How does COMAR regulate model home and referral offers?
Short answer. COMAR 09.08.01.10 regulates both. Presenting a job as a model or demonstration home to imply a discount you don't give is deceptive, and referral offers must meet specific disclosure requirements.
- COMAR 09.08.01.10
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
A marketing consultant approaches you with a deal: "Pick a homeowner in a nice neighborhood. Do their renovation at cost. Then put a sign in their yard and tell prospects 'This is our model home — you get a discount for referrals.' People eat it up."
He guarantees you'll triple your leads.
- Correct
COMAR 09.08.01.10 specifically regulates model home offers and referral offers. Using a completed job as a 'model home' to lure neighbors with implied discounts, while charging them full price, is a deceptive practice. Referral fee arrangements where homeowners are promised compensation for leads must comply with specific disclosure requirements. This consultant's scheme is a classic complaint generator.
- Dangerous
While there's nothing wrong with yard signs or satisfied customer referrals, the 'model home' pitch as described is a regulated practice under COMAR 09.08.01.10. Representing a home as a 'model' or 'demonstration' project to imply special pricing, when the actual price isn't discounted, is deceptive. This is one of the specific practices the MHIC was created to regulate.
All 9 cancellation rights & consumer protection questions
- What must a door-to-door home improvement contract include?
- Does every homeowner have a 3-day right to cancel?
- Does a home show sale carry a 3-day right to cancel?
- What should you do about a pressured sale to an elderly homeowner?
- What happens when a contractor is accused of exploiting an elderly client?
- Can contractors raise prices after a storm in Maryland?
- Is writing a second contract for the insurance company fraud?
- Can you sign an invoice for more than the work you did?
- How does COMAR regulate model home and referral offers?