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State fund can assist owners after poor repairs


An unhappy homeowner had a fire in January 2003.

An independent insurance adjuster gave the homeowner the name of a contractor to repair the damage. The homeowner used $63,000 of fire insurance proceeds to pay for the repairs.

The fire damage was supposed to be repaired by April 30, 2003, but it was not. The homeowner and her family lived in temporary housing until July 2. When they returned to the home, the repairs were not completed the way the homeowner expected.

The homeowner complained to the Maryland Home Improvement Commission, which apparently awarded compensation. But the homeowner thinks it was insufficient and wants to know if she has any other recourse.

The Maryland Home Improvement Commission administers a Guaranty Fund.

Homeowners may claim recovery from the Guaranty Fund for the cost of restoration, repair, replacement or completion that arise from an inadequate or incomplete home improvement by a licensed contractor or subcontractor. The maximum recovery from the fund is $15,000 a person for the acts or omissions of one home improvement contractor.

An award by the Guaranty Fund does not limit your ability to sue the contractor for failing to live up to the repair contract. You also can sue subcontractors who did faulty work or used substandard materials. Another potential issue is whether the insurance adjuster was negligent in recommending the contractor who handled the repairs to your home.

But if you sue the contractor and recover money, you must first use it to repay the Home Improvement Commission for any money paid to you from the Guaranty Fund. Once the Guaranty Fund has been reimbursed, you can keep the excess recovery, if any.

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