In Maryland, and in many other states, it is the builder’s responsibility to ensure any structure meets all applicable building codes, regardless of the language of a contract. Construction contracts in Maryland automatically include the local law where the work is to be preformed, meaning that county building codes are automatically part of a contract, whether they are mentioned in the contract or not. Failure to build to code is therefore considered to be a breach of contract by the builder.
The Maryland Court of Special Appeals recently held that builders have a duty to ensure compliance with applicable building codes, regardless of the language and/or specifications laid out in the contract. The case, Cuesport Properties, LLC v. Critical Developments, LLC, involved a contract for sale of a property between Cuesport Properties, LLC (seller & builder) and Critical Developments, LLC (buyer). The contract required that Cuesport build a demising wall to separate Critical Developments’ unit from the adjacent unit.
The contract between the two parties only mentioned a time frame, stating that the wall needed to be completed within thirty days of closing the deal. Apart from a short clause stating that the work “shall not be in violation of any Maryland governmental laws, ordinances, rules or regulations,” the contract did not mention specifications or Anne Arundel county Maryland building code. The contract between the two companies also stated that the new wall should be built using the same materials and construction as a previously installed wall.
After work had been completed, Critical Developments learned that Cuesport never obtained a county building permit for the demising wall and that neither of the walls had been build up to county code. Critical Developments filed a complaint against Cuesport for breach of contract.
The Maryland Circuit Court held that, even though the contract did not mention the county’s building codes, they we included in the terms of the contract. Therefore, by failing to obtain a permit and building a demising wall that was not compliant with applicable county codes, Cuesport had breached the terms of the contract. Furthermore, the Court stated that it was irrelevant that neither party knew, at the time that Cuesport finished the demising wall, that the contract had been breached. Breaches of the law are not excused by ignorance of the law. Cuesport was found liable for liquidated damages spanning a period of 260 days (the time it took the owner to determine that the wall violated county code and remediate) and attorney’s fees.
Maryland construction companies should ensure compliance with local building codes where the work is to be completed because that code is automatically part of any construction contract. Not building in accordance with local code is considered a breach of contract and makes the builder liable, regardless of whether the parties knew the work was being built up-to-code or not.
For additional information related to construction contracts in Maryland, contact Matthew G. Hjortberg at Hjortsberg@bowie-jensen.com.