# How to Verify a Maryland Custom-Home Advance Payment: Escrow or Direct?

Source: https://brictale.com/build/contractors/verify-maryland-custom-home-advance-payment-escrow
Published: 2026-09-22
Audience: Homeowner
Published by Brictale, a consumer home-intelligence publication. https://brictale.com

## Short answer

For a Maryland custom home, first confirm the contract and land fit the statute. Then label every proposed payment as labor completed, materials received, or an advance. An advance generally needs the statutory escrow path unless a stated exception applies; a separate joint-signature account or qualifying surety bond may substitute. Require the signed draw schedule and record handoffs before signing, then have Maryland counsel resolve the threshold and exception questions.

---

# How to Verify a Maryland Custom-Home Advance Payment: Escrow or Direct?

For a Maryland custom home, confirm that the agreement covers a single-family residence on land you currently or previously owned and meets the statutory definition. Classify each payment as completed labor, received materials, or an advance. An advance generally follows Maryland’s escrow path unless a listed exception applies; a separate joint-signature account or qualifying corporate surety bond may substitute. Before signing, ask Maryland counsel to resolve the classification and protection path. See [Maryland definitions](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-501.pdf) and [escrow rule](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf).

This is a Maryland pre-signing decision surface for an owner building a single-family residence. It is not personalized legal advice, a lender underwriting opinion, a bond opinion, a lien opinion, or representation in a dispute. A Maryland attorney should apply the current code to the proposed contract, financing, builder entity, payment flow, and property facts before money changes hands.

## 1. Start with the Maryland scope gate

The first decision is whether the proposed agreement is a Maryland “custom home contract” under Real Property Title 10, Subtitle 5. If it is not, this article’s escrow conclusion does not automatically follow. The statutory gate asks who will live in the home, who owns the land, the contract value, and whether the work is actually governed by Maryland’s Home Improvement Law.

### The four questions that control the gate

Answer these questions from the draft agreement and your property records, not from a sales description:

1. Is the project a single-family dwelling constructed for your residence?
2. Do you currently own the land, or did you previously own it?
3. Is the contract value at least $20,000 and does it require the builder to furnish labor and material for construction, erection, or completion?
4. Is the agreement instead for work by a licensed home improvement contractor that is subject to Maryland Home Improvement Law?

Maryland defines “custom home” as a single-family dwelling constructed for the buyer’s residence on land currently or previously owned by the buyer. It defines “custom home contract” as a contract with a value equal to or greater than $20,000 to furnish labor and material connected with constructing, erecting, or completing that home. The definition expressly excludes an agreement for work done by a licensed home improvement contractor and subject to Maryland Home Improvement Law. [Read the current statutory definitions in Real Property §10-501.](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-501.pdf)

That means a project can look like a custom build to a homeowner and still require classification work. A builder’s brand name does not answer the legal question. Calling a payment a “deposit,” “mobilization,” “preconstruction fee,” “material reservation,” “design retainer,” or “draw” also does not answer it. The agreement’s parties, scope, price, land, residence use, and regulatory classification do.

### What to collect before asking for an escrow answer

Create a short qualification file:

- the legal names of you and the contracting party;
- the property address and, if available, the parcel or legal description;
- your deed, settlement statement, or other record showing present or prior ownership;
- the draft contract and every incorporated exhibit;
- the total contract price and any allowances, alternates, preconstruction agreement, or owner-supplied work;
- the proposed payment schedule and the exact payee for each payment;
- the lender term sheet or loan commitment, if financing is involved;
- the builder’s explanation of whether it is using escrow, a project-specific account, a pooled account, or a surety bond; and
- the proposed list of primary subcontractors, suppliers, and material categories.

The responsible person for the first packet is you, the homeowner. Your responsibility is not to make a legal determination; it is to make the facts reviewable. The builder is responsible for explaining its proposed payment mechanics and supplying contract documents. Your Maryland attorney is responsible for legal classification and advice. If a lender is involved, the lender or its counsel must confirm what loan actually finances the custom-home contract; do not treat the existence of a mortgage as self-proving.

### Stop conditions at the gate

Pause before paying if any of these facts are unknown:

- the builder will not identify the contracting entity;
- the home is an investment, speculative sale, rental, or second home rather than your residence;
- the land ownership history is unclear;
- the contract bundles design, construction, land sale, or renovation work in a way the draft does not separate;
- the price is near $20,000 and allowances or change orders could move the agreement across the threshold;
- the builder says “Maryland does not require escrow” without identifying the statutory classification or exception; or
- the proposed payer, payee, lender, and contract parties do not match.

The safe next handoff is a written classification question to Maryland counsel. Ask counsel to state which facts make Title 10, Subtitle 5 applicable, which facts do not, and which other Maryland rules govern if the agreement is outside that subtitle. Do not solve a scope problem by choosing the most favorable label.

![Decision map for checking whether a Maryland custom-home payment review applies](https://brictale.com/images/home/build/contractors/verify-maryland-custom-home-advance-payment-escrow/maryland-scope-gate-decision-map.webp)

## 2. Classify the proposed payment before choosing where it goes

The payment question is not simply “deposit or progress payment?” For Maryland’s custom-home escrow analysis, ask whether the consideration is being paid before the labor is completed or before the materials for which it is paid have been received. A payment can be called a draw and still be an advance. A payment can be called a deposit and still require a different analysis if the statutory exception or a financing structure applies.

### Build a payment record, one line at a time

For every proposed payment, record:

| Field | What to enter | Why it matters |
| --- | --- | --- |
| Payment ID | P-01, P-02, or another stable label | Keeps later invoices and records tied to the same event |
| Amount | Dollars, including tax if bundled | Makes the cumulative calculation reproducible |
| Requested date | Contract date and actual invoice date | Shows sequence and timing |
| Payee | Builder, escrow account, supplier, or other party | Reveals whether the proposed flow matches the contract |
| Work or material basis | Foundation labor, trusses, windows, design, permit, and so on | Identifies the thing that must be complete or received |
| Labor status | Not started, partly complete, complete, or disputed | Tests the labor side of the advance question |
| Material status | Not ordered, ordered, fabricated, shipped, received, installed, or disputed | “Ordered” is not the same as “received” |
| Record due | Invoice, delivery receipt, inspection, draw certificate, or other proof | Creates a verification handoff |
| Proposed protection | Direct, pooled escrow, separate joint account, or surety bond | Makes the builder’s method explicit |
| Result | Direct candidate, escrow question, exception question, or stop | Records the next decision, not just the payment history |

The homeowner can safely collect the invoice, contract line, delivery record, photographs of delivered materials, inspection reports, and account or bond documents. The homeowner should not certify that work is complete when they cannot verify it, sign a lien waiver they do not understand, or inspect dangerous work personally.

