to a warranty, if this decision is solely the decision of the buyer. A builder cannot ask a buyer to sign a waiver of the right to have a warranty. A builder cannot refuse to build a new home for a buyer because the buyer decided to ask for a warranty. If the buyer asks for a new home warranty, the builder must provide the warranty. The nature and extent of the warranty that would be provided to the buyer is as follows: Contractor is a participant, in good standing, with the following plan: Name of Security: ______________________________ Plan: ______________________________ Phone: ______________________________ The home located at the following address is eligible for and will be enrolled in the new home warranty security plan: Address: ______________________________ Address: ______________________________ City: ______________________________ , Maryland Zip: ___________ The plan provides the following coverage: Minimum warranty coverage -- One year--free from any defects in material and workmanship Two years--free from any defect in the electrical, plumbing, heating, cooling and ventilating systems, except that the following appliances, fixtures and items of equipment are only covered for the length and scope of the warranty offered by the manufacturer: Item: ______________________________ Length of Warranty: ______________________________ Item: ______________________________ Length of Warranty: ______________________________ Five years--free from any structural defects Other express warranties provided: Items excluded under this warranty plan: Damage to real property that is not part of the home covered by the warranty or that is not included in the purchase price. Page 19 Bodily injury or damage to personal property. Any defect in material supplied or work performed by anyone other than the builder or the builder's employees, agents, or subcontractors. Any damage that the owner has not taken timely action to minimize or for which the owner has failed to provide timely notice to the builder. Normal wear and tear or normal deterioration. Insect damage, except where the builder has failed to use proper materials or construction methods designed to prevent insect infestation. Any loss or damage that arises while the home is being used primarily for nonresidential purposes. Any damage to the extent it is caused or made worse by negligence, improper maintenance, or improper operations by anyone other than the builder or the builder's employees, agents, or subcontractors. Any damage to the extent it is caused or made worse by changes in grading of the ground by anyone other than the builder, the builder's employees, agents, or subcontractors. Any loss or damage caused by acts of God. I must provide a copy of the warranty plan to the buyer at the time of the contract for sale or construction of the new home. To the extent that the warranty documents provide lesser protection to the buyer than State law, State law prevails. Maryland law requires me to either disclose any actual knowledge that I have of any hazardous or regulated materials which are present on the site of the new home or to state that I am making no representations or warranties as to whether any hazardous or regulated materials are present on the site of the new home. I have actual knowledge that the following hazardous or regulated materials are present on the site of the new home: ______________________________ The buyer has read and understands the above disclosure. ______________________________ ________________ (Signature of Buyer) (Date) ______________________________ ________________ (Signature of Buyer) (Date) ______________________________ ________________ (Signature of Builder) (Date) Waiver of Warranty Right Owner has read and understands the above information and wishes to waive the right to a new home warranty. The buyer further understands that the buyer can change the buyer's mind and can request a warranty by completing the Rescission Clause for Waiver of Warranty Right attached to this contract and by delivering it to Contractor within 3 working days from the date the buyer signed this contract. ______________________________ ________________ (Signature of Buyer) (Date) ______________________________ ________________ (Signature of Buyer) (Date) Page 20 Notice in Compliance with Maryland Real Property Code Annotated Section 10-607(c) and Code of Maryland Regulations Section 09.01.09.03 - Rescission Clause for Waiver of Warranty Right The buyer has decided to rescind the waiver or warranty right and to obtain the warranty coverage described in detail in the contract. The buyer understands that the cost to obtain the warranty will be $ ___________ . The buyer requests that the builder register the new home located, or to be built, at: Address: ______________________________ Address: ______________________________ City: ______________________________ , Maryland Zip: ___________ with the builder's new home warranty security plan. ______________________________ ________________ (Signature of Buyer) (Date) Page 21 Insulation Disclosure (In Compliance with 16 CFR Section 460) Contractor makes the following disclosures in compliance with 16 Code of Federal Regulation Section 460. The Project includes installation of the following thermal insulation: Exterior wall insulation Material type: ______________________________ Thickness of insulation: ______________________________ R-value of that thickness: ______________________________ Approximate coverage area in square feet: ______________________________ Floor insulation Material type: ______________________________ Thickness of insulation: ______________________________ R-value of that thickness: ______________________________ Approximate coverage area in square feet: ______________________________ Loose fill ceiling insulation Type of insulation: ______________________________ Initial installed thickness of insulation: ______________________________ Minimum settled thickness of insulation: ______________________________ R-value of that thickness: ______________________________ Approximate coverage area in square feet: ______________________________ Estimated number of bags to be used: ______________________________ Coverage area includes framing members but not doors, windows or other large openings in the exterior frame. R-values may be less where building components limit placement of insulation. For example, it may not be possible to place insulation at building corners, at fireplaces and around the perimeter of doors and windows. Listed R-values are based on information supplied by the insulation manufacturer. Contractor may have to substitute other materials but will maintain the R-values described here. Page 22 NOTICE OF RIGHT TO CANCEL UNDER REGULATION Z (12 CFR 226.15(b) requires that