Delaware Code Title 6 Sec. 3602 – New home construction; unfinished work and the escrow of moneys
(a) If any unfinished work is discovered prior to or at the time of the previously agreed upon final settlement date on new residential real property or a new dwelling, the vendor and/or seller shall be required to set aside from the proceeds of the sale a sum of money equal to the contractual cost required to complete any such unfinished work. If the contract does not set forth the cost, the escrowed amount shall be the fair market value of completing said unfinished work. The escrow agreement shall specify the unfinished work at issue.
Terms Used In Delaware Code Title 6 Sec. 3602
- Buyer: means any individual, partnership, corporation or trustee purchasing any estate or interest in a new residential real property or new dwelling. See Delaware Code Title 6 Sec. 3601
- Contract: A legal written agreement that becomes binding when signed.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Final settlement: means the time at which the parties have signed and delivered all papers and consideration to convey title to the estate or interest in a new residential real property or new dwelling. See Delaware Code Title 6 Sec. 3601
- New dwelling: means a new multi-family, single family or townhouse dwelling not previously occupied and constructed for use as a residence. See Delaware Code Title 6 Sec. 3601
- Seller: means any individual, partnership, corporation or trustee transferring new residential property or a new dwelling. See Delaware Code Title 6 Sec. 3601
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Unfinished work: means a condition in a new residential real property or new dwelling which fails to comply with the work agreed upon by the vendor and/or seller in the specifications, contract terms and applicable building codes. See Delaware Code Title 6 Sec. 3601
- Vendor: means any person, firm, partnership, corporation or other entity that contracts to sell new dwellings or new residential real property. See Delaware Code Title 6 Sec. 3601
(b) Said moneys shall be held in escrow for no longer than 30 days following the completion of the unfinished work. No buyer may refuse to release moneys escrowed pursuant to this section for unfinished work not specified pursuant to subsection (a) of this section.
(c) If the unfinished work specified at the final settlement has not been remedied upon the expiration of 90 days from the date of final settlement or a date agreed upon by the parties and set forth in the escrow agreement, the moneys held in escrow pursuant to this section shall be released to the buyer.
(d) Notwithstanding the above, this section shall apply only when the estimated cost to complete said unfinished work equals 1 percent or more of the contract price or when the aggregate estimated costs of completing all unfinished work equals 1 percent or more of the contract price.
(e) This section shall not apply when a buyer unilaterally requests that settlement take place on a date prior to the previously agreed upon final settlement date.
(f) To the extent the seller/vendor and the buyer agree that the buyer may withhold, at the final settlement, moneys otherwise subject to escrow under this section, such an arrangement shall be deemed in compliance with this section.