Maryland Home Improvement Contractor Licensing

The Home Improvement Law defines it as the addition to, or alteration, conversion, improvement, modernization, remodeling, repair or replacement of a building or part of a building used or designed to be used as a residence or dwelling place — or a structure adjacent to that building, or an improvement to land adjacent to it.

MHIC publishes a work-type list, which is explicitly not all-inclusive. A sample of what it covers:

Note one narrow but frequently misread item: floor coverings are covered work, with carpet excepted. That is a specific carve-out for carpet, not a general exemption for flooring.

Source: MHIC, What is Home Improvement?

The boundaries are set by property type, and the condominium rule is the one contractors most often get wrong.

• Covered — homes and apartment buildings containing three or fewer units.
• Covered — work done on individual condominium units, even in a large building.
• Not covered — commonly owned areas of condominiums.
• Not covered — buildings containing four or more single family units.
• Not covered — new home construction, which is a separate registration.

So remodeling the interior of a unit in a high-rise is home improvement and requires the license. Repairing that same building's shared lobby, roof, or corridors is not covered by MHIC.

Be careful with the common shorthand "1–2 family homes." MHIC's own wording is three or fewer units.

Source: MHIC; MHIC Licensing FAQs for Applicants.

No. Maryland sets no minimum project value. A $500 repair carries the same licensing requirement as a $50,000 renovation.

This is the sharpest difference from Virginia, which begins licensure above $1,000 and then tiers upward through Classes C, B and A. Maryland has neither the floor nor the tiers — the only question is whether the work is home improvement on a covered property.

There is one significant exemption, but it turns on who you work for rather than job size. See the subcontractor question below.

Source: Md. Business Regulation § 8-601; MHIC.

If you contract with the homeowner, you need the license — regardless of who performs the work. Your subcontractors working under you generally do not.

Maryland eliminated the subcontractor license category effective July 1, 2016. Application, examination and renewal requirements for that category were removed entirely. Home improvement subcontractors may work without a license when performing home improvements for an MHIC-licensed contractor.

What has not changed: only MHIC-licensed contractors may enter into contracts with homeowners. A subcontractor who signs directly with a homeowner isn't a subcontractor in that transaction — they're an unlicensed contractor.

Individual laborers and employees of a licensed contractor also don't need their own licenses.

The trade-off. The homeowner's contract is with you. You carry the responsibility, the Guaranty Fund exposure, and the liability for work your subs perform. That is the price of being the one who may lawfully sign.

Source: MHIC notice on elimination of the subcontractor licensing category.

Yes. Anyone who solicits or negotiates home improvement contracts with homeowners needs an individual salesperson license, separate from your contractor license.

It carries its own exam of 35 questions, its own $112.50 application fee, and its own $112.50 renewal.

This has a paperwork consequence: if a salesperson solicited or sold the job, that person's name and license number must appear on the contract, and either the salesperson or the contractor must sign it. Omitting that is a contract violation subject to citation.

Laborers, clerical staff and retail clerks don't need salesperson licenses. The trigger is soliciting or negotiating with homeowners.

Source: MHIC Taking the Exam; COMAR 09.08.07.02; MHIC contract requirements.

At least two years of experience in home improvement work, construction, and/or related education. PSI verifies it before you may sit for the exam.

How the two years can be built. Experience as a supervisor, manager, or owner of a business may substitute for one of the two required years of trade experience. Qualifying education also counts, including a registered apprenticeship program, a vocational school whose primary focus is a building trade, or a work-study program whose primary focus is a building trade.

How it's documented. Through the Documentation of Experience form in PSI's Candidate Information Bulletin. Your former employer completes it, has it notarized, and provides specific dates plus an explanation of the duties you performed. All experience must be documented and verifiable.

Applicants whose background doesn't fit neatly into these categories may have their qualifications considered by the Commission individually.

Note there are no experience tiers by work type. It is two years, full stop — Maryland has no categories to vary it by.

Source: MHIC License Categories and Requirements; PSI Candidate Information Bulletin.

Administered by PSI, computer-based, and open book.

What it tests. The exam is based on the laws and regulations relating to operating a home improvement business and selling home improvement work. It does not include a skills-based assessment. It tests regulatory understanding and business management — which is why decades of excellent field work prepare you for very little of it.

Where. PSI test centers in Baltimore, College Park, Salisbury, Frederick, Hagerstown, Lanham and Crofton, Monday through Friday by appointment.

