MHIC Contractor Actual Exam
2026/2027 | Verified Questions
Maryland Home Improvement Commission (MHIC) / PSI
| Verified Q&A | Professional Home Improvement
Contractor Candidates
55 Official Examination Questions | 39 Correct Selections Required (70% Passing Score)
This comprehensive examination set comprises exactly 55 original questions designed to
reinforce official Maryland Home Improvement Commission (MHIC) licensing objectives for
actual exam readiness and professional competency. The examination covers four primary
domains: Maryland Home Improvement Law, Regulations, and Business Management;
Contracts, Estimating, and Project Management; Building Codes, Safety, and Environmental
Standards; and Construction, Remodeling, and Trade Knowledge (Structures, Exterior, Interior,
and Systems). In accordance with the official PSI Maryland Home Improvement Contractor
Examination blueprint, candidates must complete 55 questions and achieve a minimum of 39
correct selections to attain the required 70% passing score. Each item in this verified collection
addresses distinct regulatory requirements, contract principles, safety protocols, and trade
applications to ensure complete mastery of professional home improvement contractor
standards in 2026/2027.
Domain: Maryland Home Improvement Law, Regulations, and
Business Management
1. Under Title 8, Subtitle 1 of the Maryland Home Improvement Law, which of the
following residential property activities requires a contractor to hold an active
MHIC contractor license?
A. Painting and decorating the interior of a commercial office suite
B. Erecting a custom single-family home on vacant residential land
C. Replacing an asphalt shingle roof and vinyl siding on a three-unit residential dwelling
D. Performing routine maintenance on an apartment complex by a direct W-2 property
employee
Correct Answer: C
Rationale: Under Maryland Home Improvement Law (Title 8, Subtitle 1), home
improvement licensure is mandatory for any contractor performing repairs, remodeling,
alterations, or additions on existing residential property comprising up to four single-
family units. Commercial construction, custom home construction on vacant land, and
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
, routine maintenance by direct property employees are regulated under separate statutory
provisions or exempt from MHIC licensure.
2. According to MHIC regulations governing salesperson representation, what
restriction applies to a licensed home improvement salesperson?
A. A salesperson may represent up to three licensed contractors simultaneously without
disclosure
B. A salesperson may only represent one licensed contractor at a time unless explicit written
approval is granted by the Commission
C. A salesperson can execute contracts independently without contractor signature if the
contract price is under $5,000
D. A salesperson is permitted to collect cash deposits made payable directly to their personal
account
Correct Answer: B
Rationale: Under Title 8 of the Maryland Business Regulation Article, a licensed home
improvement salesperson is restricted to representing only one licensed contractor at any
given time. A salesperson may represent more than one contractor only if the Commission
grants explicit written approval after examining the applications and consent of all
involved contractors.
3. What is the maximum allowable deposit a Maryland home improvement
contractor may collect from a homeowner prior to the commencement of work?
A. 10 percent of the total contract price or $1,000, whichever is less
B. 25 percent of the total contract price regardless of special order material requirements
C. One-third (33.3 percent) of the total contract price
D. 50 percent of the total contract price when custom architectural cabinets are ordered
Correct Answer: C
Rationale: Maryland Home Improvement Law strictly mandates that a contractor may
not demand or receive a down payment or deposit exceeding one-third (33.3%) of the total
contract price before home improvement work commences. Collecting more than one-third
is a direct statutory violation subject to regulatory penalty.
4. Which of the following elements must be included in every written Maryland
home improvement contract under COMAR regulations?
A. The contractor's personal home address and social security number
B. Approximate dates when performance of work will begin and be completed, along with
the total price and contractor's MHIC license number
C. A clause waiving the homeowner's statutory rights to file a claim against the Guaranty
Fund
D. A provision requiring all disputes to be settled through binding international arbitration
Correct Answer: B
Rationale: Under Maryland Home Improvement Law, every home improvement contract
must be in writing, signed by all parties, and contain the contractor's name, address,
MHIC license number, detailed scope of work, total contract price, and the approximate
dates when performance of the home improvement will begin and be completed.
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
, 5. What is the maximum monetary payout allowable from the Maryland Home
Improvement Guaranty Fund to compensate an aggrieved homeowner for the
actual financial loss caused by a single contractor?
