ARYLAND HOME
M
IMPROVEMENT PRACTICE
TEST .PSI Exam | Complete
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xam Overview:
E
This practice test covers all six domains of the Maryland Home Improvement Contractor
Examination administered by PSI, aligned with the Maryland Home Improvement Commission
(MHIC) standards and Maryland Business Regulation Article, Title 8.
[DOMAIN 1: MARYLAND HOME IMPROVEMENT LAW & REGULATIONS - 38 Questions]
Question 1
The Maryland Home Improvement Commission (MHIC) operates under which state
department?
A) Maryland Department of Commerce
B) Maryland Department of Labor
C) Maryland Department of Housing and Community Development
D) Maryland Department of Business and Economic Development
Correct Answer: B) Maryland Department of Labor [CORRECT]
Rationale: The MHIC is a unit within the Maryland Department of Labor, not an independent
agency or part of other departments. This organizational structure places contractor licensing
under the state's labor regulatory framework.
Question 2
How many members serve on the Maryland Home Improvement Commission, and who
appoints them?
A) 7 members appointed by the General Assembly
B) 9 members appointed by the Governor
C) 11 members appointed by the Secretary of Labor
D) 5 members elected by licensed contractors
Correct Answer: B) 9 members appointed by the Governor [CORRECT]
Rationale: Per Maryland Business Regulation Article, Title 8, the Commission consists of 9
members appointed by the Governor with the advice and consent of the Senate. This structure
ensures gubernatorial oversight of the licensing body.
Question 3
What is the primary legal authority that the MHIC enforces?
, ) Maryland Business Regulation Article, Title 7
A
B) Maryland Business Regulation Article, Title 8
C) Maryland Real Property Article, Title 10
D) Maryland Commercial Law Article, Title 12
Correct Answer: B) Maryland Business Regulation Article, Title 8 [CORRECT]
Rationale: The Maryland Home Improvement Law is codified in Business Regulation Article,
Title 8 of the Maryland Annotated Code. This statute establishes all licensing requirements,
prohibited acts, and enforcement mechanisms.
Question 4
Which of the following best describes the primary responsibility of the MHIC?
A) Collecting sales tax on home improvement materials
B) Licensing and regulating home improvement contractors
C) Issuing building permits for residential construction
D) Inspecting completed home improvement projects
Correct Answer: B) Licensing and regulating home improvement contractors [CORRECT]
Rationale: The MHIC's core mission is licensing and regulation. Building permits are issued by
local jurisdictions, sales tax is collected by the Comptroller, and inspections are performed by
local building officials—not the MHIC.
Question 5
A contractor must obtain an MHIC license before performing which of the following actions?
A) Purchasing materials from a supplier
B) Advertising or performing home improvement work
C) Hiring subcontractors for future projects
D) Renting construction equipment
Correct Answer: B) Advertising or performing home improvement work [CORRECT]
Rationale: Maryland law prohibits unlicensed contractors from advertising or performing home
improvement work. The license must be obtained BEFORE any solicitation or work begins,
making this a strict liability requirement.
Question 6
What is the maximum contract amount for a Class B MHIC license?
A) $2,500 per contract
B) $5,000 per contract
C) $10,000 per contract
D) $25,000 per contract
Correct Answer: C) $10,000 per contract [CORRECT]
Rationale: Class B licenses authorize contracts up to $10,000 per contract. Class C is limited to
$2,500, while Class A has no monetary limit. These thresholds determine the scope of work a
contractor may legally undertake.
Question 7
What is the contract limit for a Class C MHIC license?
A) $1,000 per contract
B) $2,500 per contract
C) $5,000 per contract
D) $7,500 per contract
, orrect Answer: B) $2,500 per contract [CORRECT]
C
Rationale: Class C licenses are designed for small-scale contractors with a maximum contract
limit of $2,500. This classification allows entry-level contractors to operate with reduced bonding
and insurance requirements.
Question 8
Which class of MHIC license has no monetary limit on contract amounts?
A) Class A
B) Class B
C) Class C
D) Class D
Correct Answer: A) Class A [CORRECT]
Rationale: Class A licenses are unlimited in contract amount, suitable for major renovation
contractors. Class B ($10,000 limit) and Class C ($2,500 limit) have strict monetary caps. There
is no Class D license classification.
Question 9
Who must pass the MHIC examination to qualify for a contractor license?
A) All employees of the contracting company
B) The qualifying individual listed on the license application
C) Every subcontractor working for the contractor
D) The homeowner for verification purposes
Correct Answer: B) The qualifying individual listed on the license application [CORRECT]
Rationale: Only the "qualifying individual"—the person designated as responsible for the
company's compliance—must pass the exam. This person serves as the licensed
representative, not every employee or subcontractor.
Question 10
How frequently must an MHIC license be renewed?
A) Annually
B) Every two years
C) Every three years
D) Every five years
Correct Answer: B) Every two years [CORRECT]
Rationale: MHIC licenses expire biennially (every two years). Licensees must submit renewal
applications, pay fees, and maintain insurance requirements to continue operating legally.
Question 11
Which of the following activities is EXEMPT from MHIC licensing requirements?
