Practice Test Geeks(MHIC) Maryland Home Improvement Contractor Practice Test
← All MHIC Flashcard Decks

Knowledge 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 Knowledge flashcards as text

  1. Under Maryland Home Improvement Law, a licensed MHIC contractor completes a $12,000 kitchen remodel. The homeowner later discovers the contractor never pulled a required building permit, causing the county to order demolition of the unpermitted work. To what maximum amount can the homeowner recover from the Maryland Home Improvement Guaranty Fund for this single claim?

    Answer: $10,000

    The Maryland Home Improvement Guaranty Fund caps recovery at $10,000 per claim and $20,000 per contractor lifetime. Even though the project cost $12,000 and resulted in demolition, the statutory per-claim limit is $10,000. Homeowners must pursue any remaining damages through civil litigation.

  2. A Maryland MHIC licensee is hired to renovate a detached garage into a home office. Midway through the project, the homeowner verbally agrees to add $8,500 worth of electrical upgrades. The contractor completes all work but the homeowner refuses to pay for the verbal change order. Under Maryland Home Improvement Law, which outcome is most accurate?

    Answer: The contractor cannot enforce the verbal change order because Maryland law requires all home improvement contracts and change orders to be in writing

    Maryland Home Improvement Law requires that all home improvement contracts AND any changes or modifications to those contracts must be in writing and signed by both parties. A verbal change order, regardless of the amount, is unenforceable under the statute. The contractor's failure to document the change order in writing forfeits the right to collect that amount.

  3. An MHIC-licensed contractor in Maryland completes a roofing project. Three years later, the homeowner sells the property. Two years after the sale, the new owner discovers that the roof was negligently installed and leaks. The new owner files a complaint with the Maryland Home Improvement Commission. Which statement is CORRECT?

    Answer: The Commission can investigate but the Guaranty Fund claim is barred because the claimant was not the original contracting party

    Maryland's Guaranty Fund is available only to the original contracting homeowner — the consumer who actually entered into the home improvement contract with the licensed contractor. A subsequent purchaser of the property does not have standing to make a Guaranty Fund claim, even if they suffer financial harm from the contractor's defective work. The new owner's remedies lie in civil court against the seller or contractor.

  4. A Maryland home improvement contractor holds an active MHIC license. The contractor's sole employee — who does all installation work — is injured on a job site. An investigation reveals the contractor has never carried workers' compensation insurance. Under Maryland law, which consequence is MOST ACCURATE?

    Answer: The MHIC Commission may suspend or revoke the contractor's license because proof of workers' compensation coverage is a continuing license requirement

    Maryland MHIC licensees who employ workers are required to maintain workers' compensation insurance as a condition of licensure. Failure to carry required insurance is grounds for disciplinary action by the Commission, including suspension or revocation of the MHIC license — in addition to any penalties under workers' compensation law. No waiver signed by an employee overrides this statutory requirement.

  5. An MHIC contractor collects a $6,000 deposit on a $20,000 home addition project scheduled to begin in 60 days. Before construction starts, the contractor uses the entire deposit to pay off business debts unrelated to this project. Under Maryland Home Improvement Law, the contractor has:

    Answer: Committed a criminal act independent of whether the project is ultimately completed

    Maryland Home Improvement Law makes it a criminal offense — not merely a civil violation — to misappropriate funds received from a homeowner for a home improvement project, regardless of whether the project is eventually completed. Using a deposit for unrelated business expenses constitutes misappropriation. The criminal liability attaches at the moment of misuse, not upon project failure.

  6. A licensed MHIC contractor performs work on a property where the homeowner later files for bankruptcy. The bankruptcy trustee contests the contractor's mechanics lien, arguing it was filed one day after Maryland's statutory deadline. The contractor argues the final day fell on a Sunday, so the filing on Monday was timely. Which rule applies?

    Answer: The lien is timely; when a statutory deadline falls on a Sunday or legal holiday, Maryland law permits filing on the next business day

    Under Maryland's general rules of statutory construction, when any statutory deadline falls on a Sunday or a legal holiday, the act may be performed on the next succeeding business day. This principle applies to mechanics lien filing deadlines. Therefore, a lien deadline falling on Sunday is validly met by filing on Monday. Note that federal bankruptcy automatic stays affect collection actions, not the validity of perfected liens filed before the petition.