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A Rockville-based home builder and its owner have been charged with violating the Consumer Protection Act, according to Maryland Attorney General Douglas F. Gansler's office.

The charges allege that contracts written by Smart Development/Premiere Homes L.C., which is owned by Edward Kevin Smart, contain illegal clauses that the company used to terminate those contracts with consumers without liability if it failed to build the promised houses, according to an Aug. 26 press release from Gansler's office.

Smart, who is listed as the company's president on the Premiere Homes Web site, said he had no comment on the charges when contacted last week.

The charges also allege that Premiere Homes, which is based on Research Boulevard, "repeatedly took advantage of this termination clause when favorable market conditions caused housing prices to rise, by cancelling its contracts to build homes after one year and refusing to build the homes unless consumers signed new contracts agreeing to pay Premiere Homes more money," according to the press release.

"Under Maryland law, a home builder that fails to build homes cannot cancel its contracts with consumers without liability," Gansler said in the press release. "Consumers should be able to receive their promised homes."

Additionally, the charges allege that in one of the developments being built by Premiere Homes in Prince George's County, the builder experienced "regulatory difficulties that it failed to timely address." As a result, construction in the neighborhood was delayed for years, according to the press release.

Premiere Homes continued to sell the houses without telling consumers about the issues and then cancelled consumers' contracts when it was unable to build the houses in one year and property values had risen sharply, the press release states.

A hearing on the statement of charges is scheduled to begin Jan. 12 at the Maryland Office of Administrative Hearings, located at 11101 Gilroy Road in Hunt Valley.