A) Remodeling a client's kitchen for $15,000
B) Performing handyman work under $500 without advertising as home improvement
C) Installing a new roof on a residential property
D) Building a deck for a homeowner
Correct Answer: B) Performing handyman work under $500 without advertising as home
improvement [CORRECT]
Rationale: The "handyman exemption" allows work under $500 provided the person does not
advertise as a home improvement contractor. This exemption protects casual, small-scale repair
work from burdensome licensing requirements.
, uestion 12
Q
A contractor performs work on their own primary residence. Is an MHIC license required?
A) Yes, all residential work requires a license
B) No, work on contractor's own residence is exempt
C) Only if the work exceeds $10,000
D) Only if subcontractors are used
Correct Answer: B) No, work on contractor's own residence is exempt [CORRECT]
Rationale: Work performed on a contractor's own residence is exempt from licensing
requirements. This recognizes that self-regulated work on one's own property does not present
consumer protection concerns.
Question 13
New home construction (not repair or remodeling) falls under which licensing requirement?
A) Requires Class A MHIC license
B) Requires Class B MHIC license
C) Exempt from MHIC licensing
D) Requires special new construction endorsement
Correct Answer: C) Exempt from MHIC licensing [CORRECT]
Rationale: The MHIC regulates "home improvement," defined as repair, remodeling, or
renovation of existing residential structures. New construction falls under different regulatory
schemes (builder licensing or local requirements), not MHIC jurisdiction.
Question 14
A licensed architect performing work within their professional scope is:
A) Required to obtain an MHIC license in addition to their architectural license
B) Exempt from MHIC licensing requirements
C) Required to obtain a Class C license only
D) Required to partner with a licensed contractor
Correct Answer: B) Exempt from MHIC licensing requirements [CORRECT]
Rationale: Licensed architects and professional engineers are exempt when practicing within
their professional scope. This prevents duplicative licensing for professionals already regulated
by the State Board of Architects.
Question 15
Work performed under direct contract with the federal government is:
A) Subject to MHIC licensing regardless of the contracting party
B) Exempt from MHIC licensing requirements
C) Requires a special government contractor license
D) Only exempt if performed on military bases
Correct Answer: B) Exempt from MHIC licensing requirements [CORRECT]
Rationale: Work for federal, state, or local government entities is exempt from MHIC licensing.
This recognizes that government contracts involve different procurement regulations and
oversight mechanisms than consumer transactions.
Question 16
Where must a contractor display their MHIC license certificate?
A) Only at the job site during active work
B) At their place of business
M
IMPROVEMENT PRACTICE
TEST .PSI Exam | Complete
Solutions | MHIC License Prep |
Pass Guaranteed - A+ Graded
xam Overview:
E
This practice test covers all six domains of the Maryland Home Improvement Contractor
Examination administered by PSI, aligned with the Maryland Home Improvement Commission
(MHIC) standards and Maryland Business Regulation Article, Title 8.
[DOMAIN 1: MARYLAND HOME IMPROVEMENT LAW & REGULATIONS - 38 Questions]
Question 1
The Maryland Home Improvement Commission (MHIC) operates under which state
department?
A) Maryland Department of Commerce
B) Maryland Department of Labor
C) Maryland Department of Housing and Community Development
D) Maryland Department of Business and Economic Development
Correct Answer: B) Maryland Department of Labor [CORRECT]
Rationale: The MHIC is a unit within the Maryland Department of Labor, not an independent
agency or part of other departments. This organizational structure places contractor licensing
under the state's labor regulatory framework.
Question 2
How many members serve on the Maryland Home Improvement Commission, and who
appoints them?
A) 7 members appointed by the General Assembly
B) 9 members appointed by the Governor
C) 11 members appointed by the Secretary of Labor
D) 5 members elected by licensed contractors
Correct Answer: B) 9 members appointed by the Governor [CORRECT]
Rationale: Per Maryland Business Regulation Article, Title 8, the Commission consists of 9
members appointed by the Governor with the advice and consent of the Senate. This structure
ensures gubernatorial oversight of the licensing body.
Question 3
What is the primary legal authority that the MHIC enforces?
, ) Maryland Business Regulation Article, Title 7
A
B) Maryland Business Regulation Article, Title 8
C) Maryland Real Property Article, Title 10
D) Maryland Commercial Law Article, Title 12
Correct Answer: B) Maryland Business Regulation Article, Title 8 [CORRECT]
Rationale: The Maryland Home Improvement Law is codified in Business Regulation Article,
Title 8 of the Maryland Annotated Code. This statute establishes all licensing requirements,
prohibited acts, and enforcement mechanisms.
Question 4
Which of the following best describes the primary responsibility of the MHIC?
A) Collecting sales tax on home improvement materials
B) Licensing and regulating home improvement contractors
C) Issuing building permits for residential construction
D) Inspecting completed home improvement projects
Correct Answer: B) Licensing and regulating home improvement contractors [CORRECT]
Rationale: The MHIC's core mission is licensing and regulation. Building permits are issued by
local jurisdictions, sales tax is collected by the Comptroller, and inspections are performed by
local building officials—not the MHIC.
