BUILDING in Maryland and Washington, DC

EXCLUSIVE MAGAZINE OF THE MARYLAND-NATIONAL CAPITAL BUILDING INDUSTRY ASSOCIATION

MAR/Apr 2012

Homebuilding Trends in a Reviving Market Also in this Issue: Community Service Award Winners

Maryland-National Capital Building Industry Association 1738 Elton Road, Suite 200 Silver Spring, MD 20903 Phone: (301) 445-5400, Fax: (301) 445-5499 E-mail: communications@mncbia.org Website: www.mncbia.org 2012 Executive Committee Steve Nardella President

Frank Bossong, IV Associate Vice President

Rick Bailey Vice President/Calvert Co.

Clark Wagner Treasurer

Doug Meeker Vice President/Charles Co.

Dave Lunden Vice President, State Legislative/Secretary

Robert J. Spalding Vice President/Montgomery Co.

BUILDING

IN MARYLAND AND WASHINGTON, DC Representing Calvert, Charles, Montgomery, Prince George’s and St. Mary’s counties in Maryland and Washington, DC

FEATURES

Robert R. Harris Life Director

Hillary Colt Vice President/ Prince George’s Co.

Martin J. Mitchell Immediate Past President

Mike Mummuagh Vice President/St. Mary’s Co.

Stephen P. Elmendorf Legal Counsel

Brian “A.J.” Jackson Vice President/Washington DC

Diane K. Swenson Executive Vice President

2012 Board of Directors

Howard Katz David Little Mark MacFarland Tom Marshall Jim Plazak Steve Robins Gary Rubino Michael Schueler Charlene Thayer Peggy White Mel Willis Carter Willson

Lynn Elahi Brian Afnan Hugh Carroll Jeff Caruso Chuck Covell Mike Conley Tony Crane Timothy Dugan Ken Dunn Mary Giles Tom Hudson Tom Hyde Robert A. Jacobs

MNCBIA Staff

Executive Vice President Diane K. Swenson, CAE Vice President, Government Affairs F. Hamer Campbell, Jr.

Mar/Apr 2012

8 Homebuilding Trends in a Reviving Market

11

1 1 Home Builders Care Foundation Honors Community Service Award Winners 12 2012 Leadership Team Takes Office 1 2 Fun & Fundraising at BIA’s Winter Ball

12

DEPARTMENTS

Associate Director/Government Affairs Robert Kaufman

6 A Message from the President

Associate Director/Regulatory Affairs Annette Rosenblum

15 The Legal Pad

Communications Director Kelly H. Grudziecki

16 The Engineer’s Angle

Director, Membership/Events Jean Mathis

17 MNCBIA Membership News

Manager, Builders Development Guaranty Group Lisa S. Goheen Director, Home Builders Care Foundation/HomeAid DC Patti Kane

Published for: Maryland-National Capital Building Industry Association 1738 Elton Road, Suite 200 Silver Spring, Maryland 20903 301 445-5400 Fax: 301 445-5499 E-mail: building@mncbia.org Website: www.mncbia.org

MNCBIA’s Most Wanted List

12

STARS Club New Members 18 Events Calendar Index of Advertisers

Published by:

E&M Consulting, Inc. 80 West 78th Street, Suite #230 Chanhassen, MN 55317 800-572-0011 Fax: 952-294-9944 Website: www.emconsultinginc.com Published February 2012 MNC-S0210/9844

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

5

FROM THE PRESIDENT

The Results are in – The American Dream is Still Alive

A

Steve Nardella

s we move through the New Year and implement plans for 2012 we look forward to gaining momentum in the local housing market that will positively impact our builder and associate members. This momentum and the confidence it can create will be influenced by the proposals and actions of government leaders at the local, state and federal levels and on the messages of the candidates and outcome of the presidential election to be held in November.

As the market strives for recovery, long-held principles about housing have come under intense scrutiny and some policymakers are even suggesting that homeownership should no longer be a national priority. This is in direct opposition to the beliefs of most Americans, according to a recent national survey conducted jointly by Public Opinion Strategies of Alexandria, VA, and Lake Research Partners of Washington, DC, on behalf of the National Association of Home Builders.

The survey of likely 2012 voters was conducted in early January and it is clear that voters see homeownership as fundamental to the American Dream. Despite the broad loss of value and equity and the large number of owners who have been impacted by foreclosure, a short sale or remain underwater, a vast majority (74 percent) say that owning a home is the best long-term investment they can make and worth the ups and downs of the market. Americans believe that homeownership provides stability for families and communities and creates jobs and a stronger economy.

Because of these important messages, I thought it relevant to summarize a few highlights of the survey results.

• 96 percent of home owners are happy with their decision to own and 84 percent, who are “underwater,” owing more on their mortgages than their home is worth, expressed the same sentiment.

• Three out of four voters – both owners and renters – believe it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership.

