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 Maryland homeowner hires a licensed MHIC contractor to build a $28,000 addition. The contractor abandons the job after receiving $18,000 in payments. The homeowner files a MHIC Guaranty Fund claim. What is the maximum amount the Guaranty Fund will pay for this single claim?

    Answer: $15,000

    The Maryland MHIC Guaranty Fund caps recovery at $15,000 per claim regardless of actual loss. Even though the homeowner is owed more, the statutory ceiling limits the Fund's payout to $15,000.

  2. Which of the following situations is specifically EXEMPT from Maryland Home Improvement Law licensing requirements?

    Answer: An owner-occupant making improvements solely to their own primary residence with their own labor

    Under the Maryland Home Improvement Law, an owner-occupant performing improvements on their own primary residence using their own labor is explicitly exempt from MHIC licensing. This exemption does not extend to subcontractors or to owners hiring workers.

  3. A licensed MHIC contractor enters into a $7,500 home improvement contract. Under Maryland law, what is the maximum deposit the contractor may legally collect before beginning any work?

    Answer: $1,000 or one-third of the contract price, whichever is less

    Maryland Home Improvement Law limits the initial deposit to $1,000 or one-third of the total contract price, whichever is LESS. For a $7,500 contract, one-third is $2,500, so the statutory cap is $1,000.

  4. A licensed MHIC contractor performs work under a written contract. Upon project completion, a dispute arises and the contractor files a mechanic's lien on the homeowner's property. The homeowner later discovers the contractor performed work on TWO other Maryland jobs without written contracts that year. What is the likely consequence for the contractor regarding MHIC licensure?

    Answer: The contractor may face license suspension or revocation for repeated contractual violations

    Repeated failure to use written contracts is a violation of the Maryland Home Improvement Law. The MHIC Commission can discipline licensees — including suspension or revocation — for a pattern of statutory violations, even if the individual liens are legally separate matters.

  5. Under Maryland Home Improvement Law, which of the following disclosures must appear in EVERY home improvement contract regardless of project size?

    Answer: The contractor's MHIC license number, and a statement that the contractor is licensed by the Maryland Home Improvement Commission

    Every MHIC contract must include the contractor's MHIC license number and the disclosure that the contractor is licensed by the Maryland Home Improvement Commission. This is a non-negotiable statutory requirement. The three-day rescission right applies to door-to-door sales under separate law, not to all home improvement contracts.

  6. A homeowner wins a civil court judgment of $22,000 against a licensed MHIC contractor for defective work. The contractor has no assets. The homeowner then seeks recovery from the MHIC Guaranty Fund. Which condition would disqualify this claim?

    Answer: The contractor's license expired 45 days before the work was completed

    To recover from the MHIC Guaranty Fund, the contractor must have been licensed at the time the work was performed. If the license had expired before project completion, the contractor was unlicensed for that work, and the Guaranty Fund does not cover claims arising from work performed by an unlicensed contractor.