Legal Question in Real Estate Law in Maryland

Re: Builder received an Award through Arbitration

Generally, you can't challenge an arbitration award because it's wrong. Also, if the builder got to keep your deposit as liquidated damages, he does not have to show actual damages, and the fact that he sold the property for the same or more and has no actual damages would not bar the liquidated damages remedy. Given that, and given that you initiated the arbitration, I doubt you would be successful at trying to vacate the award unless you can show either actual fraud (like bribery or undue influence on the arbitrator), or a serious procedural problem with the arbitration (refusing a necessary continuance or refusing to admit critical testimony/evidence).

Re: Builder received an Award through Arbitration

It's extremely unlikely that you will be able to prevent the court from enforcing the arbitration award. The whole purpose of arbitration is to resolve a case outside of the court system, thereby saving money and time for the parties. Unless the arbitration proceeding didn't comply with the rules of the proceeding or there were some other irregularities, the court will enforce it. Otherwise, arbitration would be a meaningless procedure. You were in all likelihood told by the arbitrator at the beginning of the hearing that his/her decision was binding and enforceable in court if not complied with by the losing party.

The arbitration award was probably pursuant to a liquidated damages clause in your contract. You didn't explain, but I assume the note was part of the deposit. Liquidated damages clauses are put in builder contracts by the builders to avoid having to prove actual damages, which in this case may well have been none if the resale was for at least your price. Typically this clause says that if the buyer defaults the builder can keep the deposit as liquidated damages, and usually goes on to say that it cannot be construed as a penalty, because courts have held in legal decisions that if the liquidated damages are too much they can be construed to be a penalty and thereby unenforceable in court.

If you still want to challenge this, you have to file an answer admitting or denying the allegations in the complaint, paragraph by paragraph. You can add any defenses you think you have to the answer.

Re: Builder received an Award through Arbitration

The short answer is that you have no defenses to a petition to confirm an arbitration award unless you have a claim that the award was procured through fraud. It sounds like you just lost after the hearing and so the award will be final and binding and nonappealable. If you continue to try to defend the claim you may be exposed to liability for additional attorney's fees by the builder.

You may want to try to negotiate a payment plan or for a lower amount lump sum - depending on your asset situation, the builder may go for it.