• Two-thirds of respondents say that the federal government should help home buyers to afford a long-term or 30-year, fixed-rate mortgage.

• 68 percent of voters say they would be less likely to vote for a congressional candidate who proposed to abolish the mortgage interest deduction, a figure that was virtually identical across all party affiliations (69 percent of Independents and 68 percent of Democrats and Republicans).

• 68 percent who are not currently home owners say it is a goal of theirs to eventually buy a home.

• Job uncertainty and saving for a down payment and closing costs are the biggest barriers to buying a home.

The nation’s very successful housing and homeownership policies over the last century have contributed greatly to personal financial growth and positive fiscal impact to our communities and should far outweigh the shorter term financial challenges that we have witnessed over the recent past few years.

6

MAR/APR 2012 |

BUILDING IN MARYLAND AND WASHINGTON, DC

Yet, some of the more onerous financial proposals being considered at the federal level that would derail any opportunity for market stability and steady recovery and are counter to the main barriers to buying a home as identified in the survey include; • Eliminating the Mortgage Interest Deduction • Abolishing Fannie Mae and Freddie Mac who provide affordable, stable access to mortgage financing • Mandating Minimum 20 Percent Down payments Closer to home, The Maryland State Builders Association (MSBA) also released a new poll showing continued public support for job creation and an overall desire for representatives of State Government to focus primarily on taking steps to rebuild Maryland’s economy. The poll was conducted by Gonzales Research & Marketing Strategies in January 2012 of registered voters in Maryland.

The results demonstrate Marylanders’ continued concerns regarding a sluggish construction industry and its negative impact on the overall economy. Nearly 74 percent of those surveyed believe the State needs to do more to help new construction in Maryland in order to create jobs and stimulate economic recovery.

Also, the vast majority – 84 percent - believe creating jobs should be a higher priority for the Governor than taking steps to reduce Chesapeake Bay pollution. Alternatively, just 12 percent feel Governor O’Malley’s priority should be taking steps to clean up the Chesapeake Bay as opposed to job creation and economic recovery.

Again however, there are many proposals being considered at the State level that would have a negative impact on market confidence and recovery and the cost of providing housing. Some of these include: • Limiting the amount of mortgage interest deduction for Maryland homeowners; • Limiting septic development state wide and requiring approvals at the state level; • Implementing onerous watershed implementation and water resources plans that will restrict how new communities are approved and developed.

The large percentage of survey respondents both nationally and state wide who still have a positive view of housing and owning a home and of the positive economic contributions of our industry, represent a market that is ready to respond when there is a clear view of the future and some level of confidence in our government is restored in the eyes of our buyers. These strong positive messages can be used with potential prospects to help convey a sense of security and confidence about their home buying decision and with our elected officials as they struggle to prioritize their agendas. m

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

7

Homebuilding Trends in a Reviving Market

The homebuilding market is finally stirring. What will new homebuyers want as they return?

By Michael Fickes

“S

trength has returned to the close-in new home markets in Washington, DC, and Montgomery County,” says Kenneth Wenhold, regional director-Mid-Atlantic region with Metrostudy, a real estate research and consulting firm with a focus on housing. “Stronger markets will move prices up and like ripples in a pond, buyers will move further out to Prince George’s County, and then into Calvert, Charles and St. Mary’s Counties” and revive those markets as well.

Wenhold has the data to support his claim. “At the end of 2011, Montgomery County had just 3.3 months of resale inventory,” he says. “DC’s supply was down to 3.2 months. There were just over 11,000 listings in DC. The last time the supply was this small was in January of 2006.

“At the height of the recession in June of 2008, there were 25,500 listings. So listings have declined by 60 percent. That is why DC is in the forefront of the recovering housing market.”

Harris Schwalb agrees. As co-owner of McLean, VA-based Michael Harris Homes, an upper end builder with markets in Montgomery, Loudoun and Howard Counties, Schwalb believes the region has reached a housing equilibrium. “We no longer have a 24-month supply of standing inventory,” he says. “We’ve burned through it.”

So, it is time to think about what the next crop of new home customers want from homebuilders.

On the national scene, housing trends include green housing, housing for the 50+ market, transit oriented development and a continuing demand for apartments that was spawned by the recession. Also changing are home design trends and banking trends.

“I think 50+ is a great business model, but it will take time for demand to come back,” Schwalb says. “A lack of urgency is holding the market down.

“First-time buyers need to buy. They are forming households and need more room. Move-up buyers have new jobs or are looking for good schools for the kids this coming September. They have an urgent need to buy as well.

The 50+ buyers don’t need to move right now. They can wait.”

Is Green Housing A Trend? Not Yet. “I think green housing demand may be coming, but it seems to me that builders are really ahead of that market,” Schwalb says. “Of course, homebuyers want to reduce energy costs with more efficient heating and cooling. But we really aren’t seeing much demand for green features beyond those that save energy.”