Question 5
A contractor must obtain an MHIC license before performing which of the following actions?
A) Purchasing materials from a supplier
B) Advertising or performing home improvement work
C) Hiring subcontractors for future projects
D) Renting construction equipment
Correct Answer: B) Advertising or performing home improvement work [CORRECT]
Rationale: Maryland law prohibits unlicensed contractors from advertising or performing home
improvement work. The license must be obtained BEFORE any solicitation or work begins,
making this a strict liability requirement.
Question 6
What is the maximum contract amount for a Class B MHIC license?
A) $2,500 per contract
B) $5,000 per contract
C) $10,000 per contract
D) $25,000 per contract
Correct Answer: C) $10,000 per contract [CORRECT]
Rationale: Class B licenses authorize contracts up to $10,000 per contract. Class C is limited to
$2,500, while Class A has no monetary limit. These thresholds determine the scope of work a
contractor may legally undertake.
Question 7
What is the contract limit for a Class C MHIC license?
A) $1,000 per contract
B) $2,500 per contract
C) $5,000 per contract
D) $7,500 per contract
, orrect Answer: B) $2,500 per contract [CORRECT]
C
Rationale: Class C licenses are designed for small-scale contractors with a maximum contract
limit of $2,500. This classification allows entry-level contractors to operate with reduced bonding
and insurance requirements.
Question 8
Which class of MHIC license has no monetary limit on contract amounts?
A) Class A
B) Class B
C) Class C
D) Class D
Correct Answer: A) Class A [CORRECT]
Rationale: Class A licenses are unlimited in contract amount, suitable for major renovation
contractors. Class B ($10,000 limit) and Class C ($2,500 limit) have strict monetary caps. There
is no Class D license classification.
Question 9
Who must pass the MHIC examination to qualify for a contractor license?
A) All employees of the contracting company
B) The qualifying individual listed on the license application
C) Every subcontractor working for the contractor
D) The homeowner for verification purposes
Correct Answer: B) The qualifying individual listed on the license application [CORRECT]
Rationale: Only the "qualifying individual"—the person designated as responsible for the
company's compliance—must pass the exam. This person serves as the licensed
representative, not every employee or subcontractor.
Question 10
How frequently must an MHIC license be renewed?
A) Annually
B) Every two years
C) Every three years
D) Every five years
Correct Answer: B) Every two years [CORRECT]
Rationale: MHIC licenses expire biennially (every two years). Licensees must submit renewal
applications, pay fees, and maintain insurance requirements to continue operating legally.
Question 11
Which of the following activities is EXEMPT from MHIC licensing requirements?
A) Remodeling a client's kitchen for $15,000
B) Performing handyman work under $500 without advertising as home improvement
C) Installing a new roof on a residential property
D) Building a deck for a homeowner
Correct Answer: B) Performing handyman work under $500 without advertising as home
improvement [CORRECT]
Rationale: The "handyman exemption" allows work under $500 provided the person does not
advertise as a home improvement contractor. This exemption protects casual, small-scale repair
work from burdensome licensing requirements.
, uestion 12
Q
A contractor performs work on their own primary residence. Is an MHIC license required?
A) Yes, all residential work requires a license
B) No, work on contractor's own residence is exempt
C) Only if the work exceeds $10,000
D) Only if subcontractors are used
Correct Answer: B) No, work on contractor's own residence is exempt [CORRECT]
Rationale: Work performed on a contractor's own residence is exempt from licensing
requirements. This recognizes that self-regulated work on one's own property does not present
consumer protection concerns.
Question 13
New home construction (not repair or remodeling) falls under which licensing requirement?
A) Requires Class A MHIC license
B) Requires Class B MHIC license
C) Exempt from MHIC licensing
D) Requires special new construction endorsement
Correct Answer: C) Exempt from MHIC licensing [CORRECT]
Rationale: The MHIC regulates "home improvement," defined as repair, remodeling, or
renovation of existing residential structures. New construction falls under different regulatory
schemes (builder licensing or local requirements), not MHIC jurisdiction.
Question 14
A licensed architect performing work within their professional scope is:
A) Required to obtain an MHIC license in addition to their architectural license
B) Exempt from MHIC licensing requirements
C) Required to obtain a Class C license only
D) Required to partner with a licensed contractor
Correct Answer: B) Exempt from MHIC licensing requirements [CORRECT]
Rationale: Licensed architects and professional engineers are exempt when practicing within
their professional scope. This prevents duplicative licensing for professionals already regulated
by the State Board of Architects.
Question 15
Work performed under direct contract with the federal government is:
A) Subject to MHIC licensing regardless of the contracting party
B) Exempt from MHIC licensing requirements
C) Requires a special government contractor license
D) Only exempt if performed on military bases
Correct Answer: B) Exempt from MHIC licensing requirements [CORRECT]
Rationale: Work for federal, state, or local government entities is exempt from MHIC licensing.
This recognizes that government contracts involve different procurement regulations and
oversight mechanisms than consumer transactions.
Question 16
Where must a contractor display their MHIC license certificate?
A) Only at the job site during active work
B) At their place of business