Reference material. Content is based on the Contractors Guide to Business, Law and Project Management, Maryland Home Improvement Commission edition. The edition in use changes periodically — check the current PSI bulletin for which applies and what you may bring in.

If you fail. You must wait 30 days before reapplying after a first failure, and 60 days for any subsequent request, paying the fee each time.

Your passing score is good for two years. Apply for licensure within that window or the score expires and the exam must be retaken.

Source: MHIC Taking the Exam; PSI Candidate Information Bulletin.

The requirement is proof of financial solvency. A surety bond is not required of every applicant — it's a fallback if you don't meet the Commission's guidelines.

The primary route. Submit a Contractor's Personal Financial Statement. The Commission assesses solvency based on the scope and size of your business in relation to total assets, total liabilities, a full credit report, and net worth. If assets are co-owned, a Co-Owner's Signature form is also required.

If you don't meet the guidelines, two options, both with forms published by MHIC:

• Obtain an indemnitor — effectively a co-signer standing behind you.
• Purchase a surety bond — MHIC publishes bond forms at $30,000 and $100,000.

Treat figures you find elsewhere with care. There is no $50,000 MHIC bond, and there is no option to contribute a lump sum to the Guaranty Fund in place of a bond. The Guaranty Fund assessment is a separate, mandatory and much smaller charge every licensee pays regardless of solvency.

Source: MHIC Apply for an Original License; MHIC License Categories and Requirements.

Effective June 1, 2024, all Maryland home improvement contractors must maintain general liability insurance of at least $500,000. This one genuinely is mandatory.

The requirement sits in § 8-302.1 of the Business Regulation Article. Proof is filed with your license application, and coverage must remain in force continuously for the life of the license — not merely on the day you apply.

If coverage is going to lapse or be cancelled, notify MHIC 10 days before it ends. The obligation runs ahead of the lapse, not after it. Replace the policy before the current one expires wherever possible, and don't perform work during any uninsured period.

Set a calendar reminder well ahead of renewal. Insurers non-renew and cancel for administrative reasons, and an unintended gap counts the same as a deliberate one.

Worth noting for contractors working both states: Virginia's Board requires no contractor liability insurance at all. Maryland does. Don't carry the Virginia assumption across the line.

Source: MHIC Notice of New General Liability Insurance Requirement; Md. Business Regulation § 8-302.1.

A consumer compensation fund supported by licensed contractors, reimbursing homeowners for actual monetary losses caused by poor workmanship or failure to perform a home improvement contract.

What it pays. The maximum a homeowner may recover is the amount they paid the contractor, up to $30,000. If total claims against a single contractor exceed $250,000, each award is pro-rated based on the total awarded to each claimant.

Who it protects. Only homeowners with claims against MHIC-licensed contractors. Work by an unlicensed contractor carries no Fund coverage — which is a persuasive reason homeowners check license numbers before signing, and a fair one for you to raise when you're being compared on price.

The Fund protects your customer, not you. Where it pays out on your account, you remain responsible to the Fund.

Source: MHIC; Md. Business Regulation § 8-409(b).

Application and licensing fees increased effective August 1, 2024. Current schedule per COMAR:

Note the per-place-of-business structure — a contractor operating from more than one location pays the application and renewal fee for each.

Licenses run two years. Renewal requires the fee, the Guaranty Fund assessment, and continued compliance including insurance in force. There is no continuing education requirement. If you're pausing rather than closing, inactive status is available at reduced fees and is a better option than letting a license lapse.

Source: COMAR 09.08.07.02; MHIC Renew Your License.

Unlicensed home improvement contracting in Maryland is a criminal misdemeanor, and the penalties escalate on a second conviction.

Under § 8-601 of the Business Regulation Article, a person may not act or offer to act as a contractor without a contractor license, and may not sell or offer to sell a home improvement without a contractor or salesperson license.

Either, or both, may be imposed.

You generally cannot sue to be paid. Maryland courts have consistently declined to enforce home improvement contracts made by unlicensed contractors, on the reasoning that the licensing requirement exists to protect the public. Courts have denied an unlicensed contractor a mechanic's lien on the improved property and denied recovery on unjust enrichment. You can finish the work properly and have no legal route to collect.