Bob Youngentob, president of Bethesda-based EYA, an urban infill developer working in Washington, DC, and the close-in suburbs, believes that a green trend is in the making in his markets. “EYA is building all new housing according to LEED certification,” he says. “There is more awareness in the market today. People aren’t necessarily ready to pay for green yet, but we think that demand for sustainable housing is coming. We want to stay ahead of that.”

Mark Nosal, division vice president with Horsham, PA.-based Toll Brothers, Inc., says transit-oriented developments in Montgomery County and Northern Virginia are seeing prices rise along with density. But the trend hasn’t yet caught on in suburbs further out from Washington, DC. “Prince George’s County has had difficulty getting started with these kinds of projects,” he adds.

Observers say that as mass transit lines in Maryland are extended, transit oriented developments will begin to develop further out. There are high hopes, for example, for Metro’s Purple Line that will connect Bethesda in Montgomery County to New Carrollton in Prince George’s County.

What About the 50+ Market?

Active adult housing took a hit during the recession, says Wenhold. Most of those buyers used equity from their previous home to buy into the market.

When home equity dropped, so did the market.

8

MAR/APR 2012 |

Transit Oriented Design: A Close-In Trend for Now “We’re seeing significant demand for close-in transit oriented housing,” says Youngentob. “We had a terrible recession starting in 2008, but business leveled out in 2010. Then in 2011, with limited competition for what we do, we had our second best year in terms of sales.”

Youngentob believes that people want to eliminate long commutes by car and are moving back to the city and close-in suburbs.

EYA’s current transit oriented buyers include 28 to 38 year old professionals. They see their rents rising while mortgage rates have remained low. “They may have married recently or moved in with a partner,” continues Youngentob. “After renting during the recession, they’ve discovered that they can get something larger for a mortgage payment about the same as the current rent payment.”

“Nationally, builders are reportedly building smaller homes for smaller home-buying budgets.”

Multifamily Trends The recession, of course, led to an explosion of multifamily apartment developments as people who lost their homes turned to renting. “The demand for apartments has been enormous,” says Wenhold. “In some areas, no apartments are available. In other areas, you can get an apartment, but rents have gone up by 10 percent to 20 percent.”

BUILDING IN MARYLAND AND WASHINGTON, DC

At the height of the housing bubble, notes Wenhold, a large number of condominium buildings were constructed but remained vacant when the recession came. A number of these buildings have converted to apartments.

“In addition, a lot of new apartment buildings are breaking ground,” he says.

“The multifamily trend is alive and kicking in this area.”

Home Design Trends What are today’s homebuyers looking for in terms of design?

Nationally, builders are reportedly building smaller homes for smaller home-buying budgets. They are scaling down kitchens and baths in these smaller, often single story, homes. At the same time, they are building in service features such as walk-in closets and laundry rooms.

“When the market slowed, new houses did get smaller,” says Wenhold. “It wasn’t so much scaling back on kitchens and baths as making the whole house smaller.

“And there were cutbacks. Builders took out the granite countertops and wood trim. The idea was to lower the cost of new homes so they could compete with the resale market. Today, however, those granite countertops are coming back.”

Toll Brothers’ Nosal says that buyers seem more interested in functionally efficient homes. “We build a lot of houses with two-story ceilings perhaps in the family room,” he says. “We always offer the option of putting living space such as another bedroom into that second story space. For years, we rarely sold that option in Prince George’s county. Buyers wanted the twostory space.”

But that’s changed. Today, buyers are opting to build another upstairs bedroom.

Nosal also reports a rising interest in in-law bedrooms made by converting a den or a bay of the garage. “Self-contained in-law bedrooms with full baths — all on the first floor — are growing in popularity,” he says.

Banking Trends Bank lending has loosened up substantially since the squeeze on funds felt by buyers and builders alike during the recession.

Maryland-National Capital Building Industry Association (MNCBIA) builders working in the DC and close-in suburban markets — the markets showing strength right now — serve relatively well-to-do buyers who report less difficulty with mortgage borrowing.

Youngentob says that while underwriting standards have tightened, most EYA buyers can afford sizeable down payments and provide excellent employment track records. Lenders trust them with mortgages.

How about acquisition, development and construction (ADC) loans for builders? The credit crunch of several years ago appears to have abated. “Underwriting for builders is more stringent, today,” Schwalb says. “But builders with strong financial statements and good projects can get financing.”

In The End, it’s the Economic Trend that Counts Do any of these trends have the potential to renew the housing market across the MNCBIA region?

“No,” says Schwalb. “Jobs generated by economic recovery create housing demand. Right now, we’re in a fragile recovery. We still need what we always need after a recession: job growth and consumer confidence.

There are definite signs of life in the housing market in our region. But we’re not there yet.”

Still, when the economy finally does start producing jobs and confidence — and it will — these are the trends that will likely interest homebuyers. m

Lot Problems While demand for new homes in the MNCBIA region appears to be recovering, builders should prepare for a thorny new problem when the recovery finally takes hold: a shortage of vacant lots.