A. $15,000 per claim
B. $20,000 per claim
C. $30,000 per claim, subject to a $100,000 aggregate limit per contractor
D. $50,000 per claim without any aggregate contractor limitation
Correct Answer: C
Rationale: The Maryland Home Improvement Guaranty Fund provides financial
compensation to homeowners who suffer actual loss due to poor workmanship or failure to
perform by a licensed contractor. By statute, the maximum recovery per claim is $30,000,
and the total aggregate reimbursement for all claims against a single contractor cannot
exceed $100,000.
6. Under Maryland and Federal truth-in-lending regulations for door-to-door sales
and residential home improvement contracts, how many business days does a
homeowner have to cancel a contract without penalty?
A. Exactly 24 hours from the time of signature
B. Three business days from the date of contract execution
C. Five calendar days from the delivery of materials to the property
D. Seven business days from the issuance of the building permit
Correct Answer: B
Rationale: Both Maryland Home Improvement Law and the Federal Trade Commission
(FTC) Door-to-Door Sales Rule mandate that homeowners must be provided with a
statutory three-business-day right of rescission, during which they may cancel the written
home improvement contract without penalty or obligation.
7. When a homeowner pays a licensed MHIC general contractor in full for a
completed home improvement project, what protection does Maryland statutory
law provide regarding subcontractor mechanic's liens?
A. Subcontractors may still enforce a mechanic's lien against the property if the general
contractor defaulted on payment
B. The homeowner's property is immune from a mechanic's lien by a subcontractor if the
homeowner can prove full payment was made to the general contractor
C. The homeowner must pay the subcontractor directly and seek reimbursement from the
Guaranty Fund
D. Mechanic's liens can only be filed against residential properties that exceed 5,000 square
feet
Correct Answer: B
Rationale: Under Section 9-104 of the Maryland Real Property Article, if a single-family
residential property owner pays the prime contractor in full for the work performed, an
unpaid subcontractor or material supplier cannot attach or enforce a mechanic's lien
against the homeowner's property.
8. How must a licensed Maryland home improvement contractor display their
MHIC license number on advertising and promotional materials?
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
2026/2027 | Verified Questions
Maryland Home Improvement Commission (MHIC) / PSI
| Verified Q&A | Professional Home Improvement
Contractor Candidates
55 Official Examination Questions | 39 Correct Selections Required (70% Passing Score)
This comprehensive examination set comprises exactly 55 original questions designed to
reinforce official Maryland Home Improvement Commission (MHIC) licensing objectives for
actual exam readiness and professional competency. The examination covers four primary
domains: Maryland Home Improvement Law, Regulations, and Business Management;
Contracts, Estimating, and Project Management; Building Codes, Safety, and Environmental
Standards; and Construction, Remodeling, and Trade Knowledge (Structures, Exterior, Interior,
and Systems). In accordance with the official PSI Maryland Home Improvement Contractor
Examination blueprint, candidates must complete 55 questions and achieve a minimum of 39
correct selections to attain the required 70% passing score. Each item in this verified collection
addresses distinct regulatory requirements, contract principles, safety protocols, and trade
applications to ensure complete mastery of professional home improvement contractor
standards in 2026/2027.
Domain: Maryland Home Improvement Law, Regulations, and
Business Management
1. Under Title 8, Subtitle 1 of the Maryland Home Improvement Law, which of the
following residential property activities requires a contractor to hold an active
MHIC contractor license?
A. Painting and decorating the interior of a commercial office suite
B. Erecting a custom single-family home on vacant residential land
C. Replacing an asphalt shingle roof and vinyl siding on a three-unit residential dwelling
D. Performing routine maintenance on an apartment complex by a direct W-2 property
employee
Correct Answer: C
Rationale: Under Maryland Home Improvement Law (Title 8, Subtitle 1), home
improvement licensure is mandatory for any contractor performing repairs, remodeling,
alterations, or additions on existing residential property comprising up to four single-
family units. Commercial construction, custom home construction on vacant land, and
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
, routine maintenance by direct property employees are regulated under separate statutory
provisions or exempt from MHIC licensure.
2. According to MHIC regulations governing salesperson representation, what
restriction applies to a licensed home improvement salesperson?
