PSI EXAMINATION PREPARATION SERIES | 2026/2027 EDITION
Maryland Home Improvement Commission
(MHIC)
PSI Exam Prep
Practice Questions and Study Guide
100 6 A-D 100%
Practice Questions Content Sections Answer Format Full Rationales
Aligned with the PSI examination blueprint and the MHIC content outline. Cognitive mix: 35% recall, 45% application, 20%
analysis. Question style: 70% scenario-based, 30% direct recall and statutory identification. Each question shows the keyed
answer, a bold [CORRECT] marker, and a study-guide rationale with Maryland statutory citations.
SECTION 1 | MHIC Law and Regulations
Maryland Business Regulation Article, Title 8 | Commission Authority | Questions 1-20
Q1: The Maryland Home Improvement Commission (MHIC) derives its licensing and
regulatory authority from which body of Maryland law?
A. The Maryland Consumer Protection Act, Commercial Law Article, Title 13
B. The Maryland Business Regulation Article, Title 8, Annotated Code of Maryland
[CORRECT]
C. The Maryland Real Property Article, Title 9, Annotated Code of Maryland
D. The Maryland Human Services Article, Title 8, Annotated Code of Maryland
Correct Answer: B
Rationale: The Home Improvement Law is codified at Business Regulation Article, Title 8 of the
Annotated Code of Maryland, which creates the Commission, defines 'home improvement,' and
governs licensing, contracts, the Guaranty Fund, and enforcement. The Consumer Protection Act
(Commercial Law Title 13) supplies a general backdrop against deceptive trade practices but does not
create the MHIC, and Real Property Title 9 governs mechanic's liens. Options A, C, and D describe
related but distinct bodies of law.
Q2: Under Business Regulation Section 8-101, 'home improvement' is best defined as:
A. Any construction work performed anywhere in Maryland with a value above $1,000
B. Only the construction of new single-family homes from the foundation up
C. The addition to or alteration, repair, replacement, remodeling, modernization,
improvement, or conversion of a private residence or its appurtenances [CORRECT]
D. Commercial remodeling contracts with a value above $25,000
Correct Answer: C
1
,MHIC PSI Exam Prep | Practice Questions and Study Guide
Rationale: Section 8-101 defines home improvement as the addition to or alteration of a private
residence or building appurtenant to it, expressly covering construction, alteration, repair,
replacement, and remodeling, plus related conversions and modernization. New construction (Option
B) is expressly excluded by Section 8-102, and commercial work (Option D) falls outside the statute
entirely because the definition is tied to private residences. Option A invents a value threshold that
appears nowhere in the statute.
Q3: A homeowner hires a contractor to build a new detached garage and repave the existing
driveway at the homeowner's residence in Baltimore County. Under MHIC law, this project is:
A. New home construction, and therefore excluded from the definition of home
improvement
B. Commercial construction requiring a different state license
C. Exempt because garages and driveways are personal property
D. Home improvement, because garages, driveways, and similar structures are expressly
included as appurtenances of a private residence [CORRECT]
Correct Answer: D
Rationale: Section 8-101 expressly lists garages, driveways, fences, patios, porches, sidewalks,
swimming pools, storm windows and doors, basements, landscaping, lawns, and waterproofing among
covered appurtenances of a private residence. The new-construction exclusion in Section 8-102
applies to erecting a new dwelling or building from the ground up, not to accessory structures on an
existing residence. Options A and C misapply the exclusions.
Q4: Which of the following projects is NOT considered home improvement under Business
Regulation Section 8-102?
A. Installing an in-ground swimming pool at a residence
B. Repairing a freestanding refrigerator inside a private residence [CORRECT]
C. Waterproofing a residential basement
D. Replacing residential storm windows and doors
Correct Answer: B
Rationale: Section 8-102 expressly excludes the repair or replacement of appliances such as stoves,
refrigerators, washing machines, and dryers, because appliance service is not construction or
remodeling of the dwelling itself. Swimming pools, waterproofing, and storm windows and doors are
each expressly listed as included work within Section 8-101. This exclusion is a classic PSI exam trap
because the work occurs at a residence but involves an appliance rather than the structure.
2
,MHIC PSI Exam Prep | Practice Questions and Study Guide
Q5: A contractor signs a contract to repaint the entire interior of a home as part of a larger
project that also remodels two bathrooms. Under MHIC law, is the painting portion a home
improvement?
