Maryland home improvement contractors and salespersons must be licensed by the Maryland Home Improvement Commission (MHIC). Only a licensed contractor may enter into a contract with a homeowner for home improvement work. Search the official public query, and match the name and license number to your contract.

Confirm that the contractor maintains general liability insurance of at least $500,000. A truck with a logo is not proof of a current license.

Who needs an MHIC license, and how to verify it

MHIC licenses and regulates home improvement contractors and salespersons. Home improvement work includes alteration, remodeling, repair, or replacement of a building or part of a building used as a residence, and work done on individual condominium units. It does not include work done on commonly owned areas of condominiums or on buildings that contain four or more single-family units. Subcontractor licensing as a separate category was eliminated in 2016; subcontractors may work without that former license when performing home improvements for an MHIC-licensed contractor, but only the licensed contractor may contract with the homeowner.

Look up the company in the MHIC public query before you sign. Search by name, trade name, or license number, and confirm that the license is current. The contract must contain the contractor's name, address, telephone number, and MHIC license number, and the name and license number of any salesperson who solicited or sold the work. Every contract must also contain a notice that each contractor must hold a current MHIC license and that anyone can ask MHIC about a contractor. MHIC's address for that notice is 100 S. Charles St., Tower 1, 3rd floor, Baltimore, MD 21201. The telephone numbers are 410-230-6231 and 1-888-218-5925.

Effective June 1, 2024, Business Regulation Article § 8-302.1 requires Maryland home improvement contractors to maintain general liability insurance of at least $500,000. Ask for a current certificate and match the named insured to the license. An MHIC license does not authorize the contractor to act as a public adjuster on your insurance claim. The contractor may prepare a repair estimate and answer the insurer's questions about that estimate, but may not prepare, negotiate, or advise on the insurance claim unless licensed by the Maryland Insurance Administration as a public adjuster.

Local building permits and inspections are a separate step. A state license does not replace a county or city permit. Call the building department where the work will be done.

Complaints, the Guaranty Fund, and deposits

If a problem arises, start with the contractor in writing. Then file a complaint with MHIC, which investigates alleged violations of the home improvement law. If the contractor is licensed, or was licensed when the contract was signed, you may later be eligible to file a Guaranty Fund claim for actual loss from unworkmanlike, incorrect, incomplete, or abandoned work. The Fund applies only to work done by licensed contractors. The maximum recovery is the amount you paid the contractor, up to $30,000 per claimant. If approved claims against one contractor exceed $250,000, awards are prorated. A claim generally must be brought within three years after you discovered, or should have discovered, the loss. File the complaint first; claim forms are issued after investigation and are not posted online. The Fund does not cover attorney's fees, consequential damages, or money paid to an unlicensed contractor to fix the work.

The Commission is at 100 S. Charles Street, Tower I, Baltimore, MD 21201, email DLOPLMHIC-LABOR@maryland.gov. A contractor cannot accept any payment until the contract is signed, and cannot receive a deposit of more than one-third of the contract price at or before execution, under Business Regulation Article § 8-617. Use a written MHIC-compliant contract, and calendar any door-to-door or mortgage-secured cancellation rights that apply.

Get more than one written bid, and compare the scope, materials, start date, and payment schedule, not only the bottom line. Ask whether subcontractors will be used and confirm that the company on the bid is the company on the MHIC license. Keep cancelled checks or card statements with the contract so you can document what was paid if you later file a complaint or a Guaranty Fund claim. If the job requires a permit, do not let work get ahead of the inspection schedule.

FAQ

How do I check an MHIC license?

Use the official Home Improvement public query on the Department of Labor website, and match the license number and legal name to the contract.

Can an unlicensed company sign the home improvement contract if a licensed contractor will do the work?

No. The law continues to provide that only MHIC-licensed contractors may enter into contracts with homeowners to perform home improvement work.

How much can the Guaranty Fund pay?

The maximum is $30,000 per claimant, or the amount paid to the contractor, whichever is less. Total payments for one contractor are capped at $250,000 and may be prorated.

How large a deposit may the contractor take?

The contractor may not accept any payment before the contract is signed, and may not receive a deposit of more than one-third of the contract price at or before execution.

Next step

Look up the contractor in the MHIC public query, ask for a current $500,000 liability certificate, and talk with a licensed local agent if you also want to review insurance and contract terms before work starts.

Sources: Maryland Home Improvement Commission; MHIC public query; MHIC, For Consumers; MHIC Guaranty Fund FAQs; Business Regulation Article § 8-617.

