Legal Question in Real Estate Law in Maryland

Can a builder charge you extra fees if you do not settle on the specific date

I am in the process of buying a house. I was suppose to go to settlement on 2/28/01, but when the loan officer pulled my credit report, a collection account that was paid 3 years ago showed as me still owing on the account. needless to say, I did not go to settlement on that day. The builder wants me to sign an addendum to the contratct of sale charging me $65.00 a day until I can resolve this issue. Can the builder do that? He states that if I do not sign the addendum, I can not go to settlement and he will forfeit all of my money. Please advise.


Asked on 3/19/01, 11:48 am

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Re: Can a builder charge you extra fees if you do not settle on the specific dat

You must refer to the contract to determine the builder's ability to do this. If the contract required you to settle by 2/28 or risk losing your earnest money, the builder can enforce that provision. This means he can refuse to extend the settlement period and forfeit your deposit. He's trying to give you extra time, but wants you to pay what amounts to a daily interest charge on the money he would have received had the settlement taken place as scheduled.

The real culprit here may be your lender or the title company for not detecting the problem early enough to have it corrected in time for the settlement deadline. You didn't provide enough information to really give a definitive answer to this question. Also, you didn't say whether the information on the credit report is accurate or not; if not, you may have a complaint against the credit reporting agency.

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Answered on 5/25/01, 4:48 pm


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