A. No, painting is always excluded from home improvement
B. Yes, but only if the painting costs more than $5,000
C. Yes, because painting is excluded only when performed alone and not as part of a home
improvement contract [CORRECT]
D. No, because interior work never qualifies as home improvement
Correct Answer: C
Rationale: Section 8-102 excludes painting or decorating a structure only when it is not part of a
home improvement contract; when painting is bundled with remodeling work, the painting becomes
part of a home improvement contract subject to MHIC jurisdiction. Option A states the exclusion too
broadly, which is the most common distractor on the exam. No dollar threshold (Option B) affects the
analysis.
Q6: A business owner contracts for a full renovation of an office suite on the third floor of a
commercial building in Columbia. Which statement is correct?
A. An MHIC license is not implicated because home improvement is limited to private
residences, including condominium units [CORRECT]
B. An MHIC license is required because all contracting work in Maryland requires one
C. An MHIC license is required only if the renovation exceeds $50,000
D. An MHIC license is required whenever the building contains even one residential unit
Correct Answer: A
Rationale: The statutory definition of home improvement in Section 8-101 is tied to buildings used
as private residences, including condominium and apartment units; commercial office space is outside
the Commission's jurisdiction altogether. Option B is wrong because Maryland licenses many trades
separately and does not require an MHIC license for commercial work. Options C and D import
thresholds and conditions that do not exist in the statute.
Q7: How is the Maryland Home Improvement Commission composed?
A. Five members elected by licensed contractors statewide
B. Seven members appointed by the Governor with the advice and consent of the Senate
[CORRECT]
C. Nine members appointed directly by the General Assembly
D. Three members appointed by the Secretary of the Department of Labor
Correct Answer: B
Rationale: Under Business Regulation Section 8-201, the Commission consists of seven members
appointed by the Governor with the advice and consent of the Senate, including licensed home
improvement contractors, consumer members, and a member of the public. Options A and C describe
selection methods that contradict the Governor-appointment structure, and Option D understates the
size of the body. Knowing the seven-member structure is a frequently tested recall item.
3
, MHIC PSI Exam Prep | Practice Questions and Study Guide
Q8: A developer builds a brand-new house on a formerly vacant lot for sale to the public. Is an
MHIC contractor license required for this construction?
A. Yes, because the construction of any house is home improvement
B. Yes, but only for speculative homes built without a buyer under contract
C. Yes, if the buyer's financing is federally insured
D. No, because the construction of a new home or building is expressly excluded from the
definition of home improvement [CORRECT]
Correct Answer: D
Rationale: Section 8-102 excludes the construction of a new home or building from the definition of
home improvement, which is why production and custom home builders fall under separate
regulatory regimes rather than MHIC. The exclusion applies regardless of whether the home is built
on speculation or under contract (Options B and C). Remodeling an existing dwelling, by contrast,
squarely remains within MHIC jurisdiction.
Q9: A licensed general contractor subcontracts the electrical rough-in for a residential kitchen
remodel to an unaffiliated electrical firm that will perform the work as an independent
business. What does MHIC law require of the subcontractor?
A. The subcontractor may rely on the general contractor's MHIC license for all work
performed
B. The subcontractor needs no license because subcontractors are never regulated
C. The subcontractor must register as a salesperson before performing any work
D. The subcontractor must hold its own MHIC contractor license or be an employee of the
licensed contractor performing the home improvement [CORRECT]
Correct Answer: D
Rationale: Business Regulation Section 8-301 makes it unlawful to provide or perform home
improvement services without a license, and each person or firm performing home improvement
must either hold its own license or qualify as an employee of a licensed contractor. The general
contractor's license does not 'cover' independent subcontractors (Option A), and salesperson
registration (Option C) is limited to persons who solicit or negotiate contracts. This
licensing-versus-registration distinction is a core PSI testing point.
Q10: A carpenter is a full-time W-2 employee of a licensed remodeling company and installs
customer decks exclusively within the scope of that employment. Does the carpenter need an
individual MHIC license?
