MD Home Improvement Law Flashcards

A licensed Maryland plumber is hired directly by a homeowner to replace corroded supply lines throughout the house and simultaneously install a new utility sink in the basement laundry room. The total project value is $4,200. Under the Maryland Home Improvement Law, which statement correctly describes the plumber's MHIC licensing obligation?

Answer: No MHIC license is required because all tasks fall within the scope of the plumber's existing state plumbing license.

Maryland Home Improvement Law exempts trades licensed under other Maryland occupational licensing boards—including plumbers—when all work performed falls within the scope of that underlying license. Because both the supply line replacement and the sink installation are plumbing tasks within the plumber's license authority, no separate MHIC license is required. The exemption is scope-based, not value-based.

A homeowner in Bethesda signs an MHIC-compliant home improvement contract in the contractor's office after scheduling the meeting herself. The contract is for $18,000. She later changes her mind and mails a cancellation notice on the third business day after signing. Which of the following correctly describes her legal position?

Answer: The cancellation is untimely because the right of rescission under Maryland Home Improvement Law applies only to contracts solicited at the consumer's residence.

Maryland's three-day right of rescission for home improvement contracts applies specifically to contracts solicited at the homeowner's residence—not to contracts negotiated and signed at the contractor's place of business. When the homeowner travels to the contractor's office and initiates the transaction there, the FTC-derived 'cooling-off' rule does not attach, and no statutory right to cancel exists under the Home Improvement Law.

A licensed home improvement contractor completes a $30,000 basement finishing project but refuses to return to correct a water infiltration defect caused by improper membrane installation. The homeowner files a complaint with the Maryland Home Improvement Commission seeking Guaranty Fund recovery. What is the maximum amount the Guaranty Fund can pay out on a single claim against this contractor?

Answer: $15,000

The Maryland Home Improvement Commission's Guaranty Fund caps individual claimant recovery at $15,000, regardless of the contract value or actual damages suffered. The Fund also carries a separate aggregate cap per licensee. A homeowner with damages exceeding $15,000 must pursue the remainder through civil litigation or arbitration.

During a $45,000 kitchen renovation, the homeowner orally directs the contractor to upgrade the countertop material, adding $3,800 to the contract. The contractor performs the upgrade but the homeowner refuses to pay the additional amount, claiming no written change order was executed. Under Maryland Home Improvement Law, which outcome is most legally accurate?

Answer: The contractor cannot recover the $3,800 because all changes to an MHIC contract must be in a written and signed change order to be enforceable.

Maryland Home Improvement Law requires that any change to a home improvement contract—including additions to scope or price—be documented in a written change order signed by both parties before the change is performed. An oral modification, even one accepted by the homeowner through performance, does not satisfy this statutory writing requirement, leaving the contractor without a contractual basis to demand additional compensation.

An unlicensed contractor performs $8,000 worth of deck construction for a homeowner. When a dispute arises, the contractor files suit to collect the unpaid balance. Which of the following most accurately describes the likely outcome under Maryland Home Improvement Law?

Answer: The contractor is barred from recovering any compensation and may also face criminal misdemeanor charges for unlicensed contracting.

Under Maryland Business Regulation Article § 8-601, performing home improvement work without an MHIC license is a misdemeanor punishable by fine and/or imprisonment. Additionally, Maryland courts apply the 'illegal contract' doctrine to deny any recovery—in contract, quasi-contract, or quantum meruit—to an unlicensed contractor, even if the homeowner would otherwise be unjustly enriched. The licensing requirement is treated as a public-protection statute, not a mere technicality.

A Maryland home improvement contractor is licensed and holds a valid surety bond. She completes a project but the bond is cancelled by the surety three months after project completion due to a premium lapse. Six months after cancellation, the homeowner discovers latent defects caused by faulty workmanship. The homeowner seeks to recover against the surety bond. Which statement is correct?

Answer: The homeowner cannot recover from the surety because the bond was cancelled before the claim arose, and bond coverage does not extend to latent defects discovered after cancellation.

A surety bond's coverage is contingent on the bond being active at the time a valid claim arises. Once a bond is cancelled, the surety has no ongoing obligation to cover claims—even those rooted in workmanship that occurred during the coverage period—if those claims are filed or the defects discovered after cancellation. The homeowner's remedy is a direct civil action against the contractor or, if eligible, an application to the MHIC Guaranty Fund (subject to its own eligibility requirements and caps).