MHIC MD Home Improvement Law 5 — Questions and Answers
Question 1: A homeowner asks a contractor to start work immediately and skip the written contract. Under Maryland law, the contractor should:
- Begin work since the homeowner waived the contract in writing
- Begin work only if the job is under $1,000
- Refuse to begin without a written contract if the job exceeds $250 (Correct answer)
- Proceed and provide a receipt within 10 days
Correct answer: Refuse to begin without a written contract if the job exceeds $250
Maryland law requires a written contract for jobs over $250, and the contractor cannot legally waive this requirement even at the homeowner's request.
Question 2: Under Maryland's Home Improvement Law, what information is NOT required to appear in a home improvement contract?
- Contractor's MHIC license number
- Estimated start and completion dates
- Contractor's Social Security Number (Correct answer)
- Description of the work to be performed
Correct answer: Contractor's Social Security Number
A contractor's Social Security Number is not required in a Maryland home improvement contract; the MHIC license number is required instead.
Question 3: A subcontractor performs electrical work on a home improvement project in Maryland without being licensed. Who bears primary legal responsibility?
- The homeowner
- Only the subcontractor
- The general contractor who hired the subcontractor (Correct answer)
- The local building department
Correct answer: The general contractor who hired the subcontractor
The licensed general contractor is responsible for ensuring all subcontractors comply with Maryland licensing requirements.
Question 4: The Maryland Home Improvement Guaranty Fund is funded primarily by:
- State general tax revenues
- Fees paid by licensed contractors (Correct answer)
- Fines collected from homeowners
- Federal housing grants
Correct answer: Fees paid by licensed contractors
The Guaranty Fund is financed through fees assessed on Maryland-licensed home improvement contractors.
Question 5: A contractor's MHIC license has lapsed for 6 months. To reinstate it, the contractor must:
- Simply pay the renewal fee with no penalty
- Retake the full MHIC examination
- Apply for reinstatement, pay fees, and may face penalties for unlicensed work during the lapse (Correct answer)
- Wait one full year before reapplying
Correct answer: Apply for reinstatement, pay fees, and may face penalties for unlicensed work during the lapse
Reinstating a lapsed MHIC license requires a new application, payment of fees, and any unlicensed work performed during the lapse may result in additional penalties.
Question 6: Under Maryland law, which of the following constitutes an unfair or deceptive trade practice by a home improvement contractor?
- Charging a price higher than the initial estimate after discovering unforeseen conditions
- Requiring a down payment before starting work
- Misrepresenting the contractor's qualifications or license status to a homeowner (Correct answer)
- Subcontracting specialty work to a licensed specialist
Correct answer: Misrepresenting the contractor's qualifications or license status to a homeowner
Misrepresenting qualifications or license status is classified as an unfair or deceptive trade practice under Maryland's Consumer Protection Act and Home Improvement Law.
Question 7: A Maryland home improvement contract is signed on a Monday at the homeowner's residence. The homeowner has the right to cancel without penalty until:
- Midnight of the same day
- Midnight of the third business day after signing (Correct answer)
- 5 business days after signing
- The contractor purchases materials
Correct answer: Midnight of the third business day after signing
Under Maryland's Home Solicitation Sales Act, homeowners have three business days to cancel a contract signed at their home without penalty.
MHIC MD Home Improvement Law 5
A homeowner asks a contractor to start work immediately and skip the written contract.
Under Maryland law, the contractor should: