Maryland Home Improvement Contractor (MHIC)
exam Practice Questions WITH CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A
|INSTANT DOWNLOAD PDF
1. Which of the following is required before a Maryland home
improvement contractor can start a project?
A. A signed contract with the homeowner
B. A valid MHIC license
C. A building permit, if applicable
D. Proof of liability insurance
Answer: B. A valid MHIC license
Rationale: In Maryland, contractors must hold a valid MHIC
license before performing any home improvement work to
ensure compliance with state regulations.
2. What is the maximum period a contractor has to return a
homeowner’s deposit exceeding $500 before it is considered
unlawful?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
Answer: B. 10 days
Rationale: Maryland law requires contractors to return any
,deposit over $500 within 10 days if the contract is canceled or
the work is not initiated.
3. Which of the following must a written contract for home
improvement work include in Maryland?
A. The contractor’s license number
B. The project start and completion dates
C. A detailed description of work to be performed
D. Total contract price
Answer: A, B, C, D
Rationale: Maryland home improvement contracts must include
all these elements to protect both parties and ensure clarity of
obligations.
4. A homeowner wants to cancel a home improvement
contract. Within how many days can they do so under
Maryland law for contracts signed at home?
A. 1 day
B. 3 days
C. 5 days
D. 10 days
Answer: C. 5 days
Rationale: Maryland law provides a 5-day “cooling-off” period
for home improvement contracts signed at the homeowner’s
residence.
5. If a contractor fails to complete work satisfactorily, the
homeowner can:
A. Stop payment immediately
,B. File a complaint with the MHIC board
C. Hire another contractor to finish the job without notice
D. Sue for damages in civil court
Answer: B and D
Rationale: The homeowner can report the violation to the MHIC
and/or seek civil remedies, but must follow legal procedures for
payment disputes.
6. Which insurance is mandatory for Maryland home
improvement contractors?
A. Workers’ compensation insurance
B. General liability insurance
C. Auto insurance
D. Homeowner’s insurance
Answer: B. General liability insurance
Rationale: MHIC law requires contractors to carry general
liability insurance to protect against property damage or
personal injury claims.
7. What is the penalty for performing home improvement
work in Maryland without a license?
A. $100 fine per day
B. Misdemeanor, fines, and potential jail time
C. Suspension of business operations only
D. No penalty if work is minor
Answer: B. Misdemeanor, fines, and potential jail time
Rationale: Operating without an MHIC license is a criminal
offense in Maryland and can result in fines and jail.
, 8. Maryland law requires contractors to provide homeowners
with:
A. A written contract
B. License number
C. Notice of the right to cancel
D. A warranty for all work performed
Answer: A, B, C
Rationale: Contractors must provide the contract, license
information, and cancellation notice, but not all work
automatically requires a warranty.
9. How long must a Maryland contractor keep records of
home improvement contracts?
A. 1 year
B. 3 years
C. 5 years
D. 7 years
Answer: B. 3 years
Rationale: Maryland law mandates contractors to retain
records of contracts, payments, and related documentation for
3 years for auditing and dispute purposes.
10. Which of the following is considered deceptive advertising
for a Maryland home improvement contractor?
A. Advertising services without a license number
B. Misrepresenting the cost of materials
C. Claiming unrealistic completion times
D. Offering discounts for referrals
exam Practice Questions WITH CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES 2026 Q&A
|INSTANT DOWNLOAD PDF
1. Which of the following is required before a Maryland home
improvement contractor can start a project?
A. A signed contract with the homeowner
B. A valid MHIC license
C. A building permit, if applicable
D. Proof of liability insurance
Answer: B. A valid MHIC license
Rationale: In Maryland, contractors must hold a valid MHIC
license before performing any home improvement work to
ensure compliance with state regulations.
2. What is the maximum period a contractor has to return a
homeowner’s deposit exceeding $500 before it is considered
unlawful?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
Answer: B. 10 days
Rationale: Maryland law requires contractors to return any
,deposit over $500 within 10 days if the contract is canceled or
the work is not initiated.
3. Which of the following must a written contract for home
improvement work include in Maryland?
A. The contractor’s license number
B. The project start and completion dates
C. A detailed description of work to be performed
D. Total contract price
Answer: A, B, C, D
Rationale: Maryland home improvement contracts must include
all these elements to protect both parties and ensure clarity of
obligations.
4. A homeowner wants to cancel a home improvement
contract. Within how many days can they do so under
Maryland law for contracts signed at home?
A. 1 day
B. 3 days
C. 5 days
D. 10 days
Answer: C. 5 days
Rationale: Maryland law provides a 5-day “cooling-off” period
for home improvement contracts signed at the homeowner’s
residence.
5. If a contractor fails to complete work satisfactorily, the
homeowner can:
A. Stop payment immediately
,B. File a complaint with the MHIC board
C. Hire another contractor to finish the job without notice
D. Sue for damages in civil court
Answer: B and D
Rationale: The homeowner can report the violation to the MHIC
and/or seek civil remedies, but must follow legal procedures for
payment disputes.
6. Which insurance is mandatory for Maryland home
improvement contractors?
A. Workers’ compensation insurance
B. General liability insurance
C. Auto insurance
D. Homeowner’s insurance
Answer: B. General liability insurance
Rationale: MHIC law requires contractors to carry general
liability insurance to protect against property damage or
personal injury claims.
7. What is the penalty for performing home improvement
work in Maryland without a license?
A. $100 fine per day
B. Misdemeanor, fines, and potential jail time
C. Suspension of business operations only
D. No penalty if work is minor
Answer: B. Misdemeanor, fines, and potential jail time
Rationale: Operating without an MHIC license is a criminal
offense in Maryland and can result in fines and jail.
, 8. Maryland law requires contractors to provide homeowners
with:
A. A written contract
B. License number
C. Notice of the right to cancel
D. A warranty for all work performed
Answer: A, B, C
Rationale: Contractors must provide the contract, license
information, and cancellation notice, but not all work
automatically requires a warranty.
9. How long must a Maryland contractor keep records of
home improvement contracts?
A. 1 year
B. 3 years
C. 5 years
D. 7 years
Answer: B. 3 years
Rationale: Maryland law mandates contractors to retain
records of contracts, payments, and related documentation for
3 years for auditing and dispute purposes.
10. Which of the following is considered deceptive advertising
for a Maryland home improvement contractor?
A. Advertising services without a license number
B. Misrepresenting the cost of materials
C. Claiming unrealistic completion times
D. Offering discounts for referrals
