MARYLAND HOME IMPROVEMENT EXAM SCRIPT
2025/2026 QUESTIONS AND ANSWERS GRADED A++
✔✔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.
, ✔✔What is the NOTICE OF CANCELLATION requirement for Door to Door Sales Act?
- ✔✔Each contract must include Notice of Cancellation attached to the contract and
contractor must obtain a signed written acknowledgement that the buyer has been
informed of his/her cancellation rights. The information must include where to send the
cancellation notice, by which date. If this information is not included or given to
homeowner, the buyer may cancel in any manner and by any means.
✔✔Notice of cancellation - good available to buyer - ✔✔If goods are made available to
the contractor and the contractor does not pick them up within 20 days of the date of
your notice, you may dispose of the goods without any further obligation
✔✔When is a Home Improvement Job NOT covered? - ✔✔The Door to Door sales act
does NOT cover a home improvement project made:
1) pursuant to prior negotiations at a retail business with a fixed permanent location
where consumer goods are exhibited or consumer services are offered for sale on a
continuing bases
2) In which the buyer has initiated contact and the goods or services are needed to
meet a bona fide personal emergency of the buyer and the buyer gives the seller a
separate dated and signed personal statement in the buyers handwriting that describes
the situation that required immediate remedy and expressly acknowledges and waives
rights to cancel the sale, and the seller in good faith makes a substantial beginning of
the performance of the contract
✔✔Who enforces Door to Door sales act? - ✔✔Attorney General of MD
✔✔How many contractors can a salesperson represent? - ✔✔2 max, but may only
represent ONE at the time of sale.
✔✔What happens if a salesperson leaves a contractor's team? - ✔✔The contractor is
responsible for notifying the commission
✔✔What are the provisions for advertising under home improvement law? - ✔✔1)
Advertising must contain name, and MHIC license number regardless of whether the
advertisement is in print, radio or TV.
2) The advertisement cannot be false, deceptive or misleading
For example: if advertisement contains a price which does not include all costs of items
necessary for the proper function or appearance of the product, this must be clearly
stated. Likewise, any limitation to what will be supplied at the advertised price shall be
stated clearly next to the statement; if delivery or installation charges ar extra, the
advertisement shall disclose the fact.
✔✔Vehicles and MIHC - Where is the license number to be displayed? - ✔✔both sides
of all vehicles
2025/2026 QUESTIONS AND ANSWERS GRADED A++
✔✔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.
, ✔✔What is the NOTICE OF CANCELLATION requirement for Door to Door Sales Act?
- ✔✔Each contract must include Notice of Cancellation attached to the contract and
contractor must obtain a signed written acknowledgement that the buyer has been
informed of his/her cancellation rights. The information must include where to send the
cancellation notice, by which date. If this information is not included or given to
homeowner, the buyer may cancel in any manner and by any means.
✔✔Notice of cancellation - good available to buyer - ✔✔If goods are made available to
the contractor and the contractor does not pick them up within 20 days of the date of
your notice, you may dispose of the goods without any further obligation
✔✔When is a Home Improvement Job NOT covered? - ✔✔The Door to Door sales act
does NOT cover a home improvement project made:
1) pursuant to prior negotiations at a retail business with a fixed permanent location
where consumer goods are exhibited or consumer services are offered for sale on a
continuing bases
2) In which the buyer has initiated contact and the goods or services are needed to
meet a bona fide personal emergency of the buyer and the buyer gives the seller a
separate dated and signed personal statement in the buyers handwriting that describes
the situation that required immediate remedy and expressly acknowledges and waives
rights to cancel the sale, and the seller in good faith makes a substantial beginning of
the performance of the contract
✔✔Who enforces Door to Door sales act? - ✔✔Attorney General of MD
✔✔How many contractors can a salesperson represent? - ✔✔2 max, but may only
represent ONE at the time of sale.
✔✔What happens if a salesperson leaves a contractor's team? - ✔✔The contractor is
responsible for notifying the commission
✔✔What are the provisions for advertising under home improvement law? - ✔✔1)
Advertising must contain name, and MHIC license number regardless of whether the
advertisement is in print, radio or TV.
2) The advertisement cannot be false, deceptive or misleading
For example: if advertisement contains a price which does not include all costs of items
necessary for the proper function or appearance of the product, this must be clearly
stated. Likewise, any limitation to what will be supplied at the advertised price shall be
stated clearly next to the statement; if delivery or installation charges ar extra, the
advertisement shall disclose the fact.
✔✔Vehicles and MIHC - Where is the license number to be displayed? - ✔✔both sides
of all vehicles
