Maryland Home Improvement (MHIC) Exam — All Questions
8 questions
Under Business Regulation §8-501, a Maryland home-improvement contract must be:
- a.Oral, as long as both parties agree on price
- b.In writing, legible, and signed by both the homeowner and the contractor✓
- c.In writing only for jobs over $50,000
- d.Filed with the county court before work begins
Bus. Reg. §8-501 requires every home-improvement contract to be in writing, legible, and signed by both parties — there is no dollar threshold that permits an oral contract. The writing must also disclose the contractor's license number, the scope, and the approximate dates.Md. Bus. Reg. §8-501
Which item is Maryland law NOT satisfied without in a written home-improvement contract?
- a.The homeowner's employer and salary
- b.The contractor's Social Security number
- c.The contractor's MHIC license number and a description of the work and materials✓
- d.A notarized appraisal of the home
Under §8-501 the contract must state the contractor's name, address, phone, and MHIC license number; any selling salesperson's name and license number; approximate start and completion dates; and a description of the work and materials. The license number and scope are core required disclosures; a homeowner's salary or a notarized appraisal are not.Md. Bus. Reg. §8-501
In Maryland, performing home-improvement work that requires an MHIC license without holding one is:
- a.A violation of the Home Improvement Law that may be charged as a misdemeanor, with civil penalties✓
- b.Permitted as long as the homeowner consents in writing
- c.A federal felony
- d.Allowed for jobs under $25,000
Contracting for home improvement without the required MHIC license violates the Home Improvement Law and can be prosecuted as a misdemeanor, with additional civil penalties. It also cuts off the contractor's practical remedies and bars the homeowner from the Guaranty Fund.Md. Bus. Reg. Title 8 (unlicensed activity)
The Home Improvement Guaranty Fund exists primarily to:
- a.Pay contractors when a homeowner refuses to pay
- b.Fund the MHIC's advertising budget
- c.Insure contractors against jobsite injuries
- d.Reimburse homeowners for actual losses caused by a licensed contractor's acts or omissions✓
The Guaranty Fund compensates homeowners for actual monetary losses — such as abandoned or defective work — caused by a LICENSED home-improvement contractor. It is a consumer-protection fund financed by contractor assessments, not a contractor's collection tool or liability insurance.Md. Bus. Reg. Title 8, Home Improvement Guaranty Fund
What is the maximum a homeowner can recover from the Home Improvement Guaranty Fund on a claim against one contractor?
- a.$10,000 per claimant
- b.$30,000 per claimant, or the amount the homeowner paid the contractor, whichever is less✓
- c.Unlimited actual damages
- d.$100,000 per claimant
Recovery from the Guaranty Fund is capped at $30,000 per claimant against a given contractor, or the amount the homeowner actually paid that contractor, whichever is less. The Fund reimburses the homeowner's actual loss up to that ceiling.Md. Bus. Reg. Title 8, Home Improvement Guaranty Fund
A homeowner hired an UNLICENSED person for a remodel that went badly. Can the homeowner recover from the Guaranty Fund?
- a.Yes, the Fund covers all remodeling losses
- b.Yes, but only up to $5,000
- c.No — the Fund is only available when the contractor was MHIC-licensed at the time the contract was signed✓
- d.Yes, if the homeowner files within 24 hours
The Guaranty Fund only pays claims arising from work by LICENSED contractors. A claim based on work by an unlicensed contractor is dismissed without a hearing. This is why Maryland homeowners are urged to verify a contractor's MHIC license before signing.Md. Bus. Reg. Title 8, Home Improvement Guaranty Fund
Which of the following is generally considered 'home improvement' subject to MHIC licensing?
- a.Replacing the roof and installing new siding on an existing house✓
- b.Building a new commercial warehouse
- c.Grading a raw lot before any home exists
- d.Routine interior housecleaning
Home improvement covers the repair, replacement, remodeling, or alteration of an existing residence — replacing a roof and installing siding qualifies. New commercial construction, work on a bare lot with no residence, and non-construction services like cleaning fall outside the home-improvement definition.Md. Bus. Reg. §8-101 (definition of home improvement)
At roughly what contract value does Maryland require the work to be performed by an MHIC-licensed home-improvement contractor?
- a.$5,000 or more
- b.$2,500 or more
- c.$10,000 or more
- d.$500 or more✓
A home-improvement job of $500 or more must be performed by an MHIC-licensed contractor, and the contract must be in writing. The written-contract requirement itself has no dollar floor once the work is a home improvement.Md. Bus. Reg. §8-501; MHIC threshold