“We survey all new residential construction including the development of lots and homes,”

says Kenneth Wenhold, regional director — Mid-Atlantic region with Metrostudy, a real estate research and consulting firm with a focus on housing. “There are fewer months of lots in supply in the State of Maryland than in San Francisco, CA. We have plenty of land, but we are politically constrained. This

is driving up lot prices, which will lead to higher home prices.”

As the market returns and housing starts increase, lack of lots will likely begin to constrain the new home market across the region. m

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

9

10

MAR/APR 2012 |

BUILDING IN MARYLAND AND WASHINGTON, DC

Home Builders Care Foundation Honors Community Service AWARD Winners

T

he Home Builders Care Foundation (HBCF) presented its’ 2011 Community Service Awards at the association’s January 26th dinner meeting. The award is presented annually to individuals or organizations affiliated with the local home building industry in recognition of significant contributions to the community through unselfish efforts and dedication in support of projects that help the poor and disadvantaged in our communities.

The first award of the evening, a Tom Sawyer Award for in-kind assistance, was presented to MidSouth Building Supply. MidSouth played a key role on a renovation project for St. Ann’s Infant and Maternity Home in Hyattsville, MD. For 150 years, St. Ann’s has cared for the poor in our Nation’s Capital.

Today St. Ann’s operates three residential programs and a community day care center and serves over 300 people each year. Their Children’s Residential Program provides care for infants and young children who have been abused, neglected, or abandoned. This past summer, Home Builders Care led a renovation of the Children’s Wing to help make the facility look and feel more like a home.

Before the renovation, there wasn’t much common space in the dorm-style wing and the kitchen dated back to 1961. Construction plans called for a wall to be knocked down and the kitchen expanded to not only improve the dining area, but also serve more as a gathering place. The bulk of the project called for new cabinets, countertops and flooring. The project received a tremendous boost when MidSouth made a key 100% in-kind donation of upgraded kitchen cabinets and countertops.

The next Tom Sawyer Award was presented to the National Football League Players Association (NFLPA), Washington, DC, former player’s chapter, a group of gentleman with whom builders have had the pleasure to work side-by-side with at St. Ann’s.

HBCF and the local NFLPA chapter came together in 2011 with Touchdown for Homes, a new nationwide charitable outreach program of the National Association of Home Builders and the NFLPA that aims to bring together local home builders’ associations and former NFL players to strengthen communities by building or renovating homes for children or families in need and veterans.

The Touchdown for Homes program launched in Washington, DC, with the St. Ann’s project and members of the former players’ chapter were excited to play a key role. As Calvin Snowden, president of the chapter who played defense for the Cardinals, Bills, and Chargers, said, “Every child and every family should have a safe, comfortable place that feels like home, whether it is temporary like here at St. Ann’s, or a permanent home to call their own.” With Spain Musgrove, a former Redskin, coordinating chapter volunteers, the players helped lay flooring, install cabinets and paint.

The Directors Award, recognizing an MNCBIA member who helps broaden the vision of Home Builders Care, was presented to Newport Partners, who helped spearhead HBCF’s first energy-retrofit project.

The project was for Sasha Bruce Youthwork, a Washington, DC, nonprofit that seeks to improve the lives of homeless, runaway and disconnected youth

HBCF President Hugh Carroll presented Dan Flynn and Bill Russell of MidSouth Building Supply with a Tom Sawyer Community Service Award. Other award recipients were Newport Partners, the NFLPA former players DC chapter, and Miller & Smith Homes.

in the nation’s capital. Each year, over 1,500 youth and 5,000 of their family members receive shelter, transitional living, counseling and a wide range of support from Sasha Bruce.

By lending its energy expertise, Newport helped HBCF’s HomeAid Washington DC chapter obtain the first $40,000 of grant funds from a new national Environmental Sustainability Program (ESP) funded by a grant from the Walmart Foundation to HomeAid America.

The purpose of the Walmart ESP grant program to HomeAid is to retrofit existing shelter facilities with energy efficient upgrades, allowing the service providers to reduce their operating costs on energy by 40%.

In the case of Sasha Bruce’s REACH program, this amounted to $5,000 a year.

Additionally, Newport helped secure an in-kind donation of $10,000 in sophisticated monitoring equipment from the US Dept. of Energy to study the future energy use of the home after project completion.

The final award of the evening, the Community Builder Award, was presented to Miller and Smith Homes, who undertook a whole house renovation for the Community Services for Autistic Adults and Children (CSAAC) in Gaithersburg, MD. CSAAC is the largest provider in the nation to serve individuals with autism exclusively with comprehensive programs from early childhood through retirement. CSAAC homes provide individuals with an alternative to living in an institution or in their parents’ homes, and allow residents to exercise independence as adults.

