Md. Code Regs. 05.04.08.13

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.04.08.13 - Contractor Requirements

A. General Requirements. All contractors and subcontractors:

(1) Shall be licensed by the State, the local political subdivision, or the Maryland Home Improvement Commission, as applicable, to do the work required under the contract;

(2) Shall be qualified to do business in Maryland;

(3) Shall be able to demonstrate to the satisfaction of the Department the ability to complete the rehabilitation work, which evidence may include previous professional rehabilitation experience;

(4) May not be suspended or debarred from the Department's programs pursuant to any action under COMAR 05.01.05;

(5) Shall agree in the contract to:

(a) Perform all work:

(i) In conformance with the contract and all applicable laws, local codes, and Departmental rehabilitation standards, whether or not covered by the work write-up and drawings for the work, and

(ii) In a competent, workmanlike manner, equal to the standards of the industry;

(b) Comply with all applicable laws, ordinances, and regulations relating to the protection and safety of persons or property;

(c) Furnish all labor, materials, and equipment, and obtain all licenses, permits, insurance coverage, and workers' compensation as may be required to complete the rehabilitation;

(d) Not assign the contract without prior written consent of the owner and approval of the local administrator;

(e) In addition to all remedies and guarantees provided by law, and at the contractor's expense, make all necessary repairs, replacements, and corrections of any nature or description, interior or exterior, structural or nonstructural, as shall become necessary by reason of faulty workmanship or material, which appear within:

(i) 1 year from the date the notice of completion is filed,

(ii) A longer period if any longer guarantee period is specified for any particular materials or workmanship under the plans and specifications, under a subcontract, in connection with any manufactured unit which is installed in the structure, or

(iii) A longer period, if Maryland law so provides;

(f) Complete all specifications of the proposal within the completion date, which may not exceed 12 months from the date of the loan closing unless a longer period is approved in writing by the Department;

(6) Shall indemnify and hold the Department harmless from all liability and loss because of injury to or death of a person or damage to any property which may occur or be alleged to occur during performance of the contract as a direct or indirect result of any act or omission, whether intentional, negligent, or otherwise, by the contractor, subcontractors, or their agents, servants, and employees, and defend all suits or claims involving the above at its sole cost and expense.

B. Minority Contractors.

(1) The Department encourages the use of minority contractors for all projects in all jurisdictions, and requires compliance with the Department's Minority Business Participation Plan for all projects with rehabilitation contract costs of $200,000 or more.

(2) Copies of the Department's plan shall be made available to sponsors and contractors.

C. Identity of Interest.

(1) Borrowers may not act as their own general contractors.

(2) Sheltered housing sponsors may act as general contractors only with the prior written approval of the local administrator. Application forms will be provided upon request and shall be submitted and approved before submission of the proposal. Approval shall be conditioned on an assurance of completion acceptable to the Department.

(3) An owner-occupant may not act as general contractor.

D. Assurance of Completion. For loans in excess of $50,000, either the Department or the local administrator, in its sole discretion, may require:

(1) 100 percent performance and 100 percent payment bonds;

(2) A letter of credit in the amount of 25 percent of the rehabilitation contract cost, and an assurance of completion agreement; or

(3) Other assurances of completion acceptable to the Department.

E. In order to be binding, all communications between the contractor and the owner concerning the content or performance of the contract shall be in writing.

F. Contractors performing work financed by a Program loan:

(1) May not be on the unacceptable risk determination list of the Department of Housing and Urban Development or the Farmer's Home Administration;

(2) May not be disbarred or suspended pursuant to COMAR 05.01.05 as amended from time to time; and

(3) Shall have performed all previous work financed by the Program in a manner satisfactory to the Director.

G. Code Compliance. The Department or local administrator's preparation or approval of work write-ups, evaluation of the property, and review and approval of plans and specifications are for the benefit of the Department only. These actions are not intended to substitute for or ensure compliance with appropriate State and local building codes. Compliance with applicable codes and obtaining required permits and licenses are the responsibility of the borrower and contractor.

Md. Code Regs. 05.04.08.13

Regulations .13 adopted as an emergency provision effective August 28, 1986 (13:20 Md. R. 2190); emergency status extended at 14:2 Md. R. 123
Regulations .13 repealed and Regulations .13 adopted effective June 7, 1993 (20:11 Md. R. 912)
Regulations .13 adopted effective March 1, 1987 (14:4 Md. R. 413)