A. Yes, and the carpenter must obtain one within 90 days of hire
B. Yes, unless the carpenter also registers as a salesperson
C. No, employees of a licensed home improvement contractor acting within the scope of
their employment are exempt from individual licensure [CORRECT]
D. No, because carpentry is a trade exempt from all Maryland licensing
Correct Answer: C
Rationale: The exemption structure of the Home Improvement Law allows a licensed contractor's
employees to perform home improvement work within the scope of employment without individual
4
Maryland Home Improvement Commission
(MHIC)
PSI Exam Prep
Practice Questions and Study Guide
100 6 A-D 100%
Practice Questions Content Sections Answer Format Full Rationales
Aligned with the PSI examination blueprint and the MHIC content outline. Cognitive mix: 35% recall, 45% application, 20%
analysis. Question style: 70% scenario-based, 30% direct recall and statutory identification. Each question shows the keyed
answer, a bold [CORRECT] marker, and a study-guide rationale with Maryland statutory citations.
SECTION 1 | MHIC Law and Regulations
Maryland Business Regulation Article, Title 8 | Commission Authority | Questions 1-20
Q1: The Maryland Home Improvement Commission (MHIC) derives its licensing and
regulatory authority from which body of Maryland law?
A. The Maryland Consumer Protection Act, Commercial Law Article, Title 13
B. The Maryland Business Regulation Article, Title 8, Annotated Code of Maryland
[CORRECT]
C. The Maryland Real Property Article, Title 9, Annotated Code of Maryland
D. The Maryland Human Services Article, Title 8, Annotated Code of Maryland
Correct Answer: B
Rationale: The Home Improvement Law is codified at Business Regulation Article, Title 8 of the
Annotated Code of Maryland, which creates the Commission, defines 'home improvement,' and
governs licensing, contracts, the Guaranty Fund, and enforcement. The Consumer Protection Act
(Commercial Law Title 13) supplies a general backdrop against deceptive trade practices but does not
create the MHIC, and Real Property Title 9 governs mechanic's liens. Options A, C, and D describe
related but distinct bodies of law.
Q2: Under Business Regulation Section 8-101, 'home improvement' is best defined as:
A. Any construction work performed anywhere in Maryland with a value above $1,000
B. Only the construction of new single-family homes from the foundation up
C. The addition to or alteration, repair, replacement, remodeling, modernization,
improvement, or conversion of a private residence or its appurtenances [CORRECT]
D. Commercial remodeling contracts with a value above $25,000
Correct Answer: C
1
,MHIC PSI Exam Prep | Practice Questions and Study Guide
Rationale: Section 8-101 defines home improvement as the addition to or alteration of a private
residence or building appurtenant to it, expressly covering construction, alteration, repair,
replacement, and remodeling, plus related conversions and modernization. New construction (Option
B) is expressly excluded by Section 8-102, and commercial work (Option D) falls outside the statute
entirely because the definition is tied to private residences. Option A invents a value threshold that
appears nowhere in the statute.
Q3: A homeowner hires a contractor to build a new detached garage and repave the existing
driveway at the homeowner's residence in Baltimore County. Under MHIC law, this project is:
A. New home construction, and therefore excluded from the definition of home
improvement
B. Commercial construction requiring a different state license
C. Exempt because garages and driveways are personal property
D. Home improvement, because garages, driveways, and similar structures are expressly
included as appurtenances of a private residence [CORRECT]
Correct Answer: D
Rationale: Section 8-101 expressly lists garages, driveways, fences, patios, porches, sidewalks,
swimming pools, storm windows and doors, basements, landscaping, lawns, and waterproofing among
covered appurtenances of a private residence. The new-construction exclusion in Section 8-102
applies to erecting a new dwelling or building from the ground up, not to accessory structures on an
existing residence. Options A and C misapply the exclusions.
Q4: Which of the following projects is NOT considered home improvement under Business
Regulation Section 8-102?
A. Installing an in-ground swimming pool at a residence
B. Repairing a freestanding refrigerator inside a private residence [CORRECT]
C. Waterproofing a residential basement
D. Replacing residential storm windows and doors
Correct Answer: B
Rationale: Section 8-102 expressly excludes the repair or replacement of appliances such as stoves,
refrigerators, washing machines, and dryers, because appliance service is not construction or
remodeling of the dwelling itself. Swimming pools, waterproofing, and storm windows and doors are
each expressly listed as included work within Section 8-101. This exclusion is a classic PSI exam trap
because the work occurs at a residence but involves an appliance rather than the structure.
2
,MHIC PSI Exam Prep | Practice Questions and Study Guide
Q5: A contractor signs a contract to repaint the entire interior of a home as part of a larger
project that also remodels two bathrooms. Under MHIC law, is the painting portion a home
improvement?
