Homeowners who have shoddy work done by contractors will be able to get their money back through a state-guaranteed home improvement fund, under legislation enacted this month by the Maryland House of Delegates.
The House approved the Senate bill 107 to 13.
"A very large number of people are being ripped off every year," said Del. Frederick Rummage (D-Prince George's), chairman of the House Economic Matters Committee that approved the bill.
Only 44 percent of homeowners who filed claims against contractors for improperly done repairs have received total compensation through the current bonding requirement, according to testimony during Senate hearings.
Current law requires bonding agents to cover up to $5,000 in claims for each contractor. Contractors now pay about $100 to bonding agents. But that system has been found to be inadequate because some contractors have claims totaling thousands of dollars against them, leaving homeowners with little recourse for monetary relief.
The new legislation would phase out the bonding requirement in two years and set up a guaranteed fund into which the state's 10,000 licensed contractors would have to pay $50 annually.
Homeowners could recover up to $10,000 from contractors through the fund. The fund would cover each contractor for up to $50,000 worth of claims from separate homeowners.
And if the fund fell below $250,000 in a given year, each contractor could be assessed an additional $50.
A FEDERAL GRAND JURY in Roanoke has indicted employes of the second-largest mobile home manufacturer in the country on charges of padding invoices of homes sold to veterans applying for government loans.
Conner Homes Corp. of Newport, N.C., which faces possible fines of $302,000 and prison terms for 15 of its employes in North Carolina and Virginia, is the sixth mobile home manufacturer to be netted in a Veterans Administration investigation into invoice padding that started last summer.
Last month, Billy Carter, brother of the former president, entered a guilty plea of one count of invoice padding for his company, Scott Housing Systems Inc. of Waycross, Ga. The company has agreed to pay a $10,000 fine and $40,000 in restitution money to the VA, federal officials said.
Robert A. Hincken, assistant inspector general of investigations for the VA, said this week that approximately 75 of the industry's 130 manufacturers have been cited in the investigation, and he predicted that dozens of additional indictments will be handed down in the next few months.
"This has been a common, widespread practice," he said. "We are cracking down hard."
PUBLIC REAL ESTATE SECURITIES outperformed stocks, bonds and Treasury bills from 1971 through 1983, yielding a before-tax real rate of return of 9 percent, according to the Questor Real Estate Syndication Handbook for 1984, published by Stephen Roulac & Co. of San Francisco. The after-tax rate of return for a 50 percent-bracket investor was 17.2 percent, Roulac reported.
However, performance among funds varied considerably. The report tracked 38 public real estate funds that had sold all their properties as of the end of 1983. Rates of return varied from 5 percent to 33 percent. Funds begun after 1978 were not included because of their short holding period, Roulac said.
By comparison, alternative investments such as stocks and bonds "essentially delivered negative real rates of return over the last 12 years," Roulac said.
THE SUBURBAN MARYLAND Building Industry Association, a builders group, is offering a free course on how to buy a home. It will cover such topics as taxes, qualifying for a mortgage, the elements of sales contracts, closing and closing costs. The course will be held the evening of April 23 at the SMBIA offices in Beltsville. For information and reservations, call 572-5900.
PERSONNEL FILE . . . The National Association of Real Estate Investment Trusts has named Mark O. Decker executive vice president. He comes to the association from the Petroleum Marketers Association of America, where he was vice president for policy and legislative affairs . . . Suzanne Paciulli, former president of the Fairfax County Chamber of Commerce, has joined Mt. Vernon Realty as head of its commercial and land division. At the same time, the firm announced it has named Robb Cohen to head its new homes division . . . Floyd L. Williams has been named tax counsel of the government affairs division of the National Association of Home Builders . . . The National Corp. for Housing Partnerships has named James M. Cluett senior vice president for joint ventures . . . William B. Fetsch, of Edw. R. Carr & Associates, has been elected president of the Northern Virginia chapter of the National Association of Industrial and Office Parks . . . Richard R. Solem, of the Equity Fund Group, has been elected president of the Maryland, Delaware and District of Columbia chapter of the Real Estate Securities and Syndications Institute . . . The Fairfax County Housing and Redevelopment Authority has elected John J. Castellani chairman and James H. Wentzel vice chairman . . . F. Barton Harvey III has been elected deputy chairman of the Enterprise Foundation and to the boards of directors of the foundation and the Enterprise Development Co. . . . James E. McGrath has been appointed vice president for leasing at the Mason Hirst Cos. . . . Dini Sterngold has been named staff vice president for membership at the Building Owners and Managers Association International . . . Promoted to assistant vice president at Smithy Braedon were Robert D. Priest, Gary A. Faigen and Willard O. Freeman . . . The Realty Capital Group has appointed Marc Ohden as vice president and cash manager, Kristin A. Tetsworth, manager of income property lending, and Susan L. Bremmerman, manager of administration . . . Carroll J. Jaskulski Jr. has been named vice president of the sales and marketing division of J. E. Robert Co. . . . Michael Power has joined Rouse & Associates, with responsibility for the firm's expansion into Anne Arundel County . . . John A. Kapp, Marvin Hill and Patricia Bye Smith have been named vice presidents of Mark Vogel Associates Inc. and Mark Vogel Cos., and J. Michael Coburn has been named director of development for Mark Vogel Cos. . . . Nancy Gossard has been named manager of Long & Foster's 66th branch office, in Odenton . . . J. Christopher Smith has become vice president for administration at Frank S. Phillips Inc. . . . Costain Washington Inc. has named Thomas E. West director of marketing . . . Frank Schaffer is the new manager of Hugh T. Peck Properties' Beltsville/College Park office, and Milton Simmons has taken over the same post at the firm's Andrews-Camp Springs office.