MARYLAND HOME IMPROVEMENT
EXAM STUDY GUIDE 2026 – COMPLETE
CONCEPT REVIEW & PRACTICE
MATERIALS (LATEST EDITION)
Maryland Home Improvement Exam Study Guide – Practice Questions
LAW & REGULATIONS (Questions 1-30)
1. What is the primary purpose of the Maryland Home Improvement Law (MHIL)?
A. To set minimum quality standards for building materials.
B. To guarantee the workmanship of all licensed contractors.
C. To ensure the financial reliability of contractors.
D. ✓ To protect consumers from unfair and deceptive trade practices.
2. Who must be licensed under the Maryland Home Improvement Law?
A. Only contractors who perform work valued over $25,000.
B. ✓ Any person or business that performs, offers, or sells home improvement work for a
price exceeding $1,000.
C. Only contractors who employ three or more people.
D. Only contractors performing structural modifications.
3. The Maryland Home Improvement Commission (MHIC) requires a licensed contractor to
maintain a surety bond in the minimum amount of:
A. $10,000
B. ✓ $20,000
C. $50,000
D. $100,000
4. A home improvement contract in Maryland is not legally valid unless it:
A. Is notarized.
B. ✓ Is signed by both the owner and the contractor before work begins or materials are
delivered.
C. Includes a detailed list of all subcontractors to be used.
D. Is approved by a local building inspector.
,5. The "cooling-off period" for a home improvement contract in Maryland gives the consumer
the right to cancel within:
A. 24 hours
B. ✓ 3 business days
C. 5 calendar days
D. 7 business days
6. Which of the following activities is generally EXEMPT from requiring an MHIC license?
A. Building a deck attached to a house.
B. Installing a new bathroom.
C. ✓ Performing work as an employee of a licensed contractor under their supervision.
D. Remodeling a kitchen.
7. Failure to comply with the MHIL can result in all the following EXCEPT:
A. Civil penalties and fines.
B. Suspension or revocation of license.
C. ✓ Automatic criminal felony charges.
D. Consumer restitution orders.
8. A change order is required when:
A. A subcontractor is replaced.
B. ✓ There is any change in the work, price, or time specified in the original contract.
C. The work takes more than 30 days.
D. The homeowner buys their own materials.
9. How long must a contractor maintain records of all home improvement contracts?
A. 1 year
B. 2 years
C. ✓ 3 years
D. 5 years
10. The MHIC Guaranty Fund may compensate an owner for losses caused by a licensed
contractor up to what maximum amount?
A. $10,000
B. ✓ $15,000
C. $20,000
D. The full contract amount
11. To file a claim against the Guaranty Fund, an owner must first obtain:
A. A criminal conviction against the contractor.
,B. ✓ A final court judgment or arbitration award against the contractor.
C. A letter from the Better Business Bureau.
D. An estimate from another contractor for the repair cost.
12. A contractor's license must be displayed:
A. Only at the contractor's primary office.
B. On the dashboard of all company vehicles.
C. ✓ Prominently in all places of business and in all advertisements.
D. It does not need to be displayed.
13. Advertising by a licensed contractor must always include:
A. The owner's personal cell phone number.
B. ✓ The contractor's MHIC license number.
C. A list of all past clients.
D. A guaranteed completion date.
14. Which of the following would be considered an "unfair or deceptive trade practice" under
MHIL?
A. ✓ Abandoning a project without justification after receiving payment.
B. Subcontracting a portion of the work.
C. Ordering materials after the contract is signed.
D. Using a standard form contract.
15. A contractor may legally require a down payment before starting work. What is the
MAXIMUM down payment allowed by MHIC regulation?
A. 10% of the contract price
B. ✓ 1/3 of the contract price
C. 50% of the contract price
D. There is no statutory limit.
16. A contract is considered "financed" if the consumer signs:
A. Any contract over $5,000.
B. A contract with a payment schedule.
C. ✓ A promissory note or other evidence of indebtedness.
D. A contract that includes labor and materials.
17. The "Mechanic's Lien" law in Maryland is designed to protect:
A. Homeowners from contractor disputes.
B. ✓ Contractors and suppliers who provide labor or materials but are not paid.
, C. Banks holding mortgages on the property.
D. Local governments for unpaid taxes.
18. Before recording a mechanic's lien, a contractor must generally provide the homeowner
with a:
A. Notice of Intent to Lien.
B. Copy of all supplier invoices.
C. ✓ A "Notice of Right to Claim Lien" at the time of contract signing.
D. A final warning 48 hours prior.
19. Which entity enforces building codes for safety and zoning at the local level in Maryland?
A. MHIC
B. Maryland Department of Labor
C. ✓ County or City government
D. Federal Trade Commission
20. A permit is typically required for which type of work?
A. Painting interior walls.
B. ✓ Installing a new electrical circuit.
C. Replacing a faucet.
D. Installing vinyl flooring.
21. Who is ultimately responsible for obtaining necessary building permits for a home
improvement project?
