MHIC | Maryland Home Improvement Commission (Latest
Exam) | Questions and Correct Answers | Verified Answers |
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2026-2027 Exams Includes Frequently Tested Questions
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1. What is Actual Loss? - Correct Answer: Actual Loss means the cost to
correct or complete a home improvement that is inadequate,
unworkmanlike or incomplete.
2. How much can homeowners recover? - Correct Answer: Homeowners
may recover up to $20,000 per contract, though they are not eligible to
recover more than the amount paid to the contractor against whom the
claim is based. Certain costs like: legal fees, interest, consequential damages
are not covered by the Fund.
3. What is the max amount that can be awarded from the Guaranty Fund for
the acts or omissions of a contractor? - Correct Answer: $100,000
4. How is the Fund maintained? - Correct Answer: $100 by each contractor
at the time of applying for a license. The Commission may also assess each
contractor a fee of $50 if the Fund falls below $250,000
,5. How many days does the contractor have to respond to claims from a
homeowner once it has been received by the commission? - Correct
Answer: Once the Commission receives a claim, it send a copy to the
contractor who has 10 days to respond back to the Commission.
6. Who is not eligible to collect from the Fund? - Correct Answer: Spouse,
relative, or employee of the contractor, or an officer of the corporation.
Similarly, an owner may only receive compensation if she/he resides in the
house where the work was performed or does not own more than 3
residences.
7. What happens to the license of the contractor after a claim has been paid? -
Correct Answer: The licensed is suspended, unless the commission
determines that contractor did not know the wrongful conduct or it could
had not been avoided
8. What is required in a home Improvement contract? - Correct Answer:
Date
Contractors name, address, and MHIC number
Consumer Notice
Dates
Description of work
Deposit and Payment information
9. What is Consumer Notice? - Correct Answer: It provides phone of the
Commission and states that "each contractor and subcontractor must hold
a current MHIC license and anyone can ask MHIC about a contractor"
,10.The contract also needs to inform homeowners of the following:
1) Formal mediation disputes between homeowners and contractors
are available through the Commission
2) The Commission administers the Fund which can compensate owners
for certain actual losses caused by acts or omissions of licensed
contractors
3) The homeowner may request that the contractor purchase a
performance bond for additional protections against losses not
covered by the Fund
11.What is the maximum a contractor may ask for downpayment? -
Correct Answer: 1/3 of the contract
12.How long does a homeowner have to rescind a contract? - Correct
Answer: 3 days after signing, and notification must be in writing.
13.Who can make changes to a home improvement contract? - Correct
Answer: Only the contractor is authorized to make changes for a
homeowner. The commission recommends changes to be in writing.
14.True or False: Before the performance of a home improvement coontract,
the owner shall be given a copy of the home improvement contract signed
by the contractor - Correct Answer: TRUE
15.What is cancellation under Door to Door Sales Act - Correct Answer:
The Door to Door sales act gives consumers certain rights, including the
right to cancel the contract without any penalty or obligation, by sending a
notice of cancellation to the seller by midnight of the fifth business day
, following the sale, or the seventh business day of the buyer is at least 65
years old.
16.If the homeowner cancels the contract, contractor must return the deposit
within 10 business days following receipt of cancellation.
17.What is the NOTICE OF CANCELLATION requirement for Door to Door Sales
Act? - Correct Answer: Each contract must include Notice of
Cancellation attached to the contract and contractor must obtain a signed
written acknowledgement that the buyer has been informed of his/her
cancellation rights. The information must include where to send the
cancellation notice, by which date. If this information is not included or
given to homeowner, the buyer may cancel in any manner and by any
means.
18.Notice of cancellation - good available to buyer - Correct Answer: If
goods are made available to the contractor and the contractor does not pick
them up within 20 days of the date of your notice, you may dispose of the
goods without any further obligation
19.When is a Home Improvement Job NOT covered? - Correct Answer: The
Door to Door sales act does NOT cover a home improvement project made:
1) pursuant to prior negotiations at a retail business with a fixed
permanent location where consumer goods are exhibited or
consumer services are offered for sale on a continuing bases
2) In which the buyer has initiated contact and the goods or services are
needed to meet a bona fide personal emergency of the buyer and the
buyer gives the seller a separate dated and signed personal
statement in the buyers handwriting that describes the situation that
required immediate remedy and expressly acknowledges and waives
Exam) | Questions and Correct Answers | Verified Answers |
Just Released Comprehensive Resource To Help You Ace
2026-2027 Exams Includes Frequently Tested Questions
With ELABORATED 100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!! Current Update!!