A. No, painting is always excluded from home improvement
B. Yes, but only if the painting costs more than $5,000
C. Yes, because painting is excluded only when performed alone and not as part of a home
improvement contract [CORRECT]
D. No, because interior work never qualifies as home improvement
Correct Answer: C
Rationale: Section 8-102 excludes painting or decorating a structure only when it is not part of a
home improvement contract; when painting is bundled with remodeling work, the painting becomes
part of a home improvement contract subject to MHIC jurisdiction. Option A states the exclusion too
broadly, which is the most common distractor on the exam. No dollar threshold (Option B) affects the
analysis.
Q6: A business owner contracts for a full renovation of an office suite on the third floor of a
commercial building in Columbia. Which statement is correct?
A. An MHIC license is not implicated because home improvement is limited to private
residences, including condominium units [CORRECT]
B. An MHIC license is required because all contracting work in Maryland requires one
C. An MHIC license is required only if the renovation exceeds $50,000
D. An MHIC license is required whenever the building contains even one residential unit
Correct Answer: A
Rationale: The statutory definition of home improvement in Section 8-101 is tied to buildings used
as private residences, including condominium and apartment units; commercial office space is outside
the Commission's jurisdiction altogether. Option B is wrong because Maryland licenses many trades
separately and does not require an MHIC license for commercial work. Options C and D import
thresholds and conditions that do not exist in the statute.
Q7: How is the Maryland Home Improvement Commission composed?
A. Five members elected by licensed contractors statewide
B. Seven members appointed by the Governor with the advice and consent of the Senate
[CORRECT]
C. Nine members appointed directly by the General Assembly
D. Three members appointed by the Secretary of the Department of Labor
Correct Answer: B
Rationale: Under Business Regulation Section 8-201, the Commission consists of seven members
appointed by the Governor with the advice and consent of the Senate, including licensed home
improvement contractors, consumer members, and a member of the public. Options A and C describe
selection methods that contradict the Governor-appointment structure, and Option D understates the
size of the body. Knowing the seven-member structure is a frequently tested recall item.
3
, MHIC PSI Exam Prep | Practice Questions and Study Guide
Q8: A developer builds a brand-new house on a formerly vacant lot for sale to the public. Is an
MHIC contractor license required for this construction?
A. Yes, because the construction of any house is home improvement
B. Yes, but only for speculative homes built without a buyer under contract
C. Yes, if the buyer's financing is federally insured
D. No, because the construction of a new home or building is expressly excluded from the
definition of home improvement [CORRECT]
Correct Answer: D
Rationale: Section 8-102 excludes the construction of a new home or building from the definition of
home improvement, which is why production and custom home builders fall under separate
regulatory regimes rather than MHIC. The exclusion applies regardless of whether the home is built
on speculation or under contract (Options B and C). Remodeling an existing dwelling, by contrast,
squarely remains within MHIC jurisdiction.
Q9: A licensed general contractor subcontracts the electrical rough-in for a residential kitchen
remodel to an unaffiliated electrical firm that will perform the work as an independent
business. What does MHIC law require of the subcontractor?
A. The subcontractor may rely on the general contractor's MHIC license for all work
performed
B. The subcontractor needs no license because subcontractors are never regulated
C. The subcontractor must register as a salesperson before performing any work
D. The subcontractor must hold its own MHIC contractor license or be an employee of the
licensed contractor performing the home improvement [CORRECT]
Correct Answer: D
Rationale: Business Regulation Section 8-301 makes it unlawful to provide or perform home
improvement services without a license, and each person or firm performing home improvement
must either hold its own license or qualify as an employee of a licensed contractor. The general
contractor's license does not 'cover' independent subcontractors (Option A), and salesperson
registration (Option C) is limited to persons who solicit or negotiate contracts. This
licensing-versus-registration distinction is a core PSI testing point.
Q10: A carpenter is a full-time W-2 employee of a licensed remodeling company and installs
customer decks exclusively within the scope of that employment. Does the carpenter need an
individual MHIC license?
A. Yes, and the carpenter must obtain one within 90 days of hire
B. Yes, unless the carpenter also registers as a salesperson
C. No, employees of a licensed home improvement contractor acting within the scope of
their employment are exempt from individual licensure [CORRECT]
D. No, because carpentry is a trade exempt from all Maryland licensing
Correct Answer: C
Rationale: The exemption structure of the Home Improvement Law allows a licensed contractor's
employees to perform home improvement work within the scope of employment without individual
4