### Labor completed versus labor planned

“The crew will start next week” is an advance fact, not a completed-labor fact. “The foundation subcontractor has mobilized” may describe a real cost, but it does not by itself prove completion of the labor for which the payment is being made. If the draw is for excavation, footings, foundation walls, framing, or another defined scope, ask the builder to state the measurable completion event: for example, a specified inspection passed, a defined percentage of a priced line item, or a listed deliverable accepted under the contract.

Avoid using vague percentages without a basis. A statement such as “90% of the foundation is done” is hard to verify if the contract does not define the foundation scope, its price, exclusions, retainage, stored materials, and inspection status. A useful draw description ties the amount to a schedule line and an observable or documented event.

### Materials ordered versus materials received

An invoice for materials that are merely selected, ordered, or reserved should be treated as an advance question until Maryland counsel confirms the application to the exact transaction. The statutory language addresses receipt of the materials for which the consideration is paid. A supplier confirmation that a special-order item exists somewhere else is not the same record as receipt at the project or another contractually defined location.

For stored materials, ask five questions in writing:

1. Where are the materials physically located?
2. Who owns them while stored?
3. Are they identified and segregated for this project?
4. Are they insured against loss, theft, and damage?
5. What record proves receipt, quantity, condition, and the payment amount allocated to them?

The answer may change the commercial risk even if counsel concludes the payment is not a statutory escrow advance. A homeowner can negotiate stronger contract conditions than the statutory minimum. A builder can have legitimate pre-purchase costs without the homeowner having to accept an undocumented transfer of risk.

### Services that do not fit a physical milestone

Design coordination, engineering, permit processing, insurance, temporary utilities, and builder overhead may not map neatly to “labor completed” or “materials received.” Do not force them into a construction milestone merely to make the schedule look complete. Separate preconstruction services from construction consideration if the contract does so; identify the deliverable, fee basis, ownership of work product, cancellation rule, and payment destination. Ask Maryland counsel whether the payment is part of the custom-home contract and how §10-504 applies.

This is also where the AIA comparison is useful but limited. The public instructions for A112-2021 describe a flexible compensation structure, separate preconstruction compensation, detailed milestone payment schedules, and optional conditions such as lien releases, proof of subcontractor payment, and third-party inspections. AIA expressly says it does not recommend a particular compensation method or payment amount. That is a drafting and coordination example, not Maryland law. [See the AIA A112-2021 instructions.](https://help.aiacontracts.com/hc/en-us/articles/4411612630547-Instructions-A112-2021-Standard-Form-of-Agreement-Between-Owner-and-Home-Builder-for-Design-and-Construction-of-a-Single-Family-Home)

Utah’s Division of Professional Licensing offers a separate comparison lesson: its optional residential construction agreement is presented as a detailed starting point, recommends that both parties complete and sign each page, and directs legal questions to an attorney. That guidance is for Utah projects, so use it only as a reminder to make roles, payment terms, and incorporated documents explicit—not as a Maryland requirement. [Utah DOPL residential construction agreement guidance](https://commerce.utah.gov/dopl/contracting/construction-contract/)

### The practical classification rule

Until the underlying labor is completed or the materials are received, mark the row **advance—escrow or exception review**. If the builder says it can be paid directly, require the builder to state in writing whether it relies on the 5% provision, the mortgage-financing exception, the broker-held-funds exception, a different contract classification, or a legal interpretation that the payment is not in advance. The next handoff is not an argument over labels; it is the written explanation and supporting record.

![Payment status chain from labor or material evidence to advance review](https://brictale.com/images/home/build/contractors/verify-maryland-custom-home-advance-payment-escrow/payment-status-evidence-chain.webp)

## 3. Test the escrow, joint-account, bond, or exception path

For a qualifying Maryland custom-home contract, an advance payment generally belongs in an escrow structure to the extent it precedes completion of the paid labor or receipt of the paid materials, unless the statute’s stated exceptions apply. Maryland also provides alternatives: a separate account requiring both buyer and builder signatures for withdrawals, or a qualifying corporate surety bond. The builder’s preference for operating cash is not itself an exception.

### The ordinary escrow rule

Maryland Real Property §10-504 says a custom home builder receiving consideration in connection with a custom-home contract shall place into escrow the consideration that is paid in advance of completion of the labor or receipt of the materials for which it is paid, subject to the statute’s exceptions. The escrow account must be separate from the builder’s regular funds so the advance can be returned if the buyer becomes entitled to its return. A builder may place advances for more than one home in a single escrow account, so a pooled account is not automatically invalid. [Read §10-504(a).](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf)

If an advance is paid by check or draft, the statute says the builder may accept it only in the name of the escrow account. The practical question is therefore not merely “does the builder have an account?” Ask for the exact account name, the bank or escrow holder, the project ledger method, the permitted signers, and the withdrawal conditions. A screenshot of a bank balance is not a complete escrow verification.

Maryland’s related trust rule is also relevant to the record structure: Real Property §10-502 says consideration received in connection with a custom-home contract is held in trust for the buyer and that payments to subcontractors or suppliers must be consistent with that trust. [Read §10-502.](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-502.pdf) Treat that rule as a reason to make the payment path and supporting records explicit, not as permission to infer a remedy from a worksheet.

### The 5% threshold is a cumulative question

The statute says consideration received in advance that does not total in excess of 5% of the home contract price need not be placed in escrow under §10-504(a). Calculate the total advance, not just the next invoice, and show the calculation in the worksheet. Do not assume that the threshold resets at every draw or that only the amount above 5% is automatically covered. The exact application at the boundary should be a written question for Maryland counsel.

**Illustrative example, not a quote or legal conclusion:**

- Contract price: $600,000
- Proposed advance: $45,000
- Advance percentage: $45,000 ÷ $600,000 × 100 = **7.5%**
- Five-percent reference amount: $600,000 × 0.05 = **$30,000**
- Difference between the proposed advance and that reference amount: **$15,000**

The worksheet should flag this as **over the 5% reference—counsel and escrow-path review**, not as a conclusion that $15,000 is the only protected portion. If a later advance of $12,000 is requested, cumulative advances become $57,000 and the cumulative percentage becomes 9.5%. If the contract price later changes to $660,000, the same $57,000 becomes 8.636...%, calculated as $57,000 ÷ $660,000 × 100. A price change can alter the arithmetic, but it does not erase the payment history. Keep the original price, each signed change order, and the cumulative calculation.

