MHIC Financial Management and Consumer Protection

Question 1

Under Maryland Home Improvement Law, what is the maximum deposit a contractor may collect from a homeowner at the time of contract signing?

Accepted Answer

One-third of the total contract price

Answer

10% of the total contract price

Answer

25% of the total contract price

Answer

50% of the total contract price

Question 2

The Maryland Home Improvement Guaranty Fund is primarily designed to:

Accepted Answer

Compensate homeowners harmed by licensed contractors who fail to complete or properly perform work

Answer

Provide low-interest loans to licensed contractors

Answer

Fund the administrative operations of the MHIC

Answer

Pay subcontractors when general contractors become insolvent

Question 3

Maryland law requires a home improvement contract to be in writing when the contract price exceeds:

Accepted Answer

$500

Answer

$100

Answer

$2,500

Answer

$5,000

Question 4

A homeowner who signs a home improvement contract at their residence during a door-to-door solicitation has the right to cancel within:

Accepted Answer

3 business days

Answer

24 hours

Answer

5 business days

Answer

7 calendar days

Question 5

What minimum general liability insurance must a Maryland MHIC-licensed contractor maintain per occurrence?

Accepted Answer

$50,000

Answer

$25,000

Answer

$100,000

Answer

$250,000

Question 6

Under Maryland's mechanics lien law, within how many days after the last work performed must a contractor file a petition for a mechanics lien?

Accepted Answer

90 days

Answer

30 days

Answer

60 days

Answer

180 days

Question 7

Which of the following payment practices is prohibited under Maryland Home Improvement Law?

Accepted Answer

Collecting the full contract amount from the homeowner before any work begins

Answer

Requesting a draw payment after a defined phase of work is completed

Answer

Accepting payment by personal check or electronic transfer

Answer

Requiring a signed change order before performing additional work