The $90,000 renovation included adding a third bedroom and a third full bath. Additionally, the kitchen and two existing baths were completely redone, whole house worn-out carpeting was replaced with more durable flooring, and other improvements were made to enhance the dignity of the home. To complete the job, Miller and Smith secured the services of more than 20 subcontractors and suppliers, and in-kind donations to the tune of more than $58,000.

The cooperation, dedication and spirit of these 2011 Community Service Award Winners are excellent examples of why the Home Builders Care charitable construction program succeeds in helping end homelessness by improving the lives of at-risk individuals and families in our communities. m

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

11

2012 Leadership Team Takes Office Stephen J. Nardella, Senior Vice President of Operations for Winchester Homes Inc. in Bethesda, MD, was installed as MNCBIA’s 51st President on January 26, 2012 at the Bethesda Marriott. Richard J. Thometz, past president of MNCBIA (2002) conducted the installation.

Steve’s goals as he heads into yet another challenging year encompass a number of important factors including, enhancing the industry’s vigilance on local and state legislative and regulatory issues, broadening collaborative efforts with other industry trade groups to strengthen political initiatives and educating the public, media and elected officials on the value of housing and the many ways it contributes positively to society. m

Fun & Fundraising at BIA’s Winter Ball

T

he Winter Ball & Silent Auction remains one of MNCBIA’s most treasured events. Columbia Country Club has played host to the ball for many years and its charm and history add to the excitement of the evening. Adding to the fun this year was the return of a live band, Diamond Alley, who covered songs from practically every era and had guests of all ages on the dance floor.

Of course the gala isn’t just for merriment, it is also the site of the Home Builders Care Foundation’s silent auction, one of the charities’ biggest fundraisers of the year. All the proceeds from the auction go to support HBCF’s ongoing shelter-related community service projects. More than 33 items were up for bid this year ranging from sports and theater tickets to ski and golf packages. Thanks to the generosity of the MNCBIA members and guests who attended, the auction brought in nearly $5,000 for Home Builders Care.

A highlight of the evening was the presentation of the Joseph C. Rodgers Sr. Award for outstanding associate member of MNCBIA and the Milton E. Kettler Award for lifetime achievement. This year’s recipients were Robert R. Harris of Lerch, Early & Brewer taking home the Rodgers Award and F. Hamer Campbell, Vice President of Government Affairs for the MNCBIA winning the Kettler Award. m

12

MAR/APR 2012 |

BUILDING IN MARYLAND AND WASHINGTON, DC

EXCLUSIVE MAGAZINE OF THE MARYLAND-NATIONAL CAPITAL BUILDING INDUSTRY ASSOCIATION

JAN/FEB 2012

Steve Nardella Takes the Helm for 2012 Also in this Issue: MNCBIA Leadership Awards

2012 offers new opportunities to increase visibility and image throughout the building industry

Distribution: • General Contractors • Specialty Contractors

Maryland National Capital BIA offers the advertiser the opportunity

• Professional Associate Firms

to reach a diverse group of professionals within the building industry.

• State & Local Purchasing Offices

Our magazine is used by the individuals who constitute the bulk of the purchasing power within the building community.

• Architects • Construction Managers

The MNCBIA has advertising rates to fit

• Suppliers

everyone’s budget. Typesetting is complimentary.

• Construction Users

Each advertiser receives a FREE listing in the Index to Advertisers.

• Building Management

This categorical index in the magazine works as a second buyers’

• Other Affiliated Industry Professionals

guide for readers purchasing products and services

• Developers and Owners

We are proud that the region’s building industry considers Building Magazine an indispensable tool for staying up to date on major projects, issues, and happenings in the construction industry. Don’t miss out on this great opportunity to promote your business to the region’s top construction users; architecture, engineering and design professionals; general and specialty contractors; elected and appointed officials; and other affiliated industry professionals.

Advertising space is limited, ensure your company is represented by reserving your space now!

Contact Advertising Sales today 800.572.0011 / 240.393.4149 or marc@emconsultinginc.com

The Legal Pad The Maryland Home Improvement Law – Harsh Consequences of Noncompliance

By Marc Wertheimer, Esq. and Michael J. Bramnick, Esq., Selzer, Gurvitch, Rabin, Wertheimer, Polott & Obecny, P.C.