### Sensitivity table for the same illustrative project

| Contract price | Cumulative advance | Calculation | Percentage | Worksheet flag |
| ---: | ---: | --- | ---: | --- |
| $600,000 | $18,000 | 18,000 ÷ 600,000 × 100 | 3.0% | Below 5% reference; still record the basis and ask whether another rule applies |
| $600,000 | $30,000 | 30,000 ÷ 600,000 × 100 | 5.0% | Boundary; ask counsel how the statutory wording applies |
| $600,000 | $45,000 | 45,000 ÷ 600,000 × 100 | 7.5% | Above 5% reference; escrow, bond, or exception review |
| $600,000 | $90,000 | 90,000 ÷ 600,000 × 100 | 15.0% | Material advance; stop for written protection and legal review |
| $660,000 | $57,000 | 57,000 ÷ 660,000 × 100 | 8.636...% | Recalculate after signed price change; preserve prior values |

The sensitivity is useful because a “small” mobilization payment can become material after several invoices. It also shows why a percentage alone is not enough. Two projects can both be at 7.5% while one payment covers received windows and the other covers a builder’s unrestricted cash need. The worksheet carries both the arithmetic and the payment basis.

### What escrow withdrawals may cover

Section 10-504 limits withdrawals from the escrow account to specified purposes: returning all or part of the money to the buyer; paying documented claims of people who furnished labor or material, including fuel, according to the draw schedule for which the funds were advanced; paying money forfeited under the contract of sale; or final payment upon an occupancy permit or possession. [Read the withdrawal language in §10-504(b).](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf)

For a homeowner, “documented” should prompt a record request. Ask what document supports the withdrawal, which schedule line it matches, what amount is allocated, whether the labor or material is complete or received, and whether the amount has already been paid through another draw. If the account pays a documented subcontractor claim, that does not remove the need for the builder’s required subcontractor and payment list under §10-505.

### Separate account with two signatures

In lieu of the ordinary escrow account, Maryland permits a separate escrow account for each custom-home contract with both buyer and builder signatures required for withdrawals. Deposits and withdrawals remain governed by §10-504. This is not equivalent to an ordinary builder operating account with an informal promise to show statements later.

Ask for the account agreement before signing. Confirm:

- the account is identified to the exact contract and property;
- both signatures are required for every withdrawal, not just opening the account;
- the bank’s process for rejected or disputed withdrawals is documented;
- the account cannot be swept, pledged, or commingled in a way inconsistent with the agreement;
- statements go to both parties; and
- the contract explains how disputes, refunds, and final release are handled.

These are verification questions, not assumptions that a bank will interpret Maryland law for you. If the account terms conflict with the contract, the next handoff is to counsel before any deposit.

### Corporate surety bond as an alternative

Maryland also permits a custom home builder to obtain and maintain a corporate surety bond in lieu of the escrow accounts. The bond must be conditioned on return of the sum if the buyer becomes entitled to return, and the builder must maintain it until complying with §9-114. Section 10-504 points to §10-302 for the form and amounts. [See §10-504(d)](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf) and [the referenced §10-302 provisions](https://mgaleg.maryland.gov/mgawebsite/laws/StatuteText?article=grp&section=10-302).

Do not treat “bonded” on a business card, bid, or website as proof of this protection. Request the bond itself or a verification from the surety showing the principal, obligee, project or covered deposit structure, effective dates, amount, claims process, exclusions, and cancellation or renewal terms. Ask counsel whether the form satisfies §10-504 and whether the amount covers the actual exposure. A general liability policy, workers’ compensation certificate, license bond, performance bond, or payment bond may have a different purpose and should not be substituted by name alone.

### The two statutory exception questions

Section 10-504 says it does not apply to a custom-home contract financed by a mortgage loan issued by a federally chartered financial institution or a financial institution regulated under Maryland’s Financial Institutions Article. It also does not apply to a sale by or through a licensed real estate broker when all sums in the nature of deposits, escrow money, or binder money are paid to the broker to be held in the broker’s escrow account. [Read the exceptions in §10-504(e).](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf)

The exceptions are narrow facts to verify, not shorthand for “mortgage equals no escrow” or “broker involved equals no records.” Ask:

- What exact loan finances the custom-home contract?
- Who issued it, and what regulatory status supports the exception?
- Does the loan finance this payment and this contract, or only a later construction phase?
- Is the payment actually held by a licensed real estate broker in the broker’s escrow account?
- Is the broker handling the money in the capacity described by the exception?
- Which §10-505 contract and record duties still apply, if any?

The builder, lender, broker, and counsel may each own part of this answer. Put the answer in the closing file. If a builder cites the mortgage exception but cannot identify the lender, loan, and payment connection, flag **exception unverified**.

![Comparison of direct payment, escrow, joint-signature account, bond, and statutory exception review](https://brictale.com/images/home/build/contractors/verify-maryland-custom-home-advance-payment-escrow/maryland-protection-path-comparison.webp)

## 4. Rebuild the contract and draw records before you sign

The safest payment structure is one a third party can understand without a phone call: a written Maryland contract, a separately signed draw schedule with particularity, identified subcontractors, written change orders, warranty disclosure, recurring payment records, and final lien waivers. These records are not administrative decoration; they are the handoff points that let you verify whether the next payment is supported.

### The mandatory contract packet

Maryland Real Property §10-505 requires every custom home contract to be in writing and identifies specific content. The draw schedule must be on a separate sheet and separately signed by buyer and builder. To the extent known, the contract must identify the primary subcontractors. Changes must be recorded as change orders stating the change in work and price effect. The contract must state in bold type whether the builder is covered by a third-party-guaranteed warranty program. [Read the complete list in §10-505.](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-505.pdf)

Build a version-controlled packet with:

- the base contract and execution date;
- every incorporated plan, specification, allowance, exhibit, and addendum;
- the separate signed draw schedule;
- the subcontractor and supplier identification page;
- the escrow, account, or surety documents;
- the warranty-program statement;
- the change-order form and change log;
- the payment register; and
- the final release and closeout requirements.

Put the contract version beside each payment record. A payment approved under Draw Schedule version 1 should not silently migrate to a revised schedule version 3. If a change order moves money from a future milestone into an early purchase, update the cumulative advance calculation and obtain the legal review the change creates.

