MHIC Exam Study Guide
Every scenario in the free Maryland Contractor Simulator, written out as a practice question: the situation, your options, how each choice plays out, and the Maryland law where it applies.
Maryland requires a written contract for home improvement work, with no exemption for small jobs. These scenarios cover what the contract must contain, the notices it must carry, and how a clear contract prevents the disputes that become MHIC complaints.
- Is a handshake deal legal for home improvement work in Maryland?
- What must a Maryland home improvement contract include?
- Which MHIC notice must every home improvement contract include?
- What if a signed contract is missing the completion date?
- Can a Maryland home improvement contract require arbitration?
- What happens in a scope dispute when nothing is in writing?
- Does a small cash side job need a written contract?
- Does a $2,000 job need a written home improvement contract?
- Can you start emergency repairs before signing a contract?
- Should you give a homeowner a ballpark or a written estimate?
- How do you fix a vague scope of work before it becomes a dispute?
- How should you respond when a client redlines your contract?
- How should a contract handle upgrades during the project?
- How do you price a contract for work that starts months later?
- Should a multi-year renovation be one contract or several?
- Can you sign a home improvement contract with a 17-year-old?
- What happens when a homeowner fires you partway through a job?
- Can you substitute materials named in the contract?
- How should you handle materials the homeowner supplies?
Money is where most home improvement disputes start. These scenarios cover the legal limit on deposits, milestone payment schedules, collecting what you are owed, and why every change to scope, price or schedule belongs in a signed change order.
- How large a deposit can a Maryland contractor take?
- Can you accept full payment up front for a home improvement job?
- Must you refund a deposit if the homeowner cancels before work starts?
- How do you collect an overdue progress payment?
- Can a homeowner hold back part of the final payment?
- Who pays the fee when a homeowner pays by credit card?
- Does added work need a written change order?
- Can you collect for extra work that was never put in writing?
- How do you handle a weather delay past the contract completion date?
- What if the insurance payout is lower than your estimate?
- How do you handle a client whose vision is bigger than the budget?
Getting the license is the start. These scenarios cover what it takes to keep it: insurance that never lapses, financial solvency at renewal, reporting changes to the Commission, and handling an audit or a credit review.
- What should a new MHIC contractor do before the first job?
- What happens if your contractor liability insurance lapses in Maryland?
- How do you meet the MHIC financial solvency requirement at renewal?
- What does the MHIC require to renew a contractor license?
- Do you need to update your MHIC license when you form an LLC?
- Do you have to tell the MHIC when your business address changes?
- What if the MHIC lookup shows your old business name?
- Why does the MHIC review your credit report?
- Can unpaid supplier bills put your MHIC license at risk?
- How should a contractor respond to an MHIC compliance audit?
Maryland defines home improvement broadly. These scenarios work through where the line falls: residential versus commercial work, owners working on their own property, handyman jobs, and contractors coming in from out of state.
- What counts as home improvement under Maryland law?
- Does a handyman need an MHIC license in Maryland?
- Can a landlord renovate their own rentals without an MHIC license?
- Does an MHIC license cover commercial renovation work?
- Does an MHIC license cover building an in-ground pool?
- Is installing a TV antenna home improvement in Maryland?
- How do you explain the risk of an unlicensed contractor to a homeowner?
- Do out-of-state storm chasers need a Maryland MHIC license?
Your MHIC number has to appear on your vehicles, contracts and every form of advertising, online included. These scenarios also cover salespeople: they need their own license, and what they promise, you owe.
- Do you have to give homeowners your MHIC license number?
- What must Maryland home improvement advertising include?
- Does your MHIC number have to be on your work truck?
- Where must your MHIC license number appear?
- Does a contractor's Facebook page need the MHIC number?
- Does a home improvement salesperson need an MHIC license?
- Are you responsible for your salesperson's violations?
- Are you bound by a warranty your salesperson promised?
- How do you answer a competitor's false claims about your license?
- How should a contractor respond to a false online review?
- How do you compete with a far lower bid from a questionable contractor?
- Should you use a competitor's bid to undercut them?
- When is suggesting upgrades good practice and not an upsell?
Some sales carry a right to cancel and some do not. These scenarios cover door-to-door sales, home show contracts, pressure on vulnerable homeowners, post-storm pricing, and the insurance schemes that turn a contractor into a defendant.
- What must a door-to-door home improvement contract include?
- Does every homeowner have a 3-day right to cancel?
- Does a home show sale carry a 3-day right to cancel?
- What should you do about a pressured sale to an elderly homeowner?
- What happens when a contractor is accused of exploiting an elderly client?
- Can contractors raise prices after a storm in Maryland?
- Is writing a second contract for the insurance company fraud?
- Can you sign an invoice for more than the work you did?
- How does COMAR regulate model home and referral offers?
The prime contractor is responsible for every permit the job needs. These scenarios cover when permits are required, how inspections are sequenced, and the residential code requirements that inspectors check most often.
- Who is responsible for permits on a Maryland home improvement job?
- Can you skip permits if the homeowner asks you to?
- How do you build permit costs into a contract?
- Which home projects need a permit in Maryland?
- Do cosmetic bathroom refreshes in rentals need permits?
- What happens when an inspector finds work without a permit?
- What is your liability when unpermitted work fails?
- How should you handle a problem the inspector finds?
- Why do building inspections happen in stages?
- How do you get a building permit approved faster?
- Where is fire blocking required under IRC R302.11?
- When does a basement bedroom need an egress window?
- Where are smoke alarms required after a renovation?
- Can a homeowner refuse GFCI outlets in the kitchen?
- When does a deck stairway need a handrail?
- Does a bathroom need an exhaust fan under the IRC?
- How must a deck ledger be attached to the house?
- How is energy code compliance checked on an addition?
- Does the ADA apply to a single-family bathroom remodel?
- When