1|Page
MARYLAND HOME IMPROVEMENT TEST
EXAM/ACTUAL EXAM QUESTIONS WITH WELL
DETAILED ANSWERS/100% PASS/NEWEST UPDATE
How long does a licensee have to notify the Commission of
change in business ownership or control - . . ANSWER ✓✓ 10
days
How long if the Commissioner's term? - . . ANSWER ✓✓ 4 years
How Many commissioners are there? - . . ANSWER ✓✓ 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)
How many contractors can a salesperson represent? - . .
ANSWER ✓✓ 2 max, but may only represent ONE at the time of
sale.
How many days does the contractor have to respond to claims
from a homeowner once it has been received by the
commission? - . . ANSWER ✓✓ Once the Commission receives a
claim, it send a copy to the contractor who has 10 days to
respond back to the Commission.
,2|Page
"Consumer goods" or "consumer services" mean - . . ANSWER
✓✓ (1) good or services purchased, leased or rented primarily
for personal, family or househol dpurposes; and
(2) courses of instruction or training regardless of the purpose
for which they are taken
Add markup and determine profit - . . ANSWER ✓✓ Usually 15%
Advantages of C Corp - . . ANSWER ✓✓ - Separate legal entity
- Limited liability for stock holders
- Unlimited life of business
- Availability of capital resources
- Transfer of ownership thru sale of stock
Advantages of LLC - . . ANSWER ✓✓ - Limited disclosure of
owners
- limited documentation
- No advance IRS filings
- No public disclosure finances
- Limited liability for managers and members
- Ability to delegate management to a non member
,3|Page
Advantages of partnership - . . ANSWER ✓✓ - Ease of formation
- Direct profit rewards
- Larger management base that a sole proprietorship
Amount subject to a lien - . . ANSWER ✓✓ Lien may be
established up to 15% of the building's value regardless of the
amount contracted for labor and materials. Additionally, if work
is done on an existing building does not increase the value of the
property by 15%, then MD will not permit establishment of the
mechanics lien. This does not apply to newly constructed
building.
Basics to include in Company handbook - . . ANSWER ✓✓ -
Company history
- Compensation guidelines (introductory period, full time
requirements etc)
- Payroll distribution dates and times
- Benefits
- Normal working hours
- Overtime pay
- Vacation time
- Sick days
- Policy on sexual harassment
, 4|Page
- Policy on use of illegal drugs
- Non discrimination policy
- Rules of conduct (disciplinary action for insubordination,
fighting, etc)
- Safety policies
- Equipment and tool policies
- Disciplinary actions procedures
Bond language or requirements - . . ANSWER ✓✓ 1) Total
amount required for the bond (varies and can be up to 100% value
of contract)
2) Length of the bond
3) Requirement for notice of defect or lack of maintenance (a
period of completion of corrections is generally outlined after
notice of defect, and it also establishes a time period of
response)
4) Bond enforcement (if a contractor fails to successfully
complete work or violates any requirement of the bond,
enforcement measures are outlined here)
C Corps - . . ANSWER ✓✓ Ownership of corp by stockholders
and a corporation is considered its own legal entity. The
corporation is responsibly for all assets and debts and not the
stockholders.
MARYLAND HOME IMPROVEMENT TEST
EXAM/ACTUAL EXAM QUESTIONS WITH WELL
DETAILED ANSWERS/100% PASS/NEWEST UPDATE
How long does a licensee have to notify the Commission of
change in business ownership or control - . . ANSWER ✓✓ 10
days
How long if the Commissioner's term? - . . ANSWER ✓✓ 4 years
How Many commissioners are there? - . . ANSWER ✓✓ 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)
How many contractors can a salesperson represent? - . .
ANSWER ✓✓ 2 max, but may only represent ONE at the time of
sale.
How many days does the contractor have to respond to claims
from a homeowner once it has been received by the
commission? - . . ANSWER ✓✓ Once the Commission receives a
claim, it send a copy to the contractor who has 10 days to
respond back to the Commission.
,2|Page
"Consumer goods" or "consumer services" mean - . . ANSWER
✓✓ (1) good or services purchased, leased or rented primarily
for personal, family or househol dpurposes; and
(2) courses of instruction or training regardless of the purpose
for which they are taken
Add markup and determine profit - . . ANSWER ✓✓ Usually 15%
Advantages of C Corp - . . ANSWER ✓✓ - Separate legal entity
- Limited liability for stock holders
- Unlimited life of business
- Availability of capital resources
- Transfer of ownership thru sale of stock
Advantages of LLC - . . ANSWER ✓✓ - Limited disclosure of
owners
- limited documentation
- No advance IRS filings
- No public disclosure finances
- Limited liability for managers and members
- Ability to delegate management to a non member
,3|Page
Advantages of partnership - . . ANSWER ✓✓ - Ease of formation
- Direct profit rewards
- Larger management base that a sole proprietorship
Amount subject to a lien - . . ANSWER ✓✓ Lien may be
established up to 15% of the building's value regardless of the
amount contracted for labor and materials. Additionally, if work
is done on an existing building does not increase the value of the
property by 15%, then MD will not permit establishment of the
mechanics lien. This does not apply to newly constructed
building.
Basics to include in Company handbook - . . ANSWER ✓✓ -
Company history
- Compensation guidelines (introductory period, full time
requirements etc)
- Payroll distribution dates and times
- Benefits
- Normal working hours
- Overtime pay
- Vacation time
- Sick days
- Policy on sexual harassment
, 4|Page
- Policy on use of illegal drugs
- Non discrimination policy
- Rules of conduct (disciplinary action for insubordination,
fighting, etc)
- Safety policies
- Equipment and tool policies
- Disciplinary actions procedures
Bond language or requirements - . . ANSWER ✓✓ 1) Total
amount required for the bond (varies and can be up to 100% value
of contract)
2) Length of the bond
3) Requirement for notice of defect or lack of maintenance (a
period of completion of corrections is generally outlined after
notice of defect, and it also establishes a time period of
response)
4) Bond enforcement (if a contractor fails to successfully
complete work or violates any requirement of the bond,
enforcement measures are outlined here)
C Corps - . . ANSWER ✓✓ Ownership of corp by stockholders
and a corporation is considered its own legal entity. The
corporation is responsibly for all assets and debts and not the
stockholders.