A. The property owner, always.
B. The architect or designer.
C. ✓ The contractor, unless the contract explicitly states otherwise.
D. The subcontractor performing the work.
22. OSHA regulations primarily concern:
A. Consumer billing practices.
B. ✓ Workplace safety and health for employees.
C. Contractor licensing requirements.
D. Homeowner insurance.
23. A "competent person" on a job site, as defined by OSHA, is someone who:
A. Has a college degree in engineering.
B. ✓ Is capable of identifying hazards and has authority to correct them.
C. Has worked in construction for 5 years.
D. Is the property owner.
EXAM STUDY GUIDE 2026 – COMPLETE
CONCEPT REVIEW & PRACTICE
MATERIALS (LATEST EDITION)
Maryland Home Improvement Exam Study Guide – Practice Questions
LAW & REGULATIONS (Questions 1-30)
1. What is the primary purpose of the Maryland Home Improvement Law (MHIL)?
A. To set minimum quality standards for building materials.
B. To guarantee the workmanship of all licensed contractors.
C. To ensure the financial reliability of contractors.
D. ✓ To protect consumers from unfair and deceptive trade practices.
2. Who must be licensed under the Maryland Home Improvement Law?
A. Only contractors who perform work valued over $25,000.
B. ✓ Any person or business that performs, offers, or sells home improvement work for a
price exceeding $1,000.
C. Only contractors who employ three or more people.
D. Only contractors performing structural modifications.
3. The Maryland Home Improvement Commission (MHIC) requires a licensed contractor to
maintain a surety bond in the minimum amount of:
A. $10,000
B. ✓ $20,000
C. $50,000
D. $100,000
4. A home improvement contract in Maryland is not legally valid unless it:
A. Is notarized.
B. ✓ Is signed by both the owner and the contractor before work begins or materials are
delivered.
C. Includes a detailed list of all subcontractors to be used.
D. Is approved by a local building inspector.
,5. The "cooling-off period" for a home improvement contract in Maryland gives the consumer
the right to cancel within:
A. 24 hours
B. ✓ 3 business days
C. 5 calendar days
D. 7 business days
6. Which of the following activities is generally EXEMPT from requiring an MHIC license?
A. Building a deck attached to a house.
B. Installing a new bathroom.
C. ✓ Performing work as an employee of a licensed contractor under their supervision.
D. Remodeling a kitchen.
7. Failure to comply with the MHIL can result in all the following EXCEPT:
A. Civil penalties and fines.
B. Suspension or revocation of license.
C. ✓ Automatic criminal felony charges.
D. Consumer restitution orders.
8. A change order is required when:
A. A subcontractor is replaced.
B. ✓ There is any change in the work, price, or time specified in the original contract.
C. The work takes more than 30 days.
D. The homeowner buys their own materials.
9. How long must a contractor maintain records of all home improvement contracts?
A. 1 year
B. 2 years
C. ✓ 3 years
D. 5 years
10. The MHIC Guaranty Fund may compensate an owner for losses caused by a licensed
contractor up to what maximum amount?
A. $10,000
B. ✓ $15,000
C. $20,000
D. The full contract amount
11. To file a claim against the Guaranty Fund, an owner must first obtain:
A. A criminal conviction against the contractor.
,B. ✓ A final court judgment or arbitration award against the contractor.
C. A letter from the Better Business Bureau.
D. An estimate from another contractor for the repair cost.
12. A contractor's license must be displayed:
A. Only at the contractor's primary office.
B. On the dashboard of all company vehicles.
C. ✓ Prominently in all places of business and in all advertisements.
D. It does not need to be displayed.
13. Advertising by a licensed contractor must always include:
A. The owner's personal cell phone number.
B. ✓ The contractor's MHIC license number.
C. A list of all past clients.
D. A guaranteed completion date.
14. Which of the following would be considered an "unfair or deceptive trade practice" under
MHIL?
A. ✓ Abandoning a project without justification after receiving payment.
B. Subcontracting a portion of the work.
C. Ordering materials after the contract is signed.
D. Using a standard form contract.
15. A contractor may legally require a down payment before starting work. What is the
MAXIMUM down payment allowed by MHIC regulation?
A. 10% of the contract price
B. ✓ 1/3 of the contract price
C. 50% of the contract price
D. There is no statutory limit.
16. A contract is considered "financed" if the consumer signs:
A. Any contract over $5,000.
B. A contract with a payment schedule.
C. ✓ A promissory note or other evidence of indebtedness.
D. A contract that includes labor and materials.
17. The "Mechanic's Lien" law in Maryland is designed to protect:
A. Homeowners from contractor disputes.
B. ✓ Contractors and suppliers who provide labor or materials but are not paid.
, C. Banks holding mortgages on the property.
D. Local governments for unpaid taxes.
18. Before recording a mechanic's lien, a contractor must generally provide the homeowner
with a:
A. Notice of Intent to Lien.
B. Copy of all supplier invoices.
C. ✓ A "Notice of Right to Claim Lien" at the time of contract signing.
D. A final warning 48 hours prior.
19. Which entity enforces building codes for safety and zoning at the local level in Maryland?
A. MHIC
B. Maryland Department of Labor
C. ✓ County or City government
D. Federal Trade Commission
20. A permit is typically required for which type of work?
A. Painting interior walls.
B. ✓ Installing a new electrical circuit.
C. Replacing a faucet.
D. Installing vinyl flooring.
21. Who is ultimately responsible for obtaining necessary building permits for a home
improvement project?
A. The property owner, always.
B. The architect or designer.
C. ✓ The contractor, unless the contract explicitly states otherwise.
D. The subcontractor performing the work.
22. OSHA regulations primarily concern:
A. Consumer billing practices.
B. ✓ Workplace safety and health for employees.
C. Contractor licensing requirements.
D. Homeowner insurance.
23. A "competent person" on a job site, as defined by OSHA, is someone who:
A. Has a college degree in engineering.
B. ✓ Is capable of identifying hazards and has authority to correct them.
C. Has worked in construction for 5 years.
D. Is the property owner.
