Md. Builders Nailed in Home Building Scam

June 2, 2005

Maryland Attorney General J. Joseph Curran, Jr. announced that his Consumer Protection Division has issued a cease and desist order requiring two related home builders and their principals to pay $140,203 in restitution for taking deposits and payments from consumers, failing to complete construction or refund the payments, and misusing a home builder registration number.

According to charges filed by the Division, LaDova Heights LLC and Rehco Company Inc. of Bethesda, Maryland are owned by Robert Hahn and David Hahn. The Division’s order found reportedly that LaDova Heights, LLC, an unregistered builder, entered into contracts with consumers to construct homes in Prince George’s County, accepted payments from those consumers, and promised to complete the homes.

To date, however, LaDova Heights LLC has reportedly not completed the homes or refunded the monies paid. The charges further allege that LaDova Heights used the registration number of Rehco Company Inc. in its contracts with consumers.

The Division reportedly found that LaDova Heights LLC violated the Maryland New Home Deposits Act by failing to place deposits and payments into an escrow account or having a surety bond to cover the deposit, and violated the Home Builder Registration Act by acting as a new home builder while not registered as required by law and by fraudulently using the registration number of another builder. The Division also found that Rehco Company Inc. fraudulently allowed its registration number to be used.

” Under Maryland law, home builders must be registered before they can enter into contracts to build homes for consumers, and they must protect a customer’s deposit until the house is completed or they refund the deposit,” said Curran. Curran urged consumers to check with the Home Builder Registration Unit of his office before putting down a deposit on a home.

The Division’s ex parte cease and desist order immediately bars LaDova Heights, LLC, Rehco Company Inc., Robert Hahn, and David Hahn from acting or offering to act as a home builder in the State of Maryland, and orders them to pay restitution and costs. At a hearing in August, the Division will ask for an order requiring LaDova Heights, LLC, Rehco Company Inc., and their principals, Robert Hahn and David Hahn to pay a $1,000 civil penalty per day of unlawful practice.

The public hearing on the charges will be held at the Maryland Office of Administrative Hearings, 11101 Gilroy Road, Hunt Valley, Md., on Aug. 26, 2005.

Consumers who may have had problems with LaDova Heights, LLC, Rehco Company Inc., Robert Hahn, or David Hahn should call the Home Builder Registration Unit immediately at (410) 576-6573 or toll-free 1-877-259-4525.

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