Instant Download Pdf
1. What is Actual Loss? - Correct Answer: Actual Loss means the cost to
correct or complete a home improvement that is inadequate,
unworkmanlike or incomplete.
2. How much can homeowners recover? - Correct Answer: Homeowners
may recover up to $20,000 per contract, though they are not eligible to
recover more than the amount paid to the contractor against whom the
claim is based. Certain costs like: legal fees, interest, consequential damages
are not covered by the Fund.
3. What is the max amount that can be awarded from the Guaranty Fund for
the acts or omissions of a contractor? - Correct Answer: $100,000
4. How is the Fund maintained? - Correct Answer: $100 by each contractor
at the time of applying for a license. The Commission may also assess each
contractor a fee of $50 if the Fund falls below $250,000
,5. How many days does the contractor have to respond to claims from a
homeowner once it has been received by the commission? - Correct
Answer: Once the Commission receives a claim, it send a copy to the
contractor who has 10 days to respond back to the Commission.
6. Who is not eligible to collect from the Fund? - Correct Answer: Spouse,
relative, or employee of the contractor, or an officer of the corporation.
Similarly, an owner may only receive compensation if she/he resides in the
house where the work was performed or does not own more than 3
residences.
7. What happens to the license of the contractor after a claim has been paid? -
Correct Answer: The licensed is suspended, unless the commission
determines that contractor did not know the wrongful conduct or it could
had not been avoided
8. What is required in a home Improvement contract? - Correct Answer:
Date
Contractors name, address, and MHIC number
Consumer Notice
Dates
Description of work
Deposit and Payment information
9. What is Consumer Notice? - Correct Answer: It provides phone of the
Commission and states that "each contractor and subcontractor must hold
a current MHIC license and anyone can ask MHIC about a contractor"
,10.The contract also needs to inform homeowners of the following:
1) Formal mediation disputes between homeowners and contractors
are available through the Commission
2) The Commission administers the Fund which can compensate owners
for certain actual losses caused by acts or omissions of licensed
contractors
3) The homeowner may request that the contractor purchase a
performance bond for additional protections against losses not
covered by the Fund
11.What is the maximum a contractor may ask for downpayment? -
Correct Answer: 1/3 of the contract
12.How long does a homeowner have to rescind a contract? - Correct
Answer: 3 days after signing, and notification must be in writing.
13.Who can make changes to a home improvement contract? - Correct
Answer: Only the contractor is authorized to make changes for a
homeowner. The commission recommends changes to be in writing.
14.True or False: Before the performance of a home improvement coontract,
the owner shall be given a copy of the home improvement contract signed
by the contractor - Correct Answer: TRUE
15.What is cancellation under Door to Door Sales Act - Correct Answer:
The Door to Door sales act gives consumers certain rights, including the
right to cancel the contract without any penalty or obligation, by sending a
notice of cancellation to the seller by midnight of the fifth business day
, following the sale, or the seventh business day of the buyer is at least 65
years old.
16.If the homeowner cancels the contract, contractor must return the deposit
within 10 business days following receipt of cancellation.
17.What is the NOTICE OF CANCELLATION requirement for Door to Door Sales
Act? - Correct Answer: Each contract must include Notice of
Cancellation attached to the contract and contractor must obtain a signed
written acknowledgement that the buyer has been informed of his/her
cancellation rights. The information must include where to send the
cancellation notice, by which date. If this information is not included or
given to homeowner, the buyer may cancel in any manner and by any
means.
18.Notice of cancellation - good available to buyer - Correct Answer: If
goods are made available to the contractor and the contractor does not pick
them up within 20 days of the date of your notice, you may dispose of the
goods without any further obligation
19.When is a Home Improvement Job NOT covered? - Correct Answer: The
Door to Door sales act does NOT cover a home improvement project made:
1) pursuant to prior negotiations at a retail business with a fixed
permanent location where consumer goods are exhibited or
consumer services are offered for sale on a continuing bases
2) In which the buyer has initiated contact and the goods or services are
needed to meet a bona fide personal emergency of the buyer and the
buyer gives the seller a separate dated and signed personal
statement in the buyers handwriting that describes the situation that
required immediate remedy and expressly acknowledges and waives
