MARYLAND HOME IMPROVEMENT UPDATED EXAM
SCRIPT QUESTIONS AND ANSWERS MARKED A+
✔✔Can two or more individuals (such as homeowner and contractor) lawfully agree to
ignore the Home Improvement licensing requirement? - ✔✔No, waiver is prohibited
✔✔When was the commission established? - ✔✔1962
✔✔How Many commissioners are there? - ✔✔9 (4 must have experience in the
business of home improvement; 4 are members of the general public that represent
cosumers; and 1 must have experience in banking and finance)
✔✔What is the most important role of the Commissioners? - ✔✔To promulgate
regulations for the Commission. These regulations help the public better understand the
Home Improvement Law and the Commission's policies
✔✔How often are the meetings? - ✔✔bi-monthly. Meetings are open to the public.
✔✔What is the requirement for Commissioners? - ✔✔Must be a resident of MD for at
least 5 years
✔✔How long if the Commissioner's term? - ✔✔4 years
✔✔Where is the Commission's office? - ✔✔Baltimore, MD
✔✔Who appoints the Executive Director? - ✔✔The Secretary of Department of Labor,
Licensing and Regulation
✔✔What is the Executive Director responsible for? - ✔✔the daily operations of the
Commission and signs under the seal letters affirming the licensing status of individuals
for court proceedings. The Executive director is also responsible for compiling and
maintaining a copy of the Commission's current regulations
✔✔What do investigators do? - ✔✔The Commission also employs investigators that
review the complaints and Guaranty Fund claims that are received by the Commission.
The investigators review complaints against licensed and unlicensed contractors and
salespersons.
✔✔If an investigator determines that a violation may have occurred, what actions can
the Commission take? - ✔✔The Commission may take disciplinary action which may
include reprimand, monetary fine or suspension or revocation of the license.
✔✔True or False: An individual who holds a home improvement license as a contractor
is NOT required to obtain a construction license from the Circuit Courts - ✔✔True
,✔✔How long are exams valid for? - ✔✔2 years
✔✔If a candidate fails the exam, how long must he/she wait before retaking it? - ✔✔30
days the first time. After each subsequent failure a candidate must wait 60 days.
✔✔What is the insurance requirement for contractor? - ✔✔General Liability at least
$50,000
✔✔What is the Home Improvement Guaranty Fund? - ✔✔One of the Commissions
most important function is to administer the Home Improvement Guaranty Fund. The
fund compensates homeowners for the actual loss caused by the acts or omissions of a
licensed contractor.
✔✔True or False: Is a homeowner hires an unlicensed contractor he/she is eligible to
collect money from the fund? - ✔✔FALSE - if a homeowner hires an unlicensed
contractor, the homeowner will NOT be eligible to collect money from the Fund.
✔✔What is Actual Loss? - ✔✔Actual Loss means the cost to correct or complete a
home improvement that is inadequate, unworkmanlike or incomplete.
✔✔How much can homeowners recover? - ✔✔Homeowners may recover up to $20,000
per contract, though they are not eligible to recover more than the amount paid to the
contractor against whom the claim is based. Certain costs like: legal fees, interest,
consequential damages are not covered by the Fund.
✔✔What is the max amount that can be awarded from the Guaranty Fund for the acts
or omissions of a contractor? - ✔✔$100,000
✔✔How is the Fund maintained? - ✔✔$100 by each contractor at the time of applying
for a license. The Commission may also assess each contractor a fee of $50 if the Fund
falls below $250,000
✔✔How many days does the contractor have to respond to claims from a homeowner
once it has been received by the commission? - ✔✔Once the Commission receives a
claim, it send a copy to the contractor who has 10 days to respond back to the
Commission.
✔✔Who is not eligible to collect from the Fund? - ✔✔Spouse, relative, or employee of
the contractor, or an officer of the corporation. Similarly, an owner may only receive
compensation if she/he resides in the house where the work was performed or does not
own more than 3 residences.
, ✔✔What happens to the license of the contractor after a claim has been paid? - ✔✔The
licensed is suspended, unless the commission determines that contractor did not know
the wrongful conduct or it could had not been avoided
✔✔What is required in a home Improvement contract? - ✔✔Date
Contractors name, address, and MHIC number
Consumer Notice
Dates
Description of work
Deposit and Payment information
✔✔What is Consumer Notice? - ✔✔It provides phone of the Commission and states
that "each contractor and subcontractor must hold a current MHIC license and anyone
can ask MHIC about a contractor"
The contract also needs to inform homeowners of the following:
1) Formal mediation disputes between homeowners and contractors are available
through the Commission
2) The Commission administers the Fund which can compensate owners for certain
actual losses caused by acts or omissions of licensed contractors
3) The homeowner may request that the contractor purchase a performance bond for
additional protections against losses not covered by the Fund
✔✔What is the maximum a contractor may ask for downpayment? - ✔✔1/3 of the
contract
✔✔How long does a homeowner have to rescind a contract? - ✔✔3 days after signing,
and notification must be in writing.
✔✔Who can make changes to a home improvement contract? - ✔✔Only the contractor
is authorized to make changes for a homeowner. The commission recommends
changes to be in writing.
✔✔True or False: Before the performance of a home improvement coontract, the owner
shall be given a copy of the home improvement contract signed by the contractor -
✔✔TRUE
✔✔What is cancellation under Door to Door Sales Act - ✔✔The Door to Door sales act
gives consumers certain rights, including the right to cancel the contract without any
penalty or obligation, by sending a notice of cancellation to the seller by midnight of the
fifth business day following the sale, or the seventh business day of the buyer is at least
65 years old.
If the homeowner cancels the contract, contractor must return the deposit within 10
business days following receipt of cancellation.
