Saturday, December 12, 2015

Maryland Home Improvement Laws protect homeowners, not contractors.

On December 11, 2015 we obtained a trial judgment favoring our client against a negligent home improvement contractor. The court's logic in awarding judgment predicts a new wrinkle in Maryland law governing the relationship between homeowners and the home improvement contractors they hire.

In our case, the home improvement contractor had a Maryland Home Improvement license. This is an absolute requisite to performing home improvements. Without a home improvement license the contractor may not enforce a contract against the homeowner. The unlicensed contractor will also be open to criminal prosecution by the Office of the Attorney General.

This is the well settled law in Maryland, since 1970.

But what if, as in our case, a licensed contractor hires unlicensed sub-contractors? There is no reported Maryland decision directly on this set of facts.

We believe the correct analysis is that the homeowner always wins, and that the licensed contractor may not enforce a contract where he has hired unlicensed sub-contractors to do his work. This is consistent with several provisions of the Maryland Home Improvement Commission regulations, and with recent cases.

For example, in a 2012 reported case, the Maryland  Court of Special Appeals refused relief to a licensed contractor that was defending a lawsuit by an unlicensed sub-contractor. Relying on laws saying sub-contractors must be licensed, the contractor had refused to pay for work done by the unlicensed sub-contractor.  The court rejected this position for a very simple reason--

Maryland's Home Improvement Laws exist to protect homeowners, and not contractors.

In the case involving the licensed contractor against the unlicensed sub-contractor, the appellate court said the protections normally afforded homeowners are not available.

And so, in our own case, the trial court refused to enforce the contract of the licensed home improvement contractor against our homeowner client because of the unlicensed sub-contractor. But the licensed contractor remained responsible to pay for our client for the damages it caused to our client's home.

While this case turned out correctly for our client, we do expect that this type of case will eventually percolate to the Maryland Court of Special Appeals. Once there, we also believe the appellate court will close the gap in the case law to more clearly protect the homeowner.

But if you are having home improvement work done, make sure your main contractor is licensed, and make sure that every one of his sub-contractors is also licensed by the Maryland Home Improvement Commission.

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