MHIC - Maryland Home Improvement Contractor Business and Labor Practices Questions and Answers 1 — Questions and Answers
Question 1: A licensed Maryland Home Improvement salesperson may represent a maximum of how many licensed contractors at any given time?
- One
- Two (Correct answer)
- Three
- There is no limit
Correct answer: Two
According to the Maryland Home Improvement Commission (MHIC) regulations, a licensed salesperson is permitted to represent no more than two licensed contractors simultaneously.
Question 2: A contractor is preparing a home improvement contract for a $30,000 kitchen remodel. What is the maximum deposit the contractor can legally require from the homeowner before work begins?
- $5,000
- $15,000
- $10,000 (Correct answer)
- Any amount agreed upon in the contract
Correct answer: $10,000
Maryland law explicitly prohibits a home improvement contractor from accepting more than one-third (1/3) of the total contract price as a deposit before or at the time of signing the contract. For a $30,000 project, this amounts to a maximum deposit of $10,000.
Question 3: Which of the following is a mandatory requirement for all advertisements for a home improvement business in Maryland?
- The business's years of experience.
- A list of services offered.
- The contractor's personal phone number.
- The MHIC license number. (Correct answer)
Correct answer: The MHIC license number.
The Maryland Home Improvement Law requires that all advertisements, including business cards, websites, and vehicles, must conspicuously display the contractor's MHIC license number.
Question 4: A licensed contractor in Maryland must notify the MHIC of any change in their business address or trade name within how many days?
- 10 days (Correct answer)
- 30 days
- 60 days
- 90 days
Correct answer: 10 days
MHIC regulations require licensees to notify the Commission of any change of address, trade name, or business ownership within 10 days of the change. This notification must be sent via certified mail.
Question 5: A subcontractor is hired by a licensed general contractor to perform electrical work on a residential remodeling project. Under Maryland law, which of the following is true regarding the subcontractor's licensing requirements?
- The subcontractor must have their own MHIC contractor license.
- The subcontractor is not required to have an MHIC license as long as they are working for a licensed contractor. (Correct answer)
- The subcontractor must obtain a special 'subcontractor-only' license from the MHIC.
- The subcontractor only needs a license if the value of their work exceeds $5,000.
Correct answer: The subcontractor is not required to have an MHIC license as long as they are working for a licensed contractor.
As of July 1, 2016, Maryland eliminated the separate subcontractor license category. Subcontractors may work without a specific MHIC license, provided they are performing work for a contractor who holds a valid MHIC license. The licensed prime contractor is ultimately responsible for the project.
Question 6: Regarding labor practices, if a contractor's employee works on a state-funded public works project, what is a key requirement under Maryland's Prevailing Wage Law?
- Employees must be paid the federal minimum wage.
- Overtime must be paid for any hours worked over 40 in a week.
- Employees must be paid overtime for hours exceeding 10 in a single day. (Correct answer)
- The contractor can set any wage rate as long as it's in the employment agreement.
Correct answer: Employees must be paid overtime for hours exceeding 10 in a single day.
Maryland's Prevailing Wage Law has specific overtime rules for public works contracts. It requires that employees be paid overtime for any hours worked in excess of 10 hours in a single calendar day, as well as for work on Sundays or legal holidays.
MHIC - Maryland Home Improvement Contractor Business and Labor Practices Questions and Answers 1
A licensed Maryland Home Improvement salesperson may represent a maximum of how many licensed contractors at any given time?