### Make the draw schedule particular enough to test

“Foundation: 10%” may not be particular enough for practical verification if it does not say what completion event earns the 10%, what costs are included, and what record supports approval. A usable schedule can include:

| Draw | Amount or formula | Work/material basis | Earned when | Evidence attached | Who verifies |
| --- | --- | --- | --- | --- | --- |
| 1 | $45,000 illustrative | Mobilization, permits, and defined early procurement | Only after the agreed prerequisites and escrow or exception review | Invoice, account/bond record, procurement list | Builder plus homeowner review; counsel for classification |
| 2 | $72,000 illustrative | Excavation and footings | Defined scope complete and required inspection record received | Invoice, inspection, photographs, schedule update | Builder; independent inspector if engaged |
| 3 | $96,000 illustrative | Foundation walls and waterproofing | Defined scope complete; stored materials separately identified | Delivery and inspection records | Builder plus homeowner review |
| 4 | $120,000 illustrative | Framing and roof dry-in | Contract milestone complete, exclusions listed | Progress report, invoices, updated subcontractor list | Builder; architect or inspector if contracted |

The dollar amounts above are illustrative placeholders for the worksheet method, not Maryland prices, a suggested percentage, or a payment recommendation. Your schedule should use the actual contract value, priced line items, allowances, retainage, taxes, credits, and owner-supplied items. If the builder cannot connect an amount to an event, mark it **not verifiable from current schedule**.

### Keep changes separate from payment approvals

Maryland requires changes to be recorded as change orders specifying the change in work and its effect on the price. A change order should also say whether it affects time, allowances, materials, responsibility, warranty, permits, or a previously approved draw. Do not approve a payment merely because the change was discussed in a text message or field meeting.

Comparison examples show why this handoff matters but do not replace Maryland law. California’s contractor guidance says payment schedules should be detailed and scope or price changes should be in a written change order signed before the change. Oregon’s public sample says extra-cost alterations are performed only after a written change order becomes part of the contract and is accepted by homeowner and contractor. Those are California and Oregon examples, not Maryland rules. [California CSLB contract guidance](https://www2.cslb.ca.gov/Consumers/Hire_A_Contractor/Home_Improvement_Contracts/What_Is_A_Contract.aspx) and [Oregon’s sample change order](https://www.oregon.gov/ccb/Documents/Change-order-sample1.pdf) illustrate the sequence: describe, price, sign, then proceed.

For your Maryland packet, use a change-order register with these columns: number, date requested, requester, affected scope, reason, original price, price change, revised contract price, schedule effect, payment effect, permit or design effect, signatures, and evidence received. Recalculate the advance percentage after each executed change that affects contract price or timing.

### The recurring 30-day record handoff

After each progress payment, Maryland §10-505 requires the contract to require delivery within 30 days of a list of subcontractors, suppliers, or materialmen who have provided more than $500 of goods or services to date and an indication of which have been paid by the builder. Treat this as a calendar event tied to the actual payment date. It is not enough to collect a list at the end of the project.

Your register can include:

- progress-payment date;
- due date calculated as payment date plus 30 days;
- each firm or person and role;
- goods or services provided to date;
- whether the total exceeds $500;
- amount invoiced and amount paid according to the builder;
- disputed or withheld amounts, if any;
- date received;
- missing explanations; and
- next escalation or counsel question.

The homeowner should not independently accuse a subcontractor of nonpayment based on an incomplete list. Instead, compare the list with invoices, delivery records, and known site activity, then ask for clarification in writing. A mismatch is a verification trigger, not a final finding.

### Final lien waivers are a checkpoint, not a substitute for earlier records

Maryland §10-505 requires the builder to provide waivers of liens from all applicable subcontractors, suppliers, or materialmen within a reasonable time after final payment for the goods or services they provide. Related Maryland §9-114 requires a signed release of lien from each material supplier and subcontractor who provided work or materials under the contract at settlement or payment in full. [Read §9-114.](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/9-114.pdf)

A final waiver from the general contractor alone may not satisfy the practical need to identify each applicable lower-tier claimant. Ask counsel to review the form, timing, project description, covered period, exceptions, conditional or unconditional status, and whether the signatory has authority. Do not sign a final payment approval that says all claims are released if the required releases are missing or the document scope is unclear.

## 5. Use the Maryland advance-payment escrow-versus-direct-payment worksheet

The worksheet’s decision is not “good builder” versus “bad builder.” It is a reproducible record of which facts support a direct-payment candidate, which facts point to escrow or an alternative protection, which statutory exception is being claimed, and what must be verified before signing. The worksheet is designed to travel from homeowner to builder to Maryland counsel without losing the original payment arithmetic.

### Original contribution: Maryland advance-payment escrow-versus-direct-payment worksheet

**Title:** Maryland advance-payment escrow-versus-direct-payment worksheet.

**Method:** For each proposed payment, identify the Maryland contract gate, enter the total contract price and cumulative advance, calculate advance divided by contract price multiplied by 100, then record the responsible person, evidence due, and next written question. Compare the result with Real Property §§10-501, 10-504, 10-505, and the related release checkpoint in §9-114.

The worksheet calculation is:

`advance percentage = cumulative advance ÷ contract price × 100`

After the calculation, classify the basis as completed labor, received materials, or advance/uncertain. Record the proposed protection—ordinary escrow, separate buyer-and-builder-signature escrow, corporate surety bond, or direct payment under a stated exception. Finally, identify the evidence due, the person responsible, the date of the next handoff, and the unresolved question for Maryland counsel.

**Limitations:** This is an illustrative review aid, not legal advice, a lien opinion, a lender approval, or a determination that a particular builder, loan, account, bond, payment, or contract qualifies under Maryland law. Thresholds, exceptions, contract classifications, and remedies require a Maryland attorney to apply the current code to the signed project documents.

The worksheet does not decide whether a contract qualifies, whether the 5% wording covers a particular payment, whether a mortgage or broker exception applies, whether a bond satisfies the statute, whether a lien waiver is legally effective, or whether a builder has complied. It is not an official Maryland form, legal advice, a lender approval, a construction inspection, or a substitute for reviewing the current code and signed documents.