W

ith the downturn in the economy, many homebuilders and

by their unlicensed home improvement subcontractors. If permissible, the

contractors have shifted or otherwise expanded their focus to

practical effect could result in unscrupulous contractors targeting unlicensed

include renovations and additions, often times without considering

subcontractors, engaging them to perform work and ultimately refusing to

Maryland’s Home Improvement Law 1. Generally, it requires both contractors

make payment knowing they have no legal right to recovery through the judicial

and subcontractors

performing home improvement work to possess a

system. That question was answered in October 2011 by the Court of Appeals

license issued by the Maryland Home Improvement Commission . “Home

of Maryland 8. The Court held that Maryland’s Home Improvement Law does

improvement” is defined by statute

as “the addition to or alteration,

not render unenforceable a contract between a home improvement general

conversion, improvement, modernization, remodeling, repair or replacement

contractor and its unlicensed subcontractor, as the law was designed to protect

of a building or part of a building that is used or designed to be used as a

residential homeowners - not contractors - who are in a better position to

residence or dwelling place or a structure adjacent to that building . . .” Builders

know the qualifications and requirements of its subcontractors. So long as the

constructing new homes do not fall within the ambit of the Maryland Home

subcontractor possessed his home improvement license at the time he filed

Improvement Law as new home construction is expressly excluded from the

suit, the Court held he was entitled to recover the monies properly due and

definition of “home improvements.” Other exceptions include work performed

owing from the general contractor.

2

3

4

Maryland home improvement contractors are reminded that every home

on apartment buildings that contain four or more [single-family] units, work on

improvement contract is required by statute to contain certain information and

commonly owned areas of condominiums, and commercial projects.

The failure by a contractor or subcontractor (collectively “contractor”)

disclosures, including but not limited to the license number of the contractor

to possess a home improvement license when entering into a contract

and salesperson, approximate commencement and substantial completion

and performing home improvement work can have serious consequences.

dates of performance, a description of the work to be performed and materials

Specifically, a violation of the Home Improvement Law exposes the unlicensed

to be used, the number of monthly progress payments and the amount of each

contractor to both fines and imprisonment, as well as the potential to forego his

such payment, a notice furnishing the homeowner with the home improvement

right to receive payment from the homeowner. That is, a contract entered into

commission’s telephone number and advising the homeowner that contractors

by an unlicensed contractor is void and unenforceable . The practical result

must be licensed, and under certain circumstances a three day right to rescind

is that a contractor may complete a project, having performed all of his work

the contract. Compliance in this regard can be easily achieved, for example,

in a good and workmanlike manner, yet have no legal recourse in the event

through the use of a standard short form addendum to include whenever entering

of non-payment by the homeowner. Because the contract is “illegal,” courts

into a home improvement contract.

5

Construction professionals performing home improvement work are

will not assist an unlicensed contractor in recovering payment for his services

encouraged to consult the statute and underlying regulations, or speak with

when the law views him as having “unclean hands.”

The Home Improvement Law similarly precludes enforcement of a

an attorney, to confirm compliance with the Home Improvement Law prior to

mechanic’s lien against the improved property, nor can the contractor

entering into a home improvement contract so as to avoid the potentially severe results discussed above. m

successfully claim that the homeowner was unjustly enriched by the contractor’s services as an alternative remedy of recovery. The District of Columbia’s home improvement law goes further, holding that not only is an unlicensed contractor unable to recover monies owed from a homeowner under a home improvement contract, but he can be forced to disgorge all funds previously paid back to the homeowner 6. The rule applies even when the homeowner actually knew in advance that the contractor was unlicensed. The policy behind such a rule is that the contractor should not be able to “retain the fruits” of his illegal agreement 7. This rigid approach is deemed necessary by the Maryland and District of Columbia legislature after a long history of victimization of homeowners by unscrupulous home improvement contractors.

One question previously unclear was whether general contractors could use the Home Improvement Law defensively as a shield to payment claims raised

Messrs. Wertheimer and Bramnick are attorneys with Selzer Gurvitch Rabin Wertheimer Polott & Obecny, PC, which is located in Bethesda, MD. Mr. Wertheimer represents numerous homebuilders, developers, banks and other real estate investors and lenders. He previously chaired the MNCBIA Real Estate Finance Committee for five years. Mr. Bramnick represents numerous contractors in litigation and contract matters and handles other business and employment litigation matters. They may be contacted at mwertheimer@sgrwlaw.com or mbramnick@sgrwlaw.com.

Md. Code, Business Regulation Article §8-101 et seq.

Md. Code, Business Regulation Article §8-301(d), provides exceptions to the home improvement licensure requirement for, inter alia, electricians, plumbers, heating, ventilation, air-conditioning and refrigeration contractors acting only within the scope of that work and who are licensed in their specific occupation.

3 Md. Code, Business Regulation Article §8-301.

4 Md. Code,a Business Regulation Article §8-101(g).

5 Donmar Md. Corp. v. Hawkesworth, 420 A.2d 295 (Md. 1980).

6 Cevern, Inc. v. Ferbish, et al., 666 A.2d 17 (D.C. 1995). This strict rule does not apply if the home improvement contractor completes all the work before demanding any payments.

7 Miller v. Peoples Contractors, Ltd., 257 A.2d 476 (D.C. 1969).

8 Stalker Brothers, Inc. v. Alcoa Concrete Masonry, Inc., 422 Md. 410 (Md. 2011).

1 2

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

15

The Engineer’s Angle Tracking the WSSC Pipeline Regulations

By Carlos Ostria, PE, Loiederman Soltesz Associates, Inc.

