MHIC - Maryland Home Improvement Contractor Contracts and Estimating Questions and Answers

Question 1

According to Maryland Home Improvement Law, what is the maximum deposit a contractor can accept from a homeowner before work begins?

Accepted Answer

1/3 of the contract price.

Answer

50% of the contract price.

Answer

An amount agreed upon by both parties, not to exceed $5,000.

Answer

The total cost of materials needed for the project.

Question 2

A contractor provides a homeowner with a contract for a new deck. The contract is signed in the homeowner's kitchen. Under the Maryland Door-to-Door Sales Act, what is the standard cancellation period for the homeowner?

Accepted Answer

5 business days.

Answer

24 hours from signing.

Answer

3 business days.

Answer

10 business days.

Question 3

Which of the following is NOT a required element in a Maryland Home Improvement contract?

Accepted Answer

The homeowner's driver's license number.

Answer

The contractor's MHIC license number.

Answer

Approximate start and substantial completion dates.

Answer

A description of the work to be performed and materials to be used.

Question 4

A salesperson for a licensed home improvement contractor finalizes a deal with a homeowner. According to MHIC regulations, which of the following must be included on the contract?

Accepted Answer

The salesperson's name and MHIC license number.

Answer

The salesperson's home address.

Answer

The contractor's federal tax ID number.

Answer

The name of the company that supplies the materials.

Question 5

A contractor is preparing an estimate for a large kitchen remodel. To ensure the estimate is comprehensive and professional, which practice should the contractor follow?

Accepted Answer

Itemize the costs for labor, materials, permits, and other major expenses.

Answer

Provide a single, lump-sum price with no breakdown to keep it simple.

Answer

Include a clause that all material prices are subject to change without notice.

Answer

Base the estimate on a verbal description of the project to save time.

Question 6

If a mandatory arbitration clause is included in a Maryland home improvement contract, what specific action must be taken by the parties regarding this clause?

Accepted Answer

Both parties must initial and date the contract next to the clause.

Answer

The clause must be printed in red ink.

Answer

The homeowner must have it reviewed by their attorney.

Answer

The contractor must pay all potential arbitration fees upfront.