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Maryland home improvement contract interest rates

I am a licensed contractor in Maryland and my contract calls for 24% interest on unpaid balances when they are past due. Is it legal for me to charge the 24% interest If it's prejudgment? And once I get a judgment then the interest rate would change to the legal rate in Maryland. Or do I have to change my contract so that it's at the post-judgment interest rate?

2 replies

May 19, 2020

24% is the max you are allowed to charge in MD. YOu do not have to change your contract, but you cannot chargfe 24% post judgment.

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May 19, 2020

I represent contractors of all sizes. You will not recover a 24% penalty interest rate in any Maryland court. Something closer to market rates may be allowed. Trial courts exercise broad discretion to award interest, both contract imposed or prejudgment interest on certain liquidated sums. Where your entitlement to recover is legitimately contested, the court is not likely to award any.

You are best to include a reasonable attorney fee provision, and an arbitration provision.

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