### Blank worksheet

#### A. Scope gate

| Question | Your answer | Evidence or document | Status |
| --- | --- | --- | --- |
| Single-family dwelling? |  | Plans and contract scope | Confirm / unclear |
| Constructed for buyer’s residence? |  | Contract and intended use | Confirm / unclear |
| Land currently or previously owned by buyer? |  | Deed, settlement record, or title file | Confirm / unclear |
| Contract value at least $20,000? |  | Signed price and change-order ledger | Confirm / unclear |
| Builder furnishing labor and material? |  | Scope, exhibits, trade responsibilities | Confirm / unclear |
| Excluded or governed as Maryland home improvement work? |  | License and contract classification | Confirm / counsel |
| Maryland counsel’s classification answer |  | Written advice or question log | Received / pending |

#### B. Payment row

| Field | Entry |
| --- | --- |
| Payment ID and requested date |  |
| Contract price used in calculation | $ |
| This payment amount | $ |
| Previous cumulative advances | $ |
| New cumulative advances | $ |
| Formula | cumulative advance ÷ contract price × 100 |
| Calculated percentage | % |
| Work or material paid for |  |
| Labor completed? How verified? |  |
| Materials received? Where and when? |  |
| Payee and account name |  |
| Proposed path | Direct / ordinary escrow / separate joint-signature escrow / bond / exception claimed |
| Evidence received |  |
| Responsible next person |  |
| Decision | Pay candidate / escrow review / exception review / stop |

#### C. Protection and record checkpoint

| Checkpoint | Yes / no / pending | Document or question |
| --- | --- | --- |
| Written contract signed by both parties |  |  |
| Separate draw schedule signed by both parties |  |  |
| Draw line states completion or receipt event |  |  |
| Primary subcontractors identified to extent known |  |  |
| Change-order process states work and price effect |  |  |
| Warranty-program status in bold type |  |  |
| Escrow account separate from regular builder funds |  |  |
| If separate account, both signatures required for withdrawals |  |  |
| If bond, exact corporate surety document reviewed |  |  |
| If exception, lender or broker facts verified |  |  |
| Thirty-day subcontractor/supplier/payment list deadline calendared |  |  |
| Final waiver and release requirements identified |  |  |
| Maryland counsel’s unresolved questions answered |  |  |

### Worked example with sensitivity

**Illustrative scenario:** The draft Maryland contract price is $600,000. The builder requests $45,000 at signing for “mobilization, early procurement, and scheduling.” No labor is complete, and the builder says some windows will be ordered but not yet received. The proposed payment is to the builder’s ordinary operating account.

The worksheet records:

- contract price = $600,000;
- payment = $45,000;
- previous cumulative advance = $0;
- new cumulative advance = $45,000;
- formula = $45,000 ÷ $600,000 × 100;
- result = 7.5%;
- labor status = not complete;
- material status = not received for the windows;
- proposed protection = direct to operating account;
- decision = **stop for escrow, bond, or verified exception review**.

The worksheet does not say the builder is acting unlawfully. It says the payment is factually an advance candidate and the proposed operating-account destination is not yet matched to a Maryland protection path. The next question is: “Please identify the statutory basis for direct payment, provide the escrow or bond documents if applicable, and state whether the mortgage-financing exception is claimed. Maryland counsel will review.”

**Sensitivity 1: smaller request.** If the request is $18,000 instead, the calculation is $18,000 ÷ $600,000 × 100 = 3.0%. The worksheet flags the amount as below the 5% reference but still asks counsel to confirm classification, because the payment basis, other contract rules, and cumulative future advances remain relevant.

**Sensitivity 2: exactly $30,000.** The calculation is 5.0%. The worksheet flags the boundary and does not convert the percentage into a payment permission. Ask counsel how the statutory “does not total in excess of 5%” wording applies to the exact sequence and contract.

**Sensitivity 3: prior advance.** If $18,000 was already paid and the builder requests $18,000 more, cumulative advance is $36,000, not $18,000. The percentage is $36,000 ÷ $600,000 × 100 = 6.0%. The record must include the first payment even if it was described as a deposit.

**Sensitivity 4: price change.** If a signed change order raises the contract price to $660,000 after cumulative advances reach $57,000, the new percentage is $57,000 ÷ $660,000 × 100 = 8.636...%. Do not delete the historic 9.5% calculation against the original $600,000 price; retain both calculations and ask counsel which contract price controls the relevant statutory analysis.

### What the worksheet can and cannot infer

The worksheet can show that a payment is early, cumulative, undocumented, or protected by a named path. It cannot infer that a delivered invoice proves receipt, that a bank account is statutory escrow, that a bond is enforceable for this buyer, that a builder’s list is complete, or that a waiver releases every possible claim. Those are the limits that make the worksheet safer than a green “pay” button.

Use a four-state result instead of a binary answer:

- **Direct-payment candidate:** labor or materials status and contract basis are verified, and no unresolved statutory protection issue remains.
- **Escrow or alternative-protection review:** the payment is ahead of completion or receipt, or the amount and sequence require threshold analysis.
- **Exception review:** the builder relies on mortgage financing, broker-held funds, or another classification; the underlying facts and documents are pending.
- **Stop:** the party, payee, account, contract version, scope, or required record cannot be verified.

![Worksheet handoff from payment calculation to records, counsel, and next decision](https://brictale.com/images/home/build/contractors/verify-maryland-custom-home-advance-payment-escrow/advance-payment-worksheet-handoff.webp)

## 6. Run the document handoffs and verification sequence

The payment decision becomes reliable only when each participant knows what to deliver, when to deliver it, and who checks it. The homeowner should coordinate the file and make decisions; the builder should produce contract and payment records; the lender or broker should verify its own role; and Maryland counsel should resolve legal classification, exceptions, bond, waiver, and lien questions.

### Handoff 1: homeowner to builder before signing

Send the builder a single written request with the draft contract attached and ask for:

1. the complete payment schedule and each advance basis;
2. the exact destination of each payment;
3. the escrow account agreement or bond document, if proposed;
4. the builder’s written explanation for any direct payment before completion or receipt;
5. the primary subcontractor list to the extent known;
6. the form and timing of the 30-day payment list;
7. the change-order form and approval sequence;
8. the warranty-program disclosure;
9. the final lien-waiver and release package; and
10. the name and role of the person who will certify each draw.

Ask for the answer in the contract or an attached exhibit, not just in a call. A written answer that says “we handle all payments” is not a draw schedule. A written answer that maps P-01 to a defined scope, account, record, and date is reviewable.

### Handoff 2: builder to homeowner after each payment

Calendar the 30-day list requirement. At each payment, save the builder’s invoice, draw certificate, updated schedule, payment application, supporting invoices, delivery records, inspection records, and subcontractor/supplier status. The statutory record list is a minimum contract obligation; you can negotiate additional documents such as conditional lien waivers with each draw, but have counsel review the forms and timing.

