Complaints lead to license suspension

Alleged defaults spur action

Wednesday, May 14, 2008

The Home Builder Registration Unit, a division of the Maryland Attorney General’s Office, suspended McDaniels’ license last week, citing him for taking money from at least 13 consumers and then failing to begin or complete construction of the homes, pay subcontractors, enroll homes in new home security plans or refund money customers paid his company.

A statement of charges from the state’s Consumer Protection Division, which oversees the home builder unit, says McDaniels committed ‘‘unfair and deceptive practices.”

If McDaniels, owner of McDaniels Homes, fails to respond to the suspension within 30 days, the state will revoke his license, said Raquel Guillory, spokeswoman for the Attorney General’s Office. McDaniels is also prohibited from building any more homes before a hearing this summer.

Of the 3,900 homebuilders in the state, the unit has suspended about six licenses, including McDaniels’, since November, said Justin Hammer Jr., director of the home builder unit and assistant attorney general.

‘‘We only do it in circumstances where we believe the builder is causing a problem in the industry,” Hammer said.

A hearing before the Office of Administrative Hearings is set for Aug. 25, as the state seeks injunctive relief, restitution, damages and civil penalties against McDaniels.

McDaniels has also built new and custom homes in Mitchellville, Bowie, Easton and Calvert County since 2001.

He could not be reached for comment.

Along with the more than 13 complaints made against McDaniels, at least 15 consumers have also filed civil lawsuits, with some dating to 2000. McDaniels failed to disclose many of these lawsuits to the Home Builder Registration Unit, as required.

County courts have granted a total of $400,000 in judgments against McDaniels involving companies in Columbia, Gaithersburg, Lanham, White Plains, Bowie, Mechanicsville, Upper Marlboro, Baltimore and Poolesville. Other cases involving close to $100,000 in restitution fees were dismissed, with three additional active cases involving about $50,000.

The Prince George’s County Department of Environmental Resources sought an injunction against McDaniels in 2005, requiring him to bring a Glenn Dale home up to code. The court order went through in July.

‘‘It’s just been a nightmare for everyone,” Fort Washington homeowner Gina Noel told the Maryland Independent’s sister paper, The Gazette, in 2007, referring to the defective concrete and brickwork around her home, which McDaniels built. Noel also sought help from the county in obtaining an administrative order for ‘‘corrective action.”

Aside from several complaints of faulty construction, such as leaks, cracked drywall and a cracked driveway, McDaniels has also received criticism from his suppliers.

In the most recent case in November, The Reproduction Center, a printing service in Lanham, seeks $5,000 from McDaniels for failing to pay for reproduced architectural and engineering drawings dating to September 2006.

‘‘I tried to work with him and continue to service him on the promise of payment,” said Colleen Christensen, accounting administrator for The Reproduction Center and daughter of the owner. ‘‘It just got to the point where I didn’t have any other choice than suing him.”

Christensen said McDaniels has also evaded court summonses for the case. State court records show McDaniels had not been served as of late April.

‘‘I’m not surprised,” Joel C. Hafner, president of Fine Earth Landscape Inc. of Poolesville, said when he learned that the state had suspended McDaniels’ license.

Fine Earth Landscape sued McDaniels for unpaid work performed in the summer of 2006 and company officials remain unsure if they will receive the $15,000 judgment they won in their civil case.

‘‘This is certainly something we don’t want to see in the industry and why the Home Builder Registration Unit was set up,” said Kristin Hogle, director of communications for the Home Builders Association of Maryland.

McDaniels’ actions have a significant impact on suppliers in an already slumping real estate market, Hogle said.

‘‘The law in Maryland is very clear: Home builders must honor their commitments to home buyers and properly use their deposits and payments,” Attorney General Douglas F. Gansler (D) said in a statement Tuesday. ‘‘My office will seek severe sanctions against builders who fail to properly handle consumer deposits and who do not operate their businesses fairly and honestly.”

Consumers who have had problems with McDaniels or other builders may contact the Home Builder Registration Unit at 877-259-4525 or homebuilder@oag.state.md.us.