Maryland MHIC Contractor Licensing FAQs

Home improvement means the alteration, remodeling, repair or replacement of a building or part of a building used as a residence.

In practice that covers the bulk of residential remodeling work: kitchen and bath remodels, roofing repair and replacement, siding, windows and doors, painting and drywall, flooring, decks and patios, basement finishing, additions and general repairs.

The Commission's own definition draws the boundaries by property type rather than by trade:

• Included — homes and apartment buildings containing three or fewer units.
• Included — work done on individual condominium units, even where the building itself is large.
• Excluded — commonly owned areas of condominiums.
• Excluded — buildings that contain four or more single family units.

The condominium distinction is the one contractors get wrong most often. 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.

Source: Maryland Home Improvement Commission; MHIC Licensing FAQs for Applicants.

No. Maryland sets no minimum project value for home improvement work. A small repair on a covered residential property requires the license just as a full renovation does.

This is a genuine difference from Virginia, which begins licensure at work valued over $1,000 and then tiers upward by class. Maryland has neither the floor nor the tiers.

There is an important exemption, but it is about who you work for, not how small the job is — see the subcontractor question below.

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

Neither. MHIC is limited to improvements to existing residential property, and Maryland does not issue a statewide commercial general contractor license at all.

Commercial work. Office buildings, retail space, and other commercial property fall outside MHIC entirely. Requirements are handled at the county and municipal level, so the answer depends on where the work is.

New home construction. Building new homes is a separate regulatory track. New home builders register with the Home Builder Registration Unit administered through the Maryland Attorney General's Office — a different agency, different requirements, different fees. MHIC governs improvements to existing residences.

A contractor who does both needs both credentials. Holding one does not imply the other.

Source: MHIC; Maryland Attorney General, Home Builder Registration Unit.

No, and MHIC posts a standing warning about this. An MHIC license does not authorize you to act as a public adjuster.

The line is narrow and worth memorizing if you do storm, fire, or water damage work:

• You may prepare an estimate for repair of damage caused by fire, storm, or flood.
• You may answer questions the insurance company has about your estimate.
• You may not prepare the insurance claim for the homeowner.
• You may not negotiate the claim with the insurance company.
• You may not advise the homeowner on what their policy covers.

Acting as a public adjuster on behalf of a property owner in Maryland requires a separate license from the Maryland Insurance Administration. Contractors who market themselves as handling the insurance side of a claim are frequently over the line without realizing it.

Source: MHIC Important Notice for Licensees; Maryland Insurance Administration advisory for home improvement contractors.

Not if they are working for you. Maryland eliminated the subcontractor license category effective July 1, 2016 — application, examination, and renewal requirements were all removed.

Home improvement subcontractors may work without a license when performing home improvements for an MHIC-licensed contractor. That is the whole of the exemption, and it turns on who holds the contract.

What has not changed: only MHIC-licensed contractors may enter into contracts with homeowners to perform home improvement work. A subcontractor who signs a contract directly with a homeowner is not a subcontractor in that transaction — they are an unlicensed contractor, with the exposure that carries.

Individual laborers and employees of a licensed contractor also do not need their own licenses.

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

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

It comes with its own requirements:

• Its own exam — 35 questions, administered by PSI
• Its own application fee of $112.50, and its own renewal fee of $112.50
• Its own listing in the Commission's license search

This has a downstream effect on your paperwork: if a salesperson solicited or sold the job, that salesperson's name and license number must appear on the home improvement contract, and either the salesperson or the contractor must sign it. Missing that is a contract violation.

Ordinary laborers, clerical staff, and retail clerks do not need salesperson licenses. The trigger is soliciting or negotiating contracts with homeowners.

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

No. A contractor who holds an MHIC license is not required to hold a business construction license under Title 17 of the Business Regulation Article.

This comes up often enough that the Commission addresses it directly in its applicant FAQs. The MHIC license covers home improvement services on homes and apartment buildings of three or fewer units, and no separate state construction business license is layered on top of it for that work.

