Section 10-301 - Escrow accounts, surety bonds or irrevocable letters of credit to be maintained by vendor or builder receiving deposit.
§ 10-301. Escrow accounts, surety bonds or irrevocable letters of credit to be maintained by vendor or builder receiving deposit.
(a) When required.- If, in connection with the sale and purchase of a new single-family residential unit which is not completed at the time of contracting the sale, the vendor or builder obligates the purchaser to pay and the vendor or builder receives any sum of money before completion of the unit and grant of the realty to the purchaser, the builder or vendor shall:
(1) Deposit or hold the sum in an escrow account segregated from all other funds of the vendor or builder to assure the return of the sum to the purchaser in the event the purchaser becomes entitled to a return of the sum;
(2) Obtain and maintain a corporate surety bond in the form and in the amounts set forth in § 10-302 of this subtitle, conditioned on the return of the sum to the purchaser in the event the purchaser becomes entitled to the return of the money; or
(3) Obtain and maintain an irrevocable letter of credit issued by a Maryland bank in the form and in the amounts set forth in § 10-303 of this subtitle.
(b) Maintenance until certain events.- The vendor or builder shall maintain the escrow account, surety bond, or irrevocable letter of credit until the happening of the earlier of:
(1) The granting of a deed to the property on which the residential unit is located to the purchaser;
(2) The return of the sum of money to the purchaser; or
(3) The forfeiture of the sum by the purchaser, under the terms of the contract of sale relating to the purchase of the residential unit.
[An. Code 1957, art. 21, § 10-301; 1974, ch. 12, § 2; 1976, ch. 272; 1985, ch. 732; 1987, ch. 309; 1989, ch. 563; 1995, ch. 58, § 2; 1998, ch. 144.]