A. A salesperson may represent up to three licensed contractors simultaneously without
disclosure
B. A salesperson may only represent one licensed contractor at a time unless explicit written
approval is granted by the Commission
C. A salesperson can execute contracts independently without contractor signature if the
contract price is under $5,000
D. A salesperson is permitted to collect cash deposits made payable directly to their personal
account
Correct Answer: B
Rationale: Under Title 8 of the Maryland Business Regulation Article, a licensed home
improvement salesperson is restricted to representing only one licensed contractor at any
given time. A salesperson may represent more than one contractor only if the Commission
grants explicit written approval after examining the applications and consent of all
involved contractors.
3. What is the maximum allowable deposit a Maryland home improvement
contractor may collect from a homeowner prior to the commencement of work?
A. 10 percent of the total contract price or $1,000, whichever is less
B. 25 percent of the total contract price regardless of special order material requirements
C. One-third (33.3 percent) of the total contract price
D. 50 percent of the total contract price when custom architectural cabinets are ordered
Correct Answer: C
Rationale: Maryland Home Improvement Law strictly mandates that a contractor may
not demand or receive a down payment or deposit exceeding one-third (33.3%) of the total
contract price before home improvement work commences. Collecting more than one-third
is a direct statutory violation subject to regulatory penalty.
4. Which of the following elements must be included in every written Maryland
home improvement contract under COMAR regulations?
A. The contractor's personal home address and social security number
B. Approximate dates when performance of work will begin and be completed, along with
the total price and contractor's MHIC license number
C. A clause waiving the homeowner's statutory rights to file a claim against the Guaranty
Fund
D. A provision requiring all disputes to be settled through binding international arbitration
Correct Answer: B
Rationale: Under Maryland Home Improvement Law, every home improvement contract
must be in writing, signed by all parties, and contain the contractor's name, address,
MHIC license number, detailed scope of work, total contract price, and the approximate
dates when performance of the home improvement will begin and be completed.
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
, 5. What is the maximum monetary payout allowable from the Maryland Home
Improvement Guaranty Fund to compensate an aggrieved homeowner for the
actual financial loss caused by a single contractor?
A. $15,000 per claim
B. $20,000 per claim
C. $30,000 per claim, subject to a $100,000 aggregate limit per contractor
D. $50,000 per claim without any aggregate contractor limitation
Correct Answer: C
Rationale: The Maryland Home Improvement Guaranty Fund provides financial
compensation to homeowners who suffer actual loss due to poor workmanship or failure to
perform by a licensed contractor. By statute, the maximum recovery per claim is $30,000,
and the total aggregate reimbursement for all claims against a single contractor cannot
exceed $100,000.
6. Under Maryland and Federal truth-in-lending regulations for door-to-door sales
and residential home improvement contracts, how many business days does a
homeowner have to cancel a contract without penalty?
A. Exactly 24 hours from the time of signature
B. Three business days from the date of contract execution
C. Five calendar days from the delivery of materials to the property
D. Seven business days from the issuance of the building permit
Correct Answer: B
Rationale: Both Maryland Home Improvement Law and the Federal Trade Commission
(FTC) Door-to-Door Sales Rule mandate that homeowners must be provided with a
statutory three-business-day right of rescission, during which they may cancel the written
home improvement contract without penalty or obligation.
7. When a homeowner pays a licensed MHIC general contractor in full for a
completed home improvement project, what protection does Maryland statutory
law provide regarding subcontractor mechanic's liens?
A. Subcontractors may still enforce a mechanic's lien against the property if the general
contractor defaulted on payment
B. The homeowner's property is immune from a mechanic's lien by a subcontractor if the
homeowner can prove full payment was made to the general contractor
C. The homeowner must pay the subcontractor directly and seek reimbursement from the
Guaranty Fund
D. Mechanic's liens can only be filed against residential properties that exceed 5,000 square
feet
Correct Answer: B
Rationale: Under Section 9-104 of the Maryland Real Property Article, if a single-family
residential property owner pays the prime contractor in full for the work performed, an
unpaid subcontractor or material supplier cannot attach or enforce a mechanic's lien
against the homeowner's property.
8. How must a licensed Maryland home improvement contractor display their
MHIC license number on advertising and promotional materials?
MHIC Contractor Actual Exam 2026/2027 | Verified Questions