Local permit, zoning, and business registration requirements are a different matter and still apply wherever you work.

Source: MHIC Licensing FAQs for Applicants.

Four sequential steps, each gating the next. The critical structural 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 in PSI's Candidate Information Bulletin, and submit them with your fee. PSI reviews and verifies your two years of experience and approves you to test. You cannot schedule the exam without this approval.
2. Prepare for the exam. No course is required by the Commission. Most contractors who prepare with structured instruction do so here, between 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, corporate documents if applicable, and fees. The Commission reviews and, if everything is in order, issues the license.

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

We can't tell you precisely, and we won't guess. Too many of the variables sit outside anyone's control.

What actually drives the timeline:

• PSI's review of your experience documentation at Step 1, which depends on how complete and well-documented your submission is and on how quickly former employers return notarized forms.
• Exam seat availability at your preferred test center.
• Whether you pass on the first attempt. A failure carries a mandatory waiting period — see below — and that is the single largest swing factor in the entire process.
• The Commission's review of your license application, which varies with volume and with whether your file is complete.

The part you control is completeness. Applications that go in clean move; applications that generate correspondence stall. That, and passing the exam the first time.

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

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 be substituted for one of the two required years of trade experience. The Commission also accepts qualifying education for experience, including participation in 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 is documented. Through the Documentation of Experience form contained in PSI's Candidate Information Bulletin. Your former employer completes it, has it notarized, and provides specific dates along with an explanation of the duties you performed. All experience must be documented and verifiable.

Applicants whose experience or education does not fit neatly into these categories may have their qualifications considered by the Commission on an individual basis.

Source: MHIC License Categories and Requirements; PSI Candidate Information Bulletin, Documentation of Experience.

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

The salesperson examination is a separate, shorter exam of 35 questions.

What it tests. The exams are based on the laws and regulations relating to the operation of a home improvement business and the sale of home improvement work. This is the point contractors most often misjudge: the exam does not include a skills-based assessment. It tests regulatory understanding and business management. Twenty years of excellent field work prepares you for very little of it.

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 Candidate Information Bulletin for which one applies and which materials you may bring in.

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

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

Maryland imposes real mandatory waiting periods, and they escalate. This is the most consequential difference between failing in Maryland and failing in Virginia.

• After a first failure — you must wait 30 days before you can reapply.
• Any subsequent request — you must wait 60 days.
• You pay the examination fee again each time.

Worth stating plainly, because contractors licensed in Virginia often assume otherwise: Virginia has no waiting period at all and allows a retest within days. Maryland does not work that way. A failed MHIC attempt costs you a month minimum before you can even reapply.

Source: MHIC Taking the Exam, Examination FAQs.

Two years. Applicants who pass the exam must apply for licensure within two years, or the score expires and the examination must be retaken.

This catches people who pass the exam while still assembling their financial documentation, corporate paperwork, or insurance, and then let the application drift. Passing is not a permanent credential — it starts a clock.

If your file is going to take time to assemble, the sensible order is to get the documentation substantially ready before you test, not after.

Source: MHIC Taking the Exam.

No course is required by the Commission. Whether you want one is a separate question from whether Maryland demands it.

The case for preparing with instruction is specific to how this exam is built. It tests Maryland home improvement law, regulation, and business management rather than construction skill, so field experience transfers poorly. It is open book, which rewards knowing where things are far more than it rewards reading fast. And a failure triggers a mandatory 30-day wait before you can even reapply.

Our course runs 3½ hours, live and in person, taught by an instructor you can ask questions of in real time. Nearly 100% of our students pass. Our recommendation is to schedule your exam within a few days of class while the material is fresh.

Our honest answer on whether one class is enough →

The requirement is proof of financial solvency. A surety bond is not required of every applicant — it is one of two fallbacks available if you do not meet the Commission's solvency guidelines.

The primary route. You 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, you have two options, and the Commission posts forms for both:

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

Be careful with figures you find elsewhere. 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 that every licensee pays regardless of solvency — covered below.