A Maryland home improvement contract must be in writing and signed before any payment is made. The contractor may not take a deposit of more than one-third of the contract price. Covered door-to-door sales generally may be canceled by the fifth business day, or the seventh if you are at least 65.

If payment is secured by a mortgage or lien on the home, the contract must give a three-business-day rescission right.

What the written contract must include

Business Regulation Article § 8-501 requires each home improvement contract to be in writing and legible, to describe clearly each document it incorporates, and to be signed by each party. Before work begins, the owner must receive a copy signed by the contractor. The contract must contain the contractor's name, address, telephone number, and license number; the name and license number of each salesperson who solicited or sold the work; approximate start and substantial-completion dates; a description of the work and the materials; the agreed price; payment and collateral details the statute lists; and a notice with MHIC's telephone number and website stating that each contractor must be licensed and that anyone may ask the Commission about a contractor. MHIC regulations also require a notice that the Guaranty Fund may compensate homeowners for certain actual losses caused by licensed contractors, and that a homeowner may buy a performance bond for losses the Fund does not cover.

Section 8-617 adds the payment rules: no one may demand or receive any payment before the contract is signed, and no one may receive a deposit of more than one-third of the contract price before or at the time the contract is executed. Beyond that initial deposit, the payment schedule is a matter of negotiation, including a smaller deposit. Do not pay on a blank or unsigned form.

If payment will be secured by an interest in residential real estate, the first page must contain, in at least 10-point bold type, a notice that the contract creates a mortgage or lien, that you may lose the property if you fail to pay, that you have the right to consult an attorney, and that you have the right to rescind within three business days after you sign by notifying the contractor in writing. The homeowner must independently initial that notice.

If the contract has a mandatory arbitration clause, the clause must name the arbitration organization, state any mandatory fees, say whether the findings are binding, and disclose that a Guaranty Fund claim will be stayed until the arbitration is finished. The parties must initial and date the contract next to that clause. MHIC cannot process a Fund recovery until arbitration has occurred or has been waived, though you should still file a timely claim within three years.

Door-to-door cancellation, and how to use it

Many home improvement contracts are also covered by the Maryland Door-to-Door Sales Act, Commercial Law Title 14, Subtitle 3. The Act covers sales in which the seller personally solicits the sale, including in response to an invitation, and the buyer's agreement is made at a place other than the seller's place of business. For a home improvement contract, § 14-302.1 allows cancellation prior to midnight of the fifth business day after the transaction, or midnight of the seventh business day if the buyer is at least 65. A separate Notice of Cancellation form must be attached, and the seller must obtain a signed acknowledgment of the oral notice of that right. The contract must be in the same language as the oral sales presentation. The Attorney General's and MHIC's consumer pages state that if you cancel, the seller must return your deposit within 10 business days after receipt of the cancellation. If the contract lacks the required Notice of Cancellation, you may cancel by notifying the seller in any manner of your intention to cancel.

Give written notice in a way you can prove. Keep the signed contract, the cancellation form, and proof of mailing or email. Local permits and an MHIC license check remain separate steps even after a contract is signed or canceled. If a contractor refuses a written contract, demands more than one-third as a deposit, or ignores a timely cancellation, write to the company and then to MHIC at 410-230-6231, 1-888-218-5925, or DLOPLMHIC-LABOR@maryland.gov, and consider the Attorney General's Consumer Protection Division.

FAQ

When can the contractor take a deposit?

Only after the contract is signed, and not more than one-third of the contract price at or before execution, under § 8-617.

How long is the door-to-door cancellation period?

For a covered home improvement contract, you may cancel before midnight of the fifth business day, or the seventh business day if you are at least 65, after the date of the transaction.

What if the contract is secured by a lien on my house?

The first page must give a three-business-day written rescission right, in the statutory bold-type notice, and you must initial that notice.

Does a missing cancellation form take away my right to cancel a door-to-door sale?

MHIC's Door-to-Door Sales Act page states that if the contract does not contain a Notice of Cancellation, the buyer may cancel by notifying the seller in any manner and by any means of the intention to cancel.

Next step

Insist on a completed, signed MHIC-compliant contract before any payment, calendar the five- or seven-business-day door-to-door window or the three-business-day lien-secured window if either applies, and contact MHIC or a licensed local agent if a contractor will not follow the statute.

Sources: Business Regulation Article § 8-501; Business Regulation Article § 8-617; MHIC, Maryland Home Improvement Contracts; MHIC, Door-to-Door Sales Act; Commercial Law § 14-302.1.