19.4.12.6 Escrow Agreement for Latent Defects (Form HUD-92414M)

A. For New Construction or Sub-Rehabilitation Projects, at or before Final Endorsement, General Contractor must ensure the correction of any Latent Defects through the establishment of an escrow to cover the cost of repair or remediation of Latent Defects discovered within twelve months of the Date of Final Completion. See Chapter 12, Section 12.16.S. HUD does not require the establishment of this escrow if the General Contractor has provided assurance for completion of latent defects using a performance bond (using form HUD-92452M). See Chapter 12, Section 12.16.S.1.