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.

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

Unlike Virginia, where the Board requires no contractor liability insurance at all, this is a hard licensing condition in Maryland. Failure to maintain it is a violation that can put your license at risk.

Source: MHIC Notice to All Home Improvement Contractors of New General Liability Insurance Requirement; Md. Business Regulation § 8-302.1.

Notify MHIC 10 days before the coverage ends. The notice obligation runs ahead of the lapse, not after it.

Because coverage must be continuous, a gap is a licensing problem even if it is brief and even if no claim arises during it. If cancellation or non-renewal is coming, deal with it before the date, not once you have discovered it in the rear-view mirror.

Practical sequence: replace the coverage before the current policy ends wherever possible, notify the Commission 10 days ahead as required, and do not perform work during any period in which you are uninsured.

Set a calendar reminder well ahead of your renewal date. Insurers change terms, non-renew, and cancel for administrative reasons, and a lapse you did not intend counts the same as one you did.

Source: Md. Business Regulation § 8-302.1; confirm current notice procedure with MHIC at 410-230-6231.

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

What you pay. A Guaranty Fund assessment when you obtain your license and each time you renew:

What it pays out. 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 homeowner's award is pro-rated based on the total awarded to each claimant.

Who it protects. Only homeowners with claims against MHIC-licensed contractors. Work performed by an unlicensed contractor carries no Fund coverage — which is one of the more persuasive reasons homeowners check license numbers before signing.

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. Figures below are the current schedule in COMAR.

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

Not included above: the cost of your general liability policy, and a surety bond premium if you go that route rather than documenting solvency.

Source: COMAR 09.08.07.02, Schedule of Fees; MHIC.

MHIC licenses run for two years. Renewal requires the fee, the Guaranty Fund assessment, and continued compliance with the licensing requirements.

At renewal you must still have your $500,000 general liability coverage in force and still satisfy the Commission's requirements. Renewal is not a formality — it is a re-verification.

There is no continuing education requirement for MHIC renewal.

Inactive status is available if you are pausing rather than closing. COMAR provides for an inactive status application fee, reduced renewal fees while inactive, and a reissuance fee to reactivate. It is the better option than simply letting a license lapse if you intend to return to the trade.

Start gathering renewal materials well ahead of your expiration date, particularly your insurance certificate, which depends on a third party's turnaround rather than your own.

Source: COMAR 09.08.07.02; MHIC Renew Your License.

Every home improvement contract must be in writing and must be legible. The required contents are specified by statute and regulation, and MHIC may issue civil citations of $500 to $5,000 for violations.

Identifying information:

• The contractor's name, address, telephone number, and MHIC license number
• The name and license number of each salesperson who solicited or sold the contract — and either the salesperson or the contractor must sign

The work and the terms:

• The approximate dates when performance will begin and when it will be substantially completed
• A description of the home improvement to be performed and the materials to be used — the Commission notes that many disputes are avoided when this states clearly what work will be done and the quality or brand of materials
• The agreed-upon price, clearly stated
• A description of each document the contract incorporates, such as an architect's drawings or a building permit
• A description of any collateral security for the owner's obligation

The mandatory homeowner notice. The contract must give the Commission's telephone number and website and state that each contractor must be licensed by the Commission and anyone may ask the Commission about a contractor. Regulations further require the contract to state that:

1. Formal mediation of disputes between homeowners and contractors is available through the Commission;
2. The Commission administers the Guaranty Fund, which may compensate homeowners for certain actual losses caused by acts or omissions of licensed contractors; and
3. A homeowner may request that a contractor purchase a performance bond for additional protection against losses not covered by the Guaranty Fund.

On that third item — the homeowner may request the bond, but the contractor is not obligated to pay for it.

Delivery. Before work begins, the owner must be given a copy of the contract signed by the contractor.

Changes. A salesperson or other agent or employee of a contractor may not make a change in a home improvement contract for an owner.

