1. What is required to obtain a Maryland Home Improvement Contractor
(MHIC) license?
A) Proof of citizenship
B) Proof of liability insurance
C) Proof of financial stability
D) Proof of completion of a construction training course
Answer: B) Proof of liability insurance
Rationale: To obtain a Maryland Home Improvement Contractor license, applicants must show
proof of liability insurance. This ensures that the contractor is protected against claims arising
from work performed under the home improvement contract.
2. What is the maximum penalty for operating without an MHIC license?
A) $1,000
B) $2,500
C) $5,000
D) $10,000
Answer: C) $5,000
Rationale: The Maryland Home Improvement Law allows for fines up to $5,000 for contractors
who operate without a valid MHIC license.
3. What is the minimum required amount of general liability insurance coverage
for an MHIC license holder?
A) $100,000
B) $250,000
C) $500,000
D) $1,000,000
Answer: B) $250,000
Rationale: Maryland law requires a minimum of $250,000 in general liability insurance for
contractors holding an MHIC license.
,4. Which of the following is a prohibited practice under the Maryland Home
Improvement Law?
A) Offering a rebate to customers
B) Charging a higher price after the contract is signed
C) Completing a project ahead of schedule
D) Offering a discount for early payment
Answer: B) Charging a higher price after the contract is signed
Rationale: It is illegal to charge a higher price than agreed upon in the signed contract unless
additional work is requested and documented.
5. How long does a homeowner have to file a complaint against a contractor for
home improvement work that was done improperly?
A) 1 year
B) 2 years
C) 3 years
D) 5 years
Answer: B) 2 years
Rationale: Homeowners have up to two years to file a complaint about home improvement work
that was done improperly, including issues related to the quality of the work or failure to
complete the job as agreed.
6. Who must sign a home improvement contract in Maryland for it to be valid?
A) Only the contractor
B) Only the homeowner
C) Both the contractor and the homeowner
D) No signature is necessary
Answer: C) Both the contractor and the homeowner
Rationale: Both the contractor and the homeowner must sign the contract for it to be legally
binding and valid under Maryland's Home Improvement Law.
, 7. What is the minimum amount of time a home improvement contract must be
in writing?
A) 3 days
B) 5 days
C) 7 days
D) 10 days
Answer: C) 7 days
Rationale: In Maryland, all home improvement contracts over $1,000 must be in writing and
include a seven-day right of rescission period, allowing the homeowner to cancel the contract
within that time.
8. What should a contractor do if they wish to change the scope of work after a
contract is signed?
A) Do the work and inform the homeowner later
B) Provide a written change order and obtain approval from the homeowner
C) Increase the price without informing the homeowner
D) Proceed with the changes without documentation
Answer: B) Provide a written change order and obtain approval from the homeowner
Rationale: Contractors must provide a written change order that the homeowner signs before
proceeding with any changes to the scope of work, which helps avoid misunderstandings or
disputes.
9. Which of the following is a valid reason for the Maryland Home Improvement
Commission (MHIC) to revoke a contractor's license?
A) Failure to complete the project on time
B) Refusing to refund a deposit
C) Failure to maintain adequate insurance
D) Failure to submit a bid proposal
Answer: C) Failure to maintain adequate insurance
Rationale: Failure to maintain the required liability insurance is grounds for revocation of a
contractor’s MHIC license.
(MHIC) license?
A) Proof of citizenship
B) Proof of liability insurance
C) Proof of financial stability
D) Proof of completion of a construction training course
Answer: B) Proof of liability insurance
Rationale: To obtain a Maryland Home Improvement Contractor license, applicants must show
proof of liability insurance. This ensures that the contractor is protected against claims arising
from work performed under the home improvement contract.
2. What is the maximum penalty for operating without an MHIC license?
A) $1,000
B) $2,500
C) $5,000
D) $10,000
Answer: C) $5,000
Rationale: The Maryland Home Improvement Law allows for fines up to $5,000 for contractors
who operate without a valid MHIC license.
3. What is the minimum required amount of general liability insurance coverage
for an MHIC license holder?
A) $100,000
B) $250,000
C) $500,000
D) $1,000,000
Answer: B) $250,000
Rationale: Maryland law requires a minimum of $250,000 in general liability insurance for
contractors holding an MHIC license.
,4. Which of the following is a prohibited practice under the Maryland Home
Improvement Law?
A) Offering a rebate to customers
B) Charging a higher price after the contract is signed
C) Completing a project ahead of schedule
D) Offering a discount for early payment
Answer: B) Charging a higher price after the contract is signed
Rationale: It is illegal to charge a higher price than agreed upon in the signed contract unless
additional work is requested and documented.
5. How long does a homeowner have to file a complaint against a contractor for
home improvement work that was done improperly?
A) 1 year
B) 2 years
C) 3 years
D) 5 years
Answer: B) 2 years
Rationale: Homeowners have up to two years to file a complaint about home improvement work
that was done improperly, including issues related to the quality of the work or failure to
complete the job as agreed.
6. Who must sign a home improvement contract in Maryland for it to be valid?
A) Only the contractor
B) Only the homeowner
C) Both the contractor and the homeowner
D) No signature is necessary
Answer: C) Both the contractor and the homeowner
Rationale: Both the contractor and the homeowner must sign the contract for it to be legally
binding and valid under Maryland's Home Improvement Law.
, 7. What is the minimum amount of time a home improvement contract must be
in writing?
A) 3 days
B) 5 days
C) 7 days
D) 10 days
Answer: C) 7 days
Rationale: In Maryland, all home improvement contracts over $1,000 must be in writing and
include a seven-day right of rescission period, allowing the homeowner to cancel the contract
within that time.
8. What should a contractor do if they wish to change the scope of work after a
contract is signed?
A) Do the work and inform the homeowner later
B) Provide a written change order and obtain approval from the homeowner
C) Increase the price without informing the homeowner
D) Proceed with the changes without documentation
Answer: B) Provide a written change order and obtain approval from the homeowner
Rationale: Contractors must provide a written change order that the homeowner signs before
proceeding with any changes to the scope of work, which helps avoid misunderstandings or
disputes.
9. Which of the following is a valid reason for the Maryland Home Improvement
Commission (MHIC) to revoke a contractor's license?
A) Failure to complete the project on time
B) Refusing to refund a deposit
C) Failure to maintain adequate insurance
D) Failure to submit a bid proposal
Answer: C) Failure to maintain adequate insurance
Rationale: Failure to maintain the required liability insurance is grounds for revocation of a
contractor’s MHIC license.
