MHIC Basic 2 — Questions and Answers
Question 1: In Maryland, which document gives a contractor the legal right to place a lien on a property for unpaid home improvement work?
- A mechanics' lien filed with the county circuit court (Correct answer)
- A lien waiver signed by the homeowner
- A notice of intent issued by MHIC
- A construction lien certificate from the county assessor
Correct answer: A mechanics' lien filed with the county circuit court
In Maryland, a contractor who has not been paid for home improvement work may file a mechanics' lien with the circuit court in the county where the property is located.
Maryland's mechanics' lien law (Real Property Article §9-101 et seq.) gives contractors, subcontractors, and suppliers a statutory right to file a lien against property when they have not been paid for work or materials. The lien must be filed with the circuit court within 180 days of the last day of work. A lien attaches to the property and can ultimately lead to a court-ordered sale of the property to satisfy the debt.
Question 2: A homeowner hires a contractor to build a deck. The contractor completes the work but is not paid. Under Maryland mechanics' lien law, within how many days of completing the work must the contractor file a lien?
- 180 days (Correct answer)
- 30 days
- 90 days
- 365 days
Correct answer: 180 days
Under Maryland law, a mechanics' lien must be filed within 180 days of the last date work was performed or materials were furnished.
Maryland mechanics' lien law requires that a petition to establish a lien be filed in the circuit court within 180 days of the last day of work or the last delivery of materials. Missing this deadline forfeits the lien right entirely. Contractors should track project completion dates carefully and move promptly if payment is not received. In addition to the filing deadline, procedural requirements such as proper service of the lien petition must be followed.
Question 3: What is the primary purpose of requiring MHIC licensure for home improvement contractors in Maryland?
- To protect consumers from unqualified and dishonest contractors (Correct answer)
- To generate state revenue through licensing fees
- To restrict competition in the home improvement industry
- To ensure all contractors join a professional trade association
Correct answer: To protect consumers from unqualified and dishonest contractors
The primary purpose of MHIC licensure is to protect Maryland consumers by ensuring that home improvement contractors meet minimum standards of competence and integrity.
Maryland enacted the Home Improvement Law to address widespread consumer fraud and complaints in the home improvement industry. By requiring contractors to be licensed, pass an exam, demonstrate financial responsibility, and comply with ongoing regulations, the state ensures baseline competency and accountability. The Guaranty Fund, complaint process, and disciplinary system all serve this consumer protection mission.
Question 4: A Maryland home improvement contract worth $15,000 must be in writing because:
- All home improvement contracts in Maryland must be in writing regardless of amount (Correct answer)
- Only contracts over $25,000 require written form
- Oral contracts are permitted for amounts under $10,000
- Written contracts are only required for projects lasting more than 30 days
Correct answer: All home improvement contracts in Maryland must be in writing regardless of amount
Maryland Home Improvement Law requires ALL home improvement contracts to be in writing, regardless of the contract amount. There is no monetary threshold below which oral contracts are permitted.
Unlike some states that only require written contracts above a certain dollar threshold, Maryland Home Improvement Law requires all home improvement contracts to be in writing. This applies to a $500 repair job as much as a $500,000 renovation. The written contract must include all required elements such as the contractor's license number, scope of work, price, start and completion dates, and the right-to-cancel notice.
Question 5: Which of the following best describes 'home improvement' under Maryland law?
- Any alteration, repair, or improvement to an existing residential structure (Correct answer)
- Only new construction of residential properties
- Landscaping and tree trimming services
- Any commercial property renovation
Correct answer: Any alteration, repair, or improvement to an existing residential structure
Under Maryland law, 'home improvement' is defined as an alteration, repair, or improvement to an existing residential structure. New construction and commercial work are excluded.
Maryland Business Regulation Article §8-101 defines home improvement as work performed on an existing owner-occupied or residential property, including but not limited to additions, alterations, conversions, improvements, modernizations, remodeling, repairs, and replacements. This definition covers a broad range of work from small repairs to major renovations. New construction (building a new home from the ground up) and commercial projects are not covered by the MHIC law.
Question 6: A homeowner notices that their newly completed renovation has significant defects. What is the FIRST step the homeowner should take to address this under MHIC's process?
- Contact the contractor directly in writing to request repairs (Correct answer)
- Immediately file a complaint with MHIC
- File a lawsuit in circuit court
- Apply for compensation from the Guaranty Fund
Correct answer: Contact the contractor directly in writing to request repairs
The homeowner should first contact the contractor in writing to request that defects be corrected. Direct communication is generally the first step before escalating to MHIC or the courts.
While homeowners certainly have the right to file complaints with MHIC or pursue litigation, it is generally best practice—and often required before other remedies—to first give the contractor a written opportunity to remedy defects. Many MHIC complaints are resolved through this direct communication. If the contractor refuses to respond or address legitimate complaints, the homeowner can then escalate to MHIC, seek mediation, or pursue legal action.
MHIC Basic 2
In Maryland, which document gives a contractor the legal right to place a lien on a property for unpaid home improvement work?