Financial Management and Consumer Protection Flashcards
7 cards from real MHIC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Management and Consumer Protection flashcards as text
Under Maryland law, a change order that increases the cost or scope of a home improvement project must be:
Answer: In writing and signed by both the contractor and the homeowner
Maryland requires change orders to be written and signed by both parties since they modify the legally binding original contract terms.
If a licensed Maryland home improvement contractor abandons a project midway, a homeowner's first avenue for compensation is:
Answer: Applying to the Maryland Home Improvement Guaranty Fund
The MHIC Guaranty Fund is specifically designed to compensate homeowners when a licensed contractor abandons a project or fails to perform contracted work.
Which of the following is a required element of a Maryland home improvement contract?
Answer: The approximate start and completion dates of the project
Maryland law mandates that home improvement contracts include approximate start and completion dates so homeowners have clear timeline expectations.
When a homeowner has a financial dispute with a contractor over a completed home improvement project, what should be the FIRST step?
Answer: Attempt direct resolution with the contractor
Before escalating to regulatory agencies or courts, the homeowner should attempt to resolve the dispute directly with the contractor, as many disputes are resolved informally.
Maryland home improvement contractors are required to retain their financial and business records for a minimum of:
Answer: 3 years
MHIC regulations require contractors to maintain business and financial records for at least 3 years, enabling audits and dispute resolution.
A valid Maryland home improvement contract must specify which of the following regarding payment?
Answer: The total contract price and the payment schedule
Maryland law requires the contract to clearly state the total price and payment schedule so both parties understand the financial obligations.
An unpaid subcontractor on a Maryland home improvement project may best protect their right to compensation by:
Answer: Filing a mechanics lien on the owner's property
Maryland mechanics lien law extends lien rights to subcontractors and suppliers, allowing them to file a lien against the property to secure unpaid compensation.