Restitution is a live risk. A Maryland appellate court has held a building owner entitled to restitution for damage caused by a contractor who pleaded guilty under § 8-601 — so a criminal case can carry a payback obligation beyond the fine.

Source: Md. Business Regulation § 8-601; Maryland appellate decisions applying § 8-601 and the Home Improvement Law.

Separate from criminal prosecution, and far more likely to affect a licensee in good standing. Regulations authorize MHIC to issue civil citations of $500 to $5,000 for violations of the contract requirements.

These are administrative. They don't require a prosecution, and they target paperwork that doesn't comply — a missing homeowner notice, a defective arbitration clause, an oversized deposit, payment taken before signatures.

The practical implication is worth sitting with: getting licensed removes your § 8-601 exposure entirely, but does nothing about citations. Those depend on whether your contract template complies. Most contractors give the contract far less attention than the license.

See the full contract requirements →

Source: MHIC Notice to Contractors; COMAR 09.08.

Maryland gives homeowners real recourse against licensed contractors: complaints to the Commission, formal mediation, disciplinary proceedings, and claims against the Guaranty Fund.

That sounds like exposure. It's closer to an asset. Accountability applies to every licensed contractor equally, and it's exactly what you can point to that an unlicensed competitor cannot. You're on a public register, you're verifiable, and there's a process behind you if the customer is unhappy.

Maryland requires you to tell your customer about it. Every home improvement contract must contain a notice stating that formal mediation is available through the Commission, that the Commission administers the Guaranty Fund, and that the homeowner may request you purchase a performance bond for protection beyond the Fund — though you are not obligated to pay for one.

Source: MHIC Notice to Contractors; MHIC For Consumers.

Most home improvement contracts are also covered by the Maryland Door-to-Door Sales Act. Where it applies, the homeowner gets a cancellation right on a specific clock.

The contract must state that the buyer may cancel at any time prior to midnight of the fifth business day — or midnight of the seventh business day if the buyer is at least 65 years old — after the date of the transaction.

A separate Notice of Cancellation form must be attached to the contract and filled in with how to cancel and the deadline. The Act also requires the contract to be written in the same language principally used in the oral sales presentation.

Don't confuse this with the three-day right. That is a different rule with a different trigger: contracts secured by an interest in residential real estate require a 10-point bold notice on the first page granting three business days to rescind, independently initialed by the homeowner. A door-to-door sale financed by a lien on the home triggers both.

Source: MHIC Notice to Contractors; Maryland Door-to-Door Sales Act.

Federal EPA requirement, applicable to all Maryland work in pre-1978 residences. MHIC flags it directly on its own definition page.

In each residence built before 1978, the EPA requires anyone performing renovation, repair or painting that disturbs lead-based paint to obtain EPA certification and follow lead-safe work practices. Contractors must:

1. Provide a copy of EPA's lead hazard information pamphlet to the occupants
2. Contain the work area
3. Minimize dust
4. Clean up thoroughly
5. Document compliance

The rule applies to any renovation, demolition, or paint project affecting six square feet of interior space or 20 square feet of exterior space.

This is separate from your MHIC license. Holding one doesn't satisfy the other, and a great deal of Maryland's housing stock predates 1978.

Source: MHIC, What is Home Improvement?; EPA Lead-Safe Renovation, Repair and Painting Program.

Effective June 1, 2024, home improvement contracts for rooftop solar panel installation must include a wildlife barrier — unless the customer waives it after being properly informed.

Under § 8-501, all such contracts must include installation of a barrier meeting industry standards to prevent wildlife intrusion and damage to the solar energy generating system or the underlying roof.

The waiver is available but conditional: the customer must be informed of the cost of the barrier and the risks of not installing one. MHIC recommends that any waiver contract include the barrier's price, an explanation of the risks, and a space for the customer's initials adjacent to that explanation.

If you install rooftop solar, this belongs in your contract template rather than being handled job by job.

Source: MHIC Notice to Contractors That Install Rooftop Solar Panels; Md. Business Regulation § 8-501.

Three boundary questions that come up constantly.

New home construction is not MHIC. Home builders register with the Home Builder Registration Unit of the Maryland Office of the Attorney General — a different agency with different requirements. Phone (410) 576-6573. MHIC governs improvements to existing residences.