SCRIPT QUESTIONS AND ANSWERS MARKED A+
✔✔Can two or more individuals (such as homeowner and contractor) lawfully agree to
ignore the Home Improvement licensing requirement? - ✔✔No, waiver is prohibited
✔✔When was the commission established? - ✔✔1962
✔✔How Many commissioners are there? - ✔✔9 (4 must have experience in the
business of home improvement; 4 are members of the general public that represent
cosumers; and 1 must have experience in banking and finance)
✔✔What is the most important role of the Commissioners? - ✔✔To promulgate
regulations for the Commission. These regulations help the public better understand the
Home Improvement Law and the Commission's policies
✔✔How often are the meetings? - ✔✔bi-monthly. Meetings are open to the public.
✔✔What is the requirement for Commissioners? - ✔✔Must be a resident of MD for at
least 5 years
✔✔How long if the Commissioner's term? - ✔✔4 years
✔✔Where is the Commission's office? - ✔✔Baltimore, MD
✔✔Who appoints the Executive Director? - ✔✔The Secretary of Department of Labor,
Licensing and Regulation
✔✔What is the Executive Director responsible for? - ✔✔the daily operations of the
Commission and signs under the seal letters affirming the licensing status of individuals
for court proceedings. The Executive director is also responsible for compiling and
maintaining a copy of the Commission's current regulations
✔✔What do investigators do? - ✔✔The Commission also employs investigators that
review the complaints and Guaranty Fund claims that are received by the Commission.
The investigators review complaints against licensed and unlicensed contractors and
salespersons.
✔✔If an investigator determines that a violation may have occurred, what actions can
the Commission take? - ✔✔The Commission may take disciplinary action which may
include reprimand, monetary fine or suspension or revocation of the license.
✔✔True or False: An individual who holds a home improvement license as a contractor
is NOT required to obtain a construction license from the Circuit Courts - ✔✔True
,✔✔How long are exams valid for? - ✔✔2 years
✔✔If a candidate fails the exam, how long must he/she wait before retaking it? - ✔✔30
days the first time. After each subsequent failure a candidate must wait 60 days.
✔✔What is the insurance requirement for contractor? - ✔✔General Liability at least
$50,000
✔✔What is the Home Improvement Guaranty Fund? - ✔✔One of the Commissions
most important function is to administer the Home Improvement Guaranty Fund. The
fund compensates homeowners for the actual loss caused by the acts or omissions of a
licensed contractor.
✔✔True or False: Is a homeowner hires an unlicensed contractor he/she is eligible to
collect money from the fund? - ✔✔FALSE - if a homeowner hires an unlicensed
contractor, the homeowner will NOT be eligible to collect money from the Fund.
✔✔What is Actual Loss? - ✔✔Actual Loss means the cost to correct or complete a
home improvement that is inadequate, unworkmanlike or incomplete.
✔✔How much can homeowners recover? - ✔✔Homeowners may recover up to $20,000
per contract, though they are not eligible to recover more than the amount paid to the
contractor against whom the claim is based. Certain costs like: legal fees, interest,
consequential damages are not covered by the Fund.
✔✔What is the max amount that can be awarded from the Guaranty Fund for the acts
or omissions of a contractor? - ✔✔$100,000
✔✔How is the Fund maintained? - ✔✔$100 by each contractor at the time of applying
for a license. The Commission may also assess each contractor a fee of $50 if the Fund
falls below $250,000
✔✔How many days does the contractor have to respond to claims from a homeowner
once it has been received by the commission? - ✔✔Once the Commission receives a
claim, it send a copy to the contractor who has 10 days to respond back to the
Commission.
✔✔Who is not eligible to collect from the Fund? - ✔✔Spouse, relative, or employee of
the contractor, or an officer of the corporation. Similarly, an owner may only receive
compensation if she/he resides in the house where the work was performed or does not
own more than 3 residences.
, ✔✔What happens to the license of the contractor after a claim has been paid? - ✔✔The
licensed is suspended, unless the commission determines that contractor did not know
the wrongful conduct or it could had not been avoided
✔✔What is required in a home Improvement contract? - ✔✔Date
Contractors name, address, and MHIC number
Consumer Notice
Dates
Description of work
Deposit and Payment information
✔✔What is Consumer Notice? - ✔✔It provides phone of the Commission and states
that "each contractor and subcontractor must hold a current MHIC license and anyone
can ask MHIC about a contractor"
The contract also needs to inform homeowners of the following:
1) Formal mediation disputes between homeowners and contractors are available
through the Commission
2) The Commission administers the Fund which can compensate owners for certain
actual losses caused by acts or omissions of licensed contractors
3) The homeowner may request that the contractor purchase a performance bond for
additional protections against losses not covered by the Fund
✔✔What is the maximum a contractor may ask for downpayment? - ✔✔1/3 of the
contract
✔✔How long does a homeowner have to rescind a contract? - ✔✔3 days after signing,
and notification must be in writing.
✔✔Who can make changes to a home improvement contract? - ✔✔Only the contractor
is authorized to make changes for a homeowner. The commission recommends
changes to be in writing.
✔✔True or False: Before the performance of a home improvement coontract, the owner
shall be given a copy of the home improvement contract signed by the contractor -
✔✔TRUE
✔✔What is cancellation under Door to Door Sales Act - ✔✔The Door to Door sales act
gives consumers certain rights, including the right to cancel the contract without any
penalty or obligation, by sending a notice of cancellation to the seller by midnight of the
fifth business day following the sale, or the seventh business day of the buyer is at least
65 years old.
If the homeowner cancels the contract, contractor must return the deposit within 10
business days following receipt of cancellation.
