MHIC - Maryland Home Improvement Contractor MD Home Improvement Law Questions and Answers 1 — Questions and Answers
Question 1: A licensed Maryland Home Improvement contractor's advertisement must include which of the following pieces of information?
- The contractor's general liability insurance carrier.
- A statement that all estimates are binding for 30 days.
- The contractor's MHIC license number. (Correct answer)
- The complete home addresses of the business owners.
Correct answer: The contractor's MHIC license number.
According to the Maryland Home Improvement Law, all advertisements for home improvement services must conspicuously include the contractor's MHIC license number. This allows consumers to easily verify the contractor's license status with the Commission.
Question 2: A homeowner signs a home improvement contract at their kitchen table with a licensed salesperson. According to the Maryland Door-to-Door Sales Act, what is the standard timeframe the homeowner has to cancel the contract without penalty?
- 24 hours after signing the contract.
- Until midnight of the fifth business day after the transaction. (Correct answer)
- 10 business days after the work has begun.
- There is no right to cancel once the contract is signed.
Correct answer: Until midnight of the fifth business day after the transaction.
The Maryland Door-to-Door Sales Act, which covers many home improvement contracts, gives consumers the right to cancel a contract without penalty by midnight of the fifth business day after the date of the transaction. For buyers aged 65 or older, this period is extended to the seventh business day.
Question 3: Under Maryland Home Improvement Law, what is the maximum deposit a contractor can legally require a homeowner to pay before work begins?
- 50% of the total contract price.
- An amount equal to the cost of materials.
- There is no legal limit on the deposit amount.
- 1/3 of the total contract price. (Correct answer)
Correct answer: 1/3 of the total contract price.
Maryland law explicitly prohibits a home improvement contractor from accepting more than one-third (1/3) of the total contract price as a deposit or down payment before or at the time of signing the contract.
Question 4: A homeowner discovers faulty workmanship from a project completed by a licensed MHIC contractor. To file a claim with the MHIC Guaranty Fund for potential compensation, the claim must be filed within what period?
- One year from the contract completion date.
- Three years from the date the loss or damage was discovered. (Correct answer)
- Five years from the date the contract was signed.
- There is no time limit for filing a claim against the Guaranty Fund.
Correct answer: Three years from the date the loss or damage was discovered.
A claim against the MHIC Guaranty Fund must be filed within three years after the homeowner discovered, or should have reasonably discovered, the loss or damage caused by the licensed contractor.
Question 5: Which of the following is NOT a required element of a written Maryland Home Improvement contract?
- The approximate start and completion dates.
- The contractor's MHIC license number.
- A mandatory binding arbitration clause. (Correct answer)
- A description of the work to be performed and materials to be used.
Correct answer: A mandatory binding arbitration clause.
While a contract can contain a mandatory arbitration clause, it is not a required element. If one is included, it must be clearly disclosed and initialed by both parties. The other items—approximate dates, the MHIC license number, and a clear scope of work—are all mandatory components of a valid contract.
Question 6: A licensed contractor must notify the MHIC of any change in their business address or trade name within what timeframe?
- At the next license renewal period.
- 30 days.
- 10 days. (Correct answer)
- 90 days.
Correct answer: 10 days.
Maryland Home Improvement Law requires licensees to notify the Commission in writing, by certified mail, within 10 days of any change of control in ownership, management, address, or trade name.
MHIC - Maryland Home Improvement Contractor MD Home Improvement Law Questions and Answers 1
A licensed Maryland Home Improvement contractor's advertisement must include which of the following pieces of information?