Compare the list with what you can safely observe: posted permits, inspection records, delivery tickets, schedule updates, and the names of crews or suppliers. Do not enter an active excavation, climb framing, enter a confined space, handle energized equipment, or inspect unstable material to verify a draw. Those hazards belong to qualified professionals under the project’s safety plan. Your observation role is record collection and communication, not construction-site certification.

Remote document review has a hard limit: it cannot confirm concealed structural work, actual material receipt, account segregation, bond enforceability, site safety, or a builder’s complete payment history. It can identify missing evidence and the next professional handoff. Use an independent inspector, qualified contractor, lender inspector, or Maryland attorney for the part of the decision that requires site observation, technical judgment, account review, or legal advice.

### Handoff 3: homeowner to counsel

Give counsel the whole payment file, including adverse facts:

- the original and revised contract prices;
- every payment and proposed payment;
- the cumulative calculation;
- any direct payments already made;
- every claimed exception;
- the lender and loan documents relevant to the payment;
- any broker involvement;
- escrow or bond documents;
- missing or late lists;
- disputed work or materials; and
- proposed waivers, releases, and termination language.

Ask counsel for written answers to the exact decision questions. Examples:

- Does this project fall within §10-501’s custom-home definition?
- Is this payment consideration under the custom-home contract?
- Is it in advance of completed labor or received materials?
- How should the 5% language apply to this cumulative sequence?
- Does the mortgage or broker exception apply on these facts?
- Does the account or bond satisfy §10-504, and what proof is needed?
- What documentation should accompany each draw?
- What lien-release form and timing protect the owner at payment in full?

Counsel may answer that the statute does not resolve a point cleanly or that more facts are needed. That is a useful result. Change the worksheet status to **pending legal classification**, not **approved**.

### Handoff 4: lender or broker verification

If the builder cites the mortgage exception, ask the lender—not only the builder—to identify whether the loan is the kind described by Maryland §10-504(e), whether it finances the contract, and whether the lender’s construction-disbursement process imposes its own inspection or payment controls. A lender’s process can reduce risk without necessarily answering every statutory question.

If a licensed real estate broker holds money, identify the broker’s license, escrow account, receipt, and role in the transaction. Do not confuse the broker exception with a builder’s promise to deposit money later. The statutory text speaks to sums paid to the broker to be held in the broker’s escrow account.

### Handoff 5: closeout and final payment

Before final payment, confirm the occupancy or possession event used by the contract, the final account reconciliation, every required subcontractor and supplier status, and the signed releases. Maryland §9-114 ties the release checkpoint to settlement or payment in full between contractor and owner. A project can be substantially complete while a payment record or lower-tier release remains incomplete. Keep a punch list, but do not use a punch list to silently waive unresolved payment-protection or lien questions.

The next owner decision is whether the closeout package is complete enough for counsel, lender, and the owner to authorize payment. If not, identify the missing record and the person who must produce it. Avoid a vague “final paperwork pending” note.

## 7. Resolve exceptions and failure cases without losing the record

Most payment failures begin as category errors: a deposit is treated as a draw, an order is treated as receipt, a mortgage is treated as a blanket exception, a bond is treated as proof of any loss, or a generic release is treated as a complete lien waiver. Use the following branches to preserve the decision process.

### Failure case: “Every builder takes a deposit”

Market custom is not the Maryland classification. Record the amount, date, contract basis, and destination. If it is paid when the contract is signed and no labor is complete or materials received, mark it as an advance candidate. Ask the builder to identify the statutory path and ask counsel to review the 5% issue. Do not argue from what other builders do in other states.

### Failure case: “The materials are ordered, so the draw is earned”

Ordering can be a real project obligation and still leave the owner exposed to fabrication, delivery, storage, title, insurance, and refund risk. Ask for the material status and receipt proof. If the material is not received, keep the advance classification unless counsel says the facts support another result. If it is stored off-site, document location, segregation, ownership, insurance, and the amount allocated.

### Failure case: “The 5% exception means the builder can take 5% at every draw”

The phrase “does not total in excess of 5%” calls for cumulative tracking. Create one ledger for all advance consideration. Include the date, amount, basis, and status of every prior payment. If the contract price changes, preserve the old and new calculations. Ask counsel to resolve the boundary and whether a later payment is covered based on the complete sequence.

### Failure case: “The mortgage means no escrow and no special records”

Section 10-504 contains a mortgage-financing exception, but it does not make every mortgage a qualifying loan or erase the need to identify the parties, scope, draw schedule, change orders, payment lists, and releases. Ask the lender and counsel to verify the exact exception. Keep the statutory record questions open until answered.

### Failure case: “We are bonded”

Ask bonded for what purpose, by whom, for what amount, for whose benefit, for which project, and under which terms. A bond may be a license, performance, payment, or deposit-return instrument. Request the bond and verification from the surety. Compare it with §10-504(d), §10-302, the contract, and counsel’s advice. Never rely on a marketing phrase.

### Failure case: pooled escrow with no project accounting

Maryland §10-504 allows advances for more than one home to be held in a single escrow account. That does not eliminate the need for an accounting that connects your payment to your contract and permitted withdrawal. Ask for the account terms, ledger method, project balance, and statement access. Do not demand a legal conclusion from a bank statement; ask counsel whether the arrangement satisfies the statute.

### Failure case: late or incomplete subcontractor list

The list is due within 30 days after each progress payment under the contract requirement in §10-505. Calendar the due date. If late, send a factual notice identifying the payment date, due date, missing fields, and requested delivery. Compare later lists against earlier ones and known work. Ask counsel what payment, notice, suspension, or dispute rights exist; do not invent a self-help remedy.

### Failure case: change order approved after the work starts

Save the text, email, field note, or verbal summary, but label it **unexecuted request** until the required contract process is completed. Ask for the change description, price effect, schedule effect, and signatures. If the work affects the advance status, update the worksheet before payment. The Oregon sample is a useful comparison reminder that extra-cost work can be conditioned on a written signed change order, but it does not control Maryland. [Oregon change-order example](https://www.oregon.gov/ccb/Documents/Change-order-sample1.pdf)

### Failure case: comparing Maryland to another state

State payment and lien rules differ. Maine says its own law requires a written contract over $3,000 and limits a down payment to one-third unless exempt; California gives its own payment-schedule and down-payment guidance; Iowa describes a notice-of-commencement process; Texas sets a different residential lien-notice timing rule. Those sources are valuable as warnings against generalization, not as Maryland instructions. [Maine Attorney General guidance](https://www.maine.gov/ag/consumer-protection/consumer-help-topics/housing/home-construction-and-repair), [California CSLB guidance](https://www2.cslb.ca.gov/Consumers/Hire_A_Contractor/Home_Improvement_Contracts/What_Is_A_Contract.aspx), [Iowa Secretary of State guidance](https://sos.iowa.gov/businesses/mechanics-liens), and [Texas Property Code §53.056](https://tcss.legis.texas.gov/resources/PR/htm/PR.53.htm) each have their own jurisdictional scope.

