Practice Test Geeks(MHIC) Maryland Home Improvement Contractor Practice Test
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Basic Flashcards

6 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 6 Basic flashcards as text

  1. A licensed MHIC contractor completes a home improvement project and the homeowner pays in full. Three weeks later, the contractor discovers a subcontractor was not paid and files a mechanic's lien. Under Maryland law, which statement best describes the homeowner's exposure?

    Answer: The homeowner may be liable for the lien amount if the contractor failed to provide a waiver of lien upon final payment

    Even after paying the general contractor in full, a homeowner can be exposed to a mechanic's lien from unpaid subcontractors or suppliers. A properly executed lien waiver from the contractor upon final payment is the homeowner's primary protection. Licensed MHIC status does not automatically shield the homeowner from downstream lien claims.

  2. Under the Maryland Home Improvement Law, which of the following scenarios would MOST LIKELY result in a contract being deemed unenforceable by the contractor against the homeowner?

    Answer: The contract omitted the contractor's MHIC license number and the homeowner's right to rescind

    Maryland's Home Improvement Law (Business Regulation Article §8-601) requires that home improvement contracts include the contractor's MHIC license number and provide notice of the homeowner's three-day right of rescission. Omitting these mandatory disclosures renders the contract voidable at the homeowner's option and may be unenforceable by the contractor. Notarization and specific start dates are not statutory requirements.

  3. An MHIC licensee whose license has lapsed for 14 months wants to reinstate it. Under MHIC regulations, what is the CORRECT outcome?

    Answer: The licensee must reapply as a new applicant, retake the examination, and meet all current bonding and insurance requirements

    A lapsed MHIC license that has been expired for more than 12 months cannot simply be reinstated with a late fee. The individual must go through the full new-applicant process, including retaking the licensing examination and satisfying all current requirements for bonding ($20,000 surety bond) and insurance. The 12-month grace window for late renewal with a penalty fee has already passed at 14 months.

  4. A Maryland homeowner files a claim against the MHIC Guaranty Fund after a licensed contractor abandons a $45,000 project. The homeowner has already obtained a civil judgment for $38,000. What is the MAXIMUM amount the Guaranty Fund will pay on this single claim?

    Answer: $20,000 — the statutory per-claim cap from the Guaranty Fund

    The MHIC Guaranty Fund has a statutory cap of $20,000 per claim, regardless of the contract value or the civil judgment amount. Even though the homeowner obtained a $38,000 judgment, the Guaranty Fund will pay no more than $20,000 on a single qualifying claim. Additional recovery would require pursuing the contractor's personal assets or other remedies.

  5. Which of the following individuals is EXEMPT from obtaining an MHIC license under Maryland Business Regulation Article Title 8?

    Answer: An owner-occupant who contracts directly with specialty trade subcontractors to renovate their own primary residence for personal use

    Maryland law exempts owner-occupants who act as their own general contractor on their primary residence from the MHIC licensing requirement, provided the work is for personal use and not for resale within a specified period. A real estate broker managing third-party properties is acting as a contractor for others and is not exempt. A sole proprietor charging for labor and materials on others' homes requires an MHIC license, and the annual accumulation exception does not apply to the handyman scenario.

  6. A licensed MHIC contractor receives a written consumer complaint filed with the Maryland Home Improvement Commission. Under MHIC regulations, within how many days must the contractor respond in writing to the Commission's notice of complaint?

    Answer: 30 days

    Under MHIC regulations, a licensed contractor who receives notice of a consumer complaint from the Commission must submit a written response within 30 days of the notice. Failure to respond within this window can itself constitute grounds for disciplinary action, separate from the underlying complaint. The 10- and 15-day options are too short, and 45 days exceeds the regulatory timeframe.