Source: MHIC Notice to Contractors Regarding Requirements for Home Improvement Contracts; Md. Business Regulation § 8-501.

No more than one-third of the contract price as a deposit — and no payment of any kind before the contract is signed by every party to it.

The timing rule is the one contractors break without noticing. Taking a check at the kitchen table before signatures are on paper is a violation regardless of the amount, and regardless of the customer's willingness.

Beyond the initial deposit, the Home Improvement Law does not control the payment schedule. Progress payments and milestones are negotiable between you and the homeowner, as is a deposit smaller than one third.

Because the law goes quiet after the deposit, tying progress payments to specific completed benchmarks in the written contract is where most payment disputes are won or lost.

Source: MHIC, Deposit and Payments.

Arbitration clauses are optional. But if you include one, it must satisfy specific requirements, and a defective clause is a contract violation.

An arbitration clause in a home improvement contract must include:

• The name of the person or organization that will conduct the arbitration
• Whether any mandatory fees will be charged to the parties, and a list of the fee schedule
• Whether the arbitrator's findings are binding
• A disclosure that a claim against the Guaranty Fund will be stayed until completion of the mandatory arbitration proceeding

In addition, the parties must initial and date the contract next to the arbitration clause. A clause buried in boilerplate without separate initials does not comply.

That Guaranty Fund disclosure is the one to note. Requiring arbitration delays your customer's access to the Fund, and Maryland requires you to tell them so in the contract.

Source: MHIC, Arbitration Clause.

There are two separate cancellation regimes with different triggers and different clocks. Confusing them is a common and expensive error.

Contracts secured by an interest in residential real estate — three business days. Whenever payment will be secured by an interest in the home, the first page of the contract must carry a written notice in at least 10-point bold type stating in substantially this form:

"This contract creates a mortgage or lien against your property to secure payment, and may cause a loss of your property if you fail to pay the amount agreed upon. You have the right to consult an attorney. You have the right to rescind this contract within three business days after the date you sign it by notifying the contractor in writing that you are rescinding the contract."

This notice must be independently initialed by the homeowner.

Door-to-door sales — five business days, or seven. Most home improvement contracts are also covered by the Maryland Door-to-Door Sales Act. Where it applies, 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 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.

These are not alternatives. A door-to-door sale financed by a lien on the home triggers both.

Source: MHIC, Mortgage or Liens and Door-to-Door Sales Act; Md. Business Regulation § 8-501(c)(2)–(3).

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

Under § 8-501 of the Business Regulation Article, all home improvement contracts for rooftop solar panel installation must include the 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 it is conditional: the customer must be informed of the cost of the barrier and the risks of not installing one.

How the Commission recommends documenting a waiver. Any contract in which the customer has waived the barrier should include:

• The price of the wildlife barrier
• An explanation of the risks of not installing one
• A space for the customer's initials adjacent to that explanation, so the customer acknowledges the risks and affirmatively waives installation

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

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

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 in the State without a contractor license, and may not sell or offer to sell a home improvement without a contractor or salesperson license. A violation is a misdemeanor:

Either, or both, may be imposed.

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

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

Your customer loses the Guaranty Fund. The Fund applies only to work done by licensed contractors, leaving a homeowner who hired you with no recourse through it.

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

They are two separate enforcement tracks, and a licensed contractor in good standing is far more likely to meet the first than the second.

Civil citations are issued administratively by the Commission. Regulations authorize MHIC to issue citations in amounts of $500 to $5,000 for violations of the contract requirements. These do not require a criminal prosecution and are aimed at licensees whose paperwork does not comply — a missing homeowner notice, a defective arbitration clause, an oversized deposit, payment taken before signatures.

Criminal prosecution under § 8-601 targets acting without a license at all, and carries the fines and jail exposure described above.

The practical implication: getting licensed removes the § 8-601 exposure but does nothing about the citations. Those depend entirely on whether your contract template complies, which is why the contract section above is worth more attention than most contractors give it.

Source: MHIC Notice to Contractors; COMAR 09.08.