### Failure case: a final release is signed too early

Do not sign an unconditional final release or authorize final payment while the required applicable subcontractor and supplier releases are missing, unclear, or outside the payment period you intend to close. Ask counsel to review conditional versus unconditional language and the scope of any exceptions. A release can be a serious legal document; it is not a receipt template.

## 8. Make the next decision and preserve a clean audit trail

After the worksheet is complete, choose one of four next decisions: proceed with a verified direct-payment structure, revise the contract to use escrow or an accepted alternative, document a verified statutory exception, or pause signing and payment until missing facts are resolved. The right answer depends on the actual Maryland project, not on a national deposit rule or the builder’s preferred vocabulary.

### Decision A: proceed with a direct-payment candidate

Use this result only when the payment basis is documented, the labor or materials status is clear, the contract and draw schedule support the payment, the cumulative advance calculation has been reviewed, and no unresolved exception or escrow question remains. “Direct-payment candidate” does not mean “pay immediately.” It means the record is ready for the final contract and legal review.

Before release, confirm the amount, payee, invoice, contract line, account, due date, and next required document. Have the builder acknowledge what the payment covers and what remains due. Save the approval with the payment ID.

### Decision B: revise to escrow or a separate joint-signature account

Use this result when the payment is early and the ordinary operating-account path does not provide the required protection. The revision should identify the account, signers, permitted withdrawals, statements, project ledger, return process, and interaction with the draw schedule. Have Maryland counsel review the account agreement and contract language together.

Do not let a revised payment destination remain outside the contract. Update the payment table, the draw schedule, the escrow exhibit, and the builder’s accounting process. If a check is used, confirm how the check name and deposit instruction match the statutory account language.

### Decision C: verify a corporate surety bond

Use this result only after receiving the bond document and verification. Record the surety, principal, obligee, amount, effective dates, covered payments, claim process, exclusions, cancellation terms, and maintenance requirement. Ask counsel to compare the instrument with §10-504(d) and the §10-302 reference. A bond is not a reason to stop collecting draw, payment, subcontractor, and release records.

### Decision D: pause for an exception or scope determination

Use this result when the builder relies on the mortgage-financing or broker-held-funds exception, when the work may be Maryland home-improvement work instead of a custom-home contract, when ownership or residence facts are unclear, or when the contract price and cumulative advances sit near the threshold. The pause request can be short and factual:

> Please hold the proposed payment until the parties have a written answer identifying the Maryland contract classification, payment basis, cumulative advance calculation, escrow or alternative-security path, and the documents supporting any claimed exception. Please attach the revised contract language and the responsible person for each record.

The wording is a project record, not a legal notice or a demand that the builder admit a violation.

### The closeout record to retain

Keep one folder, physical or digital, with:

- the scope-gate answers and ownership evidence;
- the executed contract and every version;
- the separately signed draw schedule;
- the payment ledger and all cumulative calculations;
- invoices, delivery receipts, inspection records, and draw approvals;
- escrow statements, account agreements, or surety documents;
- the 30-day subcontractor, supplier, and payment lists;
- all change orders and the change-order register;
- counsel’s written answers and unresolved questions;
- lender or broker exception verification;
- final payment, occupancy or possession records; and
- the signed lien releases and waivers.

Name files with the payment ID and date. Keep an index. If a record is missing, record that it is missing rather than silently treating the file as complete. If the contract changes, record why, who signed, when it became effective, and which payment calculations changed.

### Compact originality brief

**Current answers:** Maryland statutory pages state the escrow, exception, draw schedule, change-order, subcontractor-list, and lien-waiver requirements, while national or other-state consumer pages discuss deposits, written contracts, milestones, and lien protection at a broader level.

**Missing decision:** A Maryland homeowner still needs to decide, before signing, whether a specific proposed advance is ahead of completed labor or received materials and whether the proposed direct-payment path has a documented escrow, bond, financing, broker, or classification basis.

**Original contribution:** The Maryland advance-payment escrow-versus-direct-payment worksheet combines the scope gate, cumulative advance-percentage calculation, payment-status fields, responsible-person handoffs, statutory record checkpoints, exception questions, and four-state result.

**How it can be checked:** Recalculate each payment row from the signed contract price and payment ledger; compare each status to invoices, delivery or inspection records, account or bond documents, and the §10-505 record dates; then give the complete packet to Maryland counsel to test the code sections and project facts. The calculation is reproducible; the legal conclusion remains professional review.

The useful next action is therefore concrete: fill one worksheet row for the first proposed payment, attach the draft draw schedule, and send the unresolved rows—not just the builder’s summary—to Maryland counsel. If the builder will not provide the payment destination, protection documents, or required record sequence, that refusal is itself a reason to pause the pre-signing decision. For broader homeowner planning context, continue through the [Brictale blog](/blog) and [home learning library](/learn), but keep this payment question governed by Maryland facts and current Maryland law.