T

he Washington Suburban Sanitary Commission (WSSC), the eighth largest water and sewer utility in the United States, serves nearly two million customers in both Montgomery and Prince George’s Counties. WSSC has over 150 miles of 36-inch and larger Prestressed Concrete Cylinder Pipes (PCCP) water transmission pipelines. PCCP was once the most commonly used material for large diameter water pipelines nationwide. Some of these pipes, however, were produced with brittle reinforcements and explosive eruptions have occurred. Based on results from several studies, WSSC has determined that catastrophic failure of 36-inch and larger PCCP pipelines can extend in excess of 80 feet beyond the pipeline. Therefore, WSSC proposes new requirements in its Pipeline Design Manual – originally adopted in 2008 – concerning PCCP and cast iron water pipelines among other matters.

WSSC’s proposed rule regarding horizontal separation from large diameter (36-inch diameter or larger) water pipelines was previously 25 feet in each direction from the center of the pipe. The proposed rule, which is currently being implemented, states that the minimum setback in each direction from the outer side of the pipe in question is 80 feet from a building or dwelling.

A couple of items to note are: 1. WSSC is open to relaxing the 80-foot right of way, and, 2. Parking, parks, and other uses are permitted within these setbacks.

The 80-foot right of way is a no-building zone, meaning no building or dwelling can be built in the specified area. With regards to WSSC compromising on the 80-foot setbacks, the builder must demonstrate with adequate documentation the ability to mitigate potential damage through use of structural enhancements, building material selections rated to withstand a potential pipeline failure or have their site-specific engineering solutions approved by WSSC. As of yet, they cannot or will not define suitable structural enhancements or what adequate documentation is needed to prove safety and to reduce the horizontal separation.

As a reference, please refer to the modified Common Design Guidelines document that can be found on the WSSC website (www.wsscwater.com).

The latest pipeline changes, as they relate to the required minimum horizontal separation, or setback, between large diameter water mains and structures, are notated in red in Part Three, Section 3: Pipeline Crossings and Clearances (pages C-3.2 - C-3.3).

16

MAR/APR 2012 |

BUILDING IN MARYLAND AND WASHINGTON, DC

Loiederman Soltesz Associates, Inc. and other industry representatives continue to communicate with WSSC. For example, LSA met with WSSC’s General Counsel’s Office, including the Office of the General Manager, in November of 2011. During that meeting, WSSC shed light on several of their proposed design manual modifications, including the topic of 80-foot setbacks. WSSC also discussed their Bi-County Working Group, who is working to gather input from industry leaders and ensuring their process of rule-making is more transparent.

To date, decisions are still underway for additional revisions to be made to the manual. WSSC has put the finalization of the publication on hold while these updates and other design criteria are still pending. LSA continues to monitor the latest status as the manual progresses and more information is made public. m Carlos Ostria, PE is Senior Vice President/General Manager of Loiederman Soltesz Associates, Inc. and has over 27 years of civil and site engineering consulting experience. He is responsible for the daily operations of the Rockville, MD office, including teams of engineers that monitor WSSC regulations and attend the agency’s meetings. He can be reached at 301-948-2750 or costria@lsassociates.net.

MNCBIA Membership New Members & Reinstatements (12/1/11 - 1/31/12) BUILDERS

ASSOCIATES

Dan Ryan Builders Custom Building/Remodeling Ronny Salameh 60 Thomas Jefferson Drive Frederick, MD 21702 Ph: 301-696-5502 Fax: 301-969-0992 rsalameh@danryanbuilders.com Sponsor: Roger Lebbin

Custom Design Concepts Architecture Interior Designers Mark Sullenberger 6710 Whittier Avenue McLean, VA 22101 Ph: 703-749-9040 Fax: 703-749-7906 mark@cdcarch.com Sponsor: Jonathan Kipnis

Integrity Homes of Virginia Custom Building/Remodeling John Dec 3684 Centerview Drive, Suite 120 Chantilly, VA 20151 Ph: 703-667-4520 Fax: 703-667-4519 jdec@integrityhomesva.com

Montero Law Group Attorneys Nancy Gusman 1738 Elton Road, Suite 105 Silver Spring, MD 20903 Ph: 301-588-8100 Fax: 301-588-8101 ngusman@monterolawgroup.com

Watkins Meegan, LLC Accountants & CPAs Seth Cohen 7700 Wisconsin Avenue NW, Suite 500 Bethesda, MD 20814 Ph: 301-654-7555 Fax: 301-565-9115 seth.cohen@watkinsmeegan.com Sponsor: Roger Winston

MNCBIA’s Most Wanted List

Listed here are firms whose membership in MNCBIA has lapsed in recent months. WE WANT THEM BACK! Please encourage these companies to reinstate their membership. Also listed are prospective members we are working to add to our team.

