MHIC Financial Management and Consumer Protection 5

Question 1

A Maryland homeowner signed a home improvement contract on a Tuesday at their residence. By when must they exercise their right to cancel?

Accepted Answer

Within 3 business days of signing

Answer

Maryland's Home Improvement Law grants homeowners a 3-business-day right of rescission for contracts signed at their residence.

Question 2

Which of the following must be included in a Maryland home improvement contract to protect both parties financially?

Accepted Answer

A clear payment schedule tied to project milestones

Answer

A milestone-based payment schedule ensures money is released as work progresses, protecting consumers from prepaying and contractors from non-payment.

Question 3

What happens to a Maryland home improvement contractor's license if they are found guilty of collecting money and abandoning a project?

Accepted Answer

Their license may be suspended or revoked and they may face criminal charges

Answer

Collecting money and abandoning a project is a serious violation that can result in license suspension or revocation and potential criminal prosecution under Maryland law.

Question 4

A contractor finishes a job and the homeowner disputes the final payment amount. Under MHIC, what is the preferred first step for resolution?

Accepted Answer

Attempt mediation or negotiation using the written contract terms

Answer

MHIC encourages parties to resolve disputes through the written contract terms and mediation before pursuing legal remedies.

Question 5

Which scenario correctly describes a contractor's obligation under Maryland's mechanics lien law as it relates to consumer protection?

Accepted Answer

Subcontractors and suppliers can lien a homeowner's property if the general contractor fails to pay them

Answer

Unpaid subcontractors and suppliers may file a mechanics lien against the homeowner's property even if the homeowner paid the general contractor in full.

(MHIC) Maryland Home Improvement Contractor Practice Test

(MHIC) Maryland Home Improvement Contractor Practice Test

MHIC Financial Management and Consumer Protection 5