## Evidence

- Maryland Real Property §10-501 defines a custom home as a single-family dwelling constructed for the buyer's residence on land currently or previously owned by the buyer, and defines a custom home contract as a contract of at least $20,000 to furnish labor and material; the definition excludes work subject to Maryland Home Improvement Law. [Maryland Real Property §10-501](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-501.pdf). Scope: Maryland statutory definitions; applies to the subtitle's custom-home contracts and not automatically to every residential construction or renovation agreement.. Accessed: 2026-09-08.
- Maryland Real Property §10-502 states that consideration received by a custom home builder in connection with a custom home contract is held in trust for the buyer's benefit and that payments to subcontractors or suppliers must be consistent with that trust. [Maryland Real Property §10-502](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-502.pdf). Scope: Maryland statutory trust rule for consideration under a qualifying custom home contract.. Accessed: 2026-09-08.
- Maryland Real Property §10-504(a) requires a custom home builder to place consideration into escrow to the extent it is paid in advance of completion of the labor or receipt of the materials for which it is paid, unless a stated exception applies; an advance total not exceeding 5% of the home contract price need not be placed in escrow under that paragraph. [Maryland Real Property §10-504](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf). Scope: Maryland statutory escrow trigger and 5% exception; the article does not interpret how counsel should apply the threshold at or above the boundary.. Accessed: 2026-09-08.
- Maryland Real Property §10-504 permits a separate escrow account for each contract with buyer-and-builder signatures required for withdrawals, or a corporate surety bond in lieu of the escrow accounts, conditioned on returning money if the buyer becomes entitled to it and maintained until compliance with §9-114. [Maryland Real Property §10-504](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf). Scope: Maryland statutory alternatives to the ordinary escrow structure; account and bond terms must be checked against the current project documents.. Accessed: 2026-09-08.
- Maryland Real Property §10-504 limits escrow withdrawals to returning money to the buyer, paying documented labor or material claims according to the draw schedule, paying money forfeited under the sale contract, or final payment upon an occupancy permit or possession; the section does not apply to a qualifying mortgage-financed custom home contract or certain broker-held deposits. [Maryland Real Property §10-504](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-504.pdf). Scope: Maryland statutory withdrawal purposes and listed exceptions; these exceptions should not be generalized to other payment or contract requirements.. Accessed: 2026-09-08.
- Maryland Real Property §10-505 requires a written custom home contract with a separate, separately signed draw schedule; known primary subcontractors; written change orders specifying the changed work and price effect; bold warranty-program disclosure; a list within 30 days after each progress payment of subcontractors, suppliers, or materialmen who provided more than $500 of goods or services and which were paid; and lien waivers within a reasonable time after final payment. [Maryland Real Property §10-505](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/10-505.pdf). Scope: Maryland statutory contract-content and record-delivery requirements for custom home contracts.. Accessed: 2026-09-08.
- Maryland Real Property §9-114 requires a contractor, at settlement or payment in full, to give the owner a signed release of lien from each material supplier and subcontractor who provided work or materials under the contract; an owner is not subject to a lien or otherwise liable for work or materials included in the release. [Maryland Real Property §9-114](https://mgaleg.maryland.gov/2026RS/Statute_Web/grp/9-114.pdf). Scope: Maryland final-payment release rule; it is not a complete statement of every Maryland lien notice, waiver, or defense issue.. Accessed: 2026-09-08.
- Maryland Real Property §10-302 describes an individual or blanket corporate surety bond structure for deposits and provides a penalty schedule for blanket bonds based on deposits held, including full coverage from $10,000 to $75,000 and capped amounts at higher tiers. [Maryland Real Property §10-302](https://mgaleg.maryland.gov/mgawebsite/laws/StatuteText?article=grp&section=10-302). Scope: Maryland bond provisions referenced by §10-504; the article tells readers to verify the exact form, amount, obligee, issuer, and current application with counsel.. Accessed: 2026-09-08.
- Utah's Division of Professional Licensing says its optional residential construction agreement is intended as a detailed starting point for Utah homeowners and contractors, recommends that both parties read, complete, and sign each page, and directs legal questions to an attorney. [Residential Construction Agreement, Utah Division of Professional Licensing](https://commerce.utah.gov/dopl/contracting/construction-contract/). Scope: Utah comparison example only; it does not establish Maryland requirements.. Accessed: 2026-09-08.
- California's Contractors State License Board consumer guidance says a home-improvement contract should contain a detailed written payment schedule, payments generally cannot exceed the value of work performed except for the down payment, and scope or price changes must be in a written change order signed before the change. [What Is a Contract?, California Contractors State License Board](https://www2.cslb.ca.gov/Consumers/Hire_A_Contractor/Home_Improvement_Contracts/What_Is_A_Contract.aspx). Scope: California home-improvement guidance used only to illustrate that payment and change-order rules vary by jurisdiction; it is not Maryland law.. Accessed: 2026-09-08.
- Maine's Attorney General consumer guidance says Maine requires a written contract for home construction or repair over $3,000 and says a contractor cannot require more than one-third of the contract price as a down payment unless the parties agree to an exemption. [Home Construction and Repair, Maine Attorney General](https://www.maine.gov/ag/consumer-protection/consumer-help-topics/housing/home-construction-and-repair). Scope: Maine comparison example only; it must not be substituted for Maryland's custom-home statute.. Accessed: 2026-09-08.
- AIA's public instructions for its A112-2021 single-family home agreement describe a detailed milestone-based payment schedule and allow the owner to specify payment conditions such as lien releases, proof of payment to subcontractors or suppliers, and third-party inspections, while stating that AIA does not recommend a particular compensation method or payment amount. [Instructions: A112-2021 Standard Form of Agreement Between Owner and Home Builder](https://help.aiacontracts.com/hc/en-us/articles/4411612630547-Instructions-A112-2021-Standard-Form-of-Agreement-Between-Owner-and-Home-Builder-for-Design-and-Construction-of-a-Single-Family-Home). Scope: AIA contract-form guidance, not Maryland law and not a recommendation that an owner buy or use the form.. Accessed: 2026-09-08.
- Oregon's Construction Contractors Board publishes a sample construction change order stating that alterations involving extra cost are performed only after the parties enter a written change order that becomes part of the original contract and is accepted by homeowner and contractor. [Change Order, Oregon Construction Contractors Board](https://www.oregon.gov/ccb/Documents/Change-order-sample1.pdf). Scope: Oregon sample form used as a comparison workflow, not as a Maryland legal requirement.. Accessed: 2026-09-08.
- Iowa Secretary of State guidance says a general contractor seeking to preserve residential mechanic's lien rights must post a notice of commencement to Iowa's Mechanic's Notice and Lien Registry within ten days of starting work and provide a written notice to the property owner. [Mechanics Liens, Iowa Secretary of State](https://sos.iowa.gov/businesses/mechanics-liens). Scope: Iowa lien-notice comparison example only; it does not describe Maryland timing or filing rules.. Accessed: 2026-09-08.
- Texas Property Code §53.056 states that, for residential construction projects, a derivative claimant's notice of unpaid labor or materials is generally due by the 15th day of the second month after the month in which the labor or materials were provided, subject to statutory exceptions and the full code. [Texas Property Code Chapter 53, §53.056](https://tcss.legis.texas.gov/resources/PR/htm/PR.53.htm). Scope: Texas lien-notice comparison example only; it does not describe Maryland timing or filing rules.. Accessed: 2026-09-08.