Aeroteck • All Temp Heating & Air Conditioning • AMEC Contracting • Barrons Lumber • Colorworld Painting & Drywall • Comstock Services • DeFiore Designs • Digiterra Design, LLC • Dimple Construction • Domus Partners, LLC • DOW Solutions • Foulger Pratt • Georgetown Bank • Guardian Realty Management, Inc. • Hatfield Equipment Services • InSight Marketing • JW Shipley • K.V. Gessford, Inc. • Land Logics Group • Patriot Land & Wildlife • Richmond American Homes • Stang Plumbing • Sun Brook Partners • Tower Companies

STARS Club (as of 2/1/2012)

The special members of MNCBIA’s STARS Club allow the Association to provide better services for your benefit, to function effectively, to continue special events dedicated to excellent networking and to strengthen our Advocacy program.

GOLD Development Guarantee Group of Montgomery County Elm Street Development Hanley Wood Market Intelligence NVR, Inc. Pleasants Development

SILVER Acacia Federal Savings Bank BB& T Georgetown Insurance Service, Inc. Lerch Early & Brewer, Chtd.

Linowes and Blocher, LLP Loiederman Soltesz Associates, Inc. McMillan Metro, P.C. Miles & Stockbridge, P.C. Rodgers Consulting, Inc. Winchester Homes, Inc.

BRONZE Ballard Spahr, LLP Burgess & Niple, Inc. Charles P. Johnson & Associates christopher consultants ltd.

Craftmark/Craftstar

Greenhorne & O’Mara, Inc. Gutschick, Little & Weber Mid-Atlantic Builders, Inc. Reznick Group Sandy Spring Bank Shulman Rogers St. Charles Community, LLC Washington Gas

FRIEND Baker Tilly Bowman Consulting Group, Ltd. Bozzuto Homes

Caruso Homes Dewberry Dico, Inc. Furey Doolan & Abell, LLP K Hovnanian Homes Liberty Homebuilder, Inc. Macris Hendricks & Glascock, P.A. Michael Harris Homes Miller and Smith Homes Mitchell & Best Homebuilders, LLC O’Malley Miles Nylen & Gilmore Ward & Klein

BUILDING IN MARYLAND AND WASHINGTON, DC

|

MAR/APR 2012

17

Events Calendar March 2012 1 50+ Awards Committee Meeting

26

9

Prince George’s County Liaison Breakfast State Government & Legislative Affairs Committee Meeting

State Government & Legislative Affairs Committee Meeting

10 27

2 Prince George’s Co. Liaison Committee Meeting

Codes & Standards Committee Meeting

Record Plat Subcommittee Meeting

11 28

Green Building Committee Meeting

Membership Committee Meeting Celebrity Chefs Night

12

Custom/Small Builders Council Meeting

APRIL 2012

WSSC Liaison Committee Meeting MNCBIA Executive Committee Meeting

7

State Government & Legislative Affairs Committee Meeting

DRPS Environmental Committee Meeting

3

5 State Government & Legislative Affairs Committee Meeting

6

2

Custom/Small Builders Council Meeting

8 WSSC Liaison Committee Meeting MNCBIA Executive Committee Meeting

12 State Government & Legislative Affairs Committee Meeting

4 DRPS Environmental Committee Meeting

Certified Aging-in-Place Specialists (CAPS I) Codes & Standards Committee Meeting

Montgomery County Liaison Breakfast

18 Calvert & St. Mary’s Cos. Liaison Joint Committee Meeting MNCBIA Charles Liaison & Chamber PGM Committee Meeting

19 Home Builders Care Foundation Board Meeting

5 50+ Awards Committee Meeting

13

13

24 Record Plat Subcommittee Meeting

6 Prince George’s Co. Liaison Committee Meeting

25 MNCBIA’s Membership Committee - Phone-A-Thon

14 Design/Build Solutions for Aging and Accessibility (CAPS II) Green Building Committee Meeting

15 Business Management for Building Professionals Home Builders Care Foundation Board Meeting

INDEX OF ADVERTISERS

19 State Government & Legislative Affairs Committee Meeting

21 Calvert & St. Mary’s Cos. Liaison Joint Committee Meeting Montgomery County Liaison Committee Meeting Charles County Liaison & Chamber PGM Committee Meeting

22 MNCBIA Board of Directors Meeting

Appliance Distributors Unlimited, Inc................................ Page 04, Back Cover Builders Mutual Insurance Company..................................................Page 19 GE Appliances...............................................................................Page 03 Linowes & Blocher LLP...................................................................Page 07 Monument Bank............................................................................Page 07 Shulman Rogers............................................................................Page 07 Signature Companies......................................................................Page 13 Vintage Security.............................................................................Page 02

18

MAR/APR 2012 |

BUILDING IN MARYLAND AND WASHINGTON, DC

1738 Elton Road, Suite 200 Silver Spring, MD 20903