each owner receive two copies of this notice.) To: Owner Re: Your right to cancel Project You are entering into a transaction that will result in a security interest being placed on your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) The date of the transaction, which is __________________________ , or (2) The date you receive your Truth in Lending disclosures, or (3) The date you receive this notice of your right to cancel. If you cancel this transaction, the security interest is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the security interest on your home has been cancelled, and we must return to you any money or property you have given us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. How to cancel: If you decide to cancel this transaction, you may do so by notifying us in writing at: Contractor's Name: __________________________ Address: __________________________ Address: __________________________ City: __________________________ State: ___________ Zip: ___________ __________________________ You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of __________________________ (midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ______________________________ ________________ Signature Date See the next page for important information about what happens if this agreement is cancelled. Page 23 Notice Required by 12 Code of Federal Regulation Section 226.15(d), Effects of Rescission (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge. (2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest. (3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer's option, tender of property may be made at the location of the property or at the consumer's residence. Tender of money must be made at the creditor's designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer's tender, the consumer may keep it without further obligation. Page 24 NOTICE OF RIGHT TO CANCEL UNDER REGULATION Z (12 CFR 226.15(b) requires that each owner receive two copies of this notice.) To: Owner Re: Your right to cancel Project You are entering into a transaction that will result in a security interest being placed on your home. You have a legal right under federal law to cancel this transaction, without cost, within three business days from whichever of the following events occurs last: (1) The date of the transaction, which is __________________________ , or (2) The date you receive your Truth in Lending disclosures, or (3) The date you receive this notice of your right to cancel. If you cancel this transaction, the security interest is also cancelled. Within 20 calendar days after we receive your notice, we must take the steps necessary to reflect the fact that the security interest on your home has been cancelled, and we must return to you any money or property you have given us or to anyone else in connection with this transaction. You may keep any money or property we have given you until we have done the things mentioned above, but you must then offer to return the money or property. If it is impractical or unfair for you to return the property, you must offer its reasonable value. You may offer to return the property at your home or at the location of the property. Money must be returned to the address below. If we do not take possession of the money or property within 20 calendar days of your offer, you may keep it without further obligation. How to cancel: If you decide to cancel this transaction, you may do so by notifying us in writing at: Contractor's Name: __________________________ Address: __________________________ Address: __________________________ City: __________________________ State: ___________ Zip: ___________ __________________________ You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below. Keep one copy of this notice because it contains important information about your rights. If you cancel by mail or telegram, you must send the notice no later than midnight of __________________________ (midnight of the third business day following the latest of the three events listed above). If you send or deliver your written notice to cancel some other way, it must be delivered to the above address no later than that time. I WISH TO CANCEL. ______________________________ ________________ Signature Date See the next page for important information about what happens if this agreement is cancelled. Page 25 Notice Required by 12 Code of Federal Regulation Section 226.15(d), Effects of Rescission (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge. (2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest. (3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer's option, tender of property may be made at the location of the property or at the consumer's residence. Tender of money must be made at the creditor's designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer's tender, the consumer may keep it without further obligation. Page 26 Change Order Agreement Today's Date ___________________ Original contract date ___________________ Job Address ___________________ Original contract price $ ___________________ Job Address ___________________ Sum of previous changes $ ___________________ City, ST, ZIP ___________________ Cost of this change $ ___________________ Contractor ___________________ Revised contract price $ ___________________ Description of this change ___________________ A. Material and supplies cost: $ ___________________ B. Taxes and fees $ ___________________ C. Direct labor: $ ___________________ D. Indirect labor costs: $ ___________________ E. Equipment and tools: $ ___________________ F. Subtotal: ........................................................................ $ ___________________ G. Overhead at ___________ % of line F: $ ___________________ H. Subcontracts: $ ___________________ I. Overhead at ___________ % of line H: $ ___________________ J. Subtotal: ............................................................................ $ ___________________ K. Profit at ___________ % of lines F and J: $ ___________________ L. Subtotal: ............................................................................ $ ___________________ M. Total cost, lines F, J and L: Add Deduct $ ___________________ N. Items specifically excluded from this change: ___________________ Q. This proposal is valid for ___________ days. R. We require ___________ days extension of the contract time. We are proceeding with this work per your authorization. Please return a signed copy of this agreement as your acknowledgment of this change. This Change Order incorporates by reference the terms and conditions of the original contract and all change orders approved prior to the acceptance of this agreement. This Change Order is accepted by_____________________________ Date________________ Page 27