An MHIC license does not let you act as a public adjuster. MHIC posts a standing warning about this, and it's a real trap for storm, fire and water damage contractors. You may prepare a repair estimate and answer the insurer's questions about it. You may not prepare the homeowner's insurance claim, negotiate the claim with the insurer, or advise the homeowner on policy coverage. That requires a public adjuster license from the Maryland Insurance Administration.

You don't need a Title 17 business construction license. A contractor holding an MHIC license is not required to hold one for home improvement work on homes and apartment buildings of three or fewer units.

Source: MHIC Important Notice for Licensees; MHIC Licensing FAQs for Applicants; Maryland Insurance Administration advisory.

Four sequential steps, each gating the next. The defining feature is that the exam comes before the license application, not after.

1. Get approved by PSI to sit for the exam. Complete the Examination Registration form and the Documentation of Experience form from PSI's Candidate Information Bulletin and submit them with your fee. PSI verifies your two years of experience and approves you to test. This step is only PSI documentation and registration — business registration, insurance, and financial materials come later, at Step 4.
2. Prepare for the exam. No course is required by the Commission. Most contractors who prepare with structured instruction do so between PSI approval and test day.
3. Pass the PSI exam. 55 questions, two hours, minimum 70% correct, open book. On passing, PSI sends you the MHIC license application package.
4. Submit your application to the Commission. With your experience documentation, financial solvency materials, proof of $500,000 general liability insurance, business registration and trade name documentation, corporate documents if applicable, and fees. The Commission reviews and issues the license if everything is in order.

How long does it take? We can't tell you precisely, and we won't guess. What drives it: how quickly former employers return notarized experience forms; PSI's review turnaround; exam seat availability; whether you pass the first time — a failure carries a mandatory 30-day wait before you can even reapply, and that is the single largest swing factor; and the Commission's review volume at Step 4.

The part you control is completeness. Applications that go in clean move. Applications that generate correspondence stall.

See our step-by-step walkthrough of the MHIC/PSI process →

Source: MHIC Taking the Exam; MHIC Apply for an Original License; PSI Candidate Information Bulletin.

No course is required by the Commission. Whether you want one is a separate question from whether Maryland demands it — and the case rests on how this exam is actually built.

• It doesn't test what you do all day. The exam covers Maryland home improvement law, regulation, and business management, not construction skill. Field experience transfers poorly, which surprises experienced contractors more than anyone.
• Open book is not a substitute for preparation. A candidate opening the reference for the first time on exam day will not find answers fast enough in two hours. Knowing where things are is the skill.
• A failure costs a month minimum. Thirty days before you can reapply, sixty for any attempt after that, plus the fee each time. Unlike Virginia, which has no waiting period at all, Maryland makes a failed attempt genuinely expensive in time.

Our honest answer on whether one class is enough →

Every CEP exam prep course is live and in person. Not hybrid, not recorded, not self-paced, and not over Zoom. That's a deliberate choice about what actually helps someone pass.

What a live classroom does that a video can't:

• Real-time answers. You ask, the instructor addresses your specific confusion on the spot. Rewinding a video replays the same explanation that didn't land the first time.
• Accountability. The class happens at a set time in a set place with or without you.
• Peer environment. You hear other contractors' questions — often the ones you didn't know to ask.
• Instructor judgment. Our instructors have watched a great many contractors sit this exam and know which topics reliably trip people up.
• Small classes, kept intentionally small so questions actually get answered.

Format. The MHIC course is a single 3½-hour session, held at our Tysons Corner training facility in McLean, Virginia. Maryland contractors in the DC metro, Montgomery County and Prince George's County are generally within a straightforward drive. Contractors travel in from Delaware, Pennsylvania and even fly in from other parts of the country for this one session course.

One clarification, since it causes confusion: the only course we deliver remotely is Virginia's mandatory 8-hour pre-license course, which is a DPOR-required business course rather than exam prep. No MHIC exam prep is offered by Zoom.

We've been preparing Maryland and Virginia contractors for licensing exams since 2014. More than 6,500 contractors have passed their exams after training with us, with nearly a 100% pass rate.

• Live, in-person, instructor-led exam prep only. No self-paced video, no hybrid.
• Current Maryland content. MHIC rules change — the June 2024 insurance requirement, the August 2024 fee increase, and the rooftop solar provision being recent examples. Our curriculum tracks what PSI is actually testing.
• Focused curriculum. We don't teach all of Maryland home improvement law. We teach what appears on the exam.
• Small class sizes, kept small on purpose.