Attorney General Gansler Announces Charges Filed Against Home Builder
Smart Development/Premiere Homes charged with illegally cancelling contracts

BALTIMORE, MD (August 26, 2008)- Maryland Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has charged a Rockville-based home builder, Smart Development/Premiere Homes, L.C. ("Premiere Homes"), and the company’s owner, Edward Kevin Smart, with violations of the Consumer Protection Act. Specifically, the charges allege that Premiere Homes’ building contracts contain illegal clauses that the builder used to terminate its building contracts with consumers without liability if it failed to build the consumers’ homes. The charges also allege that Premiere Homes repeatedly took advantage of this termination clause when favorable market conditions caused housing prices to rise, by cancelling its contracts to build homes after one year and refusing to build the homes unless consumers signed new contracts agreeing to pay Premiere Homes more money.

" Under Maryland law, a home builder that fails to build homes cannot cancel its contracts with consumers without liability," said Attorney General Gansler. "Consumers should be able to receive their promised homes."

Additionally, the charges allege that in one of the developments being built by Premiere Homes in Prince George’s County, the builder experienced regulatory difficulties that it failed to timely address. As a result, construction in the development was delayed for years. Nevertheless, Premiere Homes continuously sold homes to consumers without informing them of the regulatory issues and then cancelled the consumers’ contracts when it was unable to build the homes in one year and property values had risen sharply.

The Office of Attorney General seeks damages and restitution for consumers harmed by the company’s practices and the payment of penalties and costs to the State. A hearing on the Statement of Charges is scheduled to commence on January 12, 2009, at the Maryland Office of Administrative Hearings, 11101 Gilroy Road, Hunt Valley, Maryland. Consumers who may have had problems with Premiere Homes should contact the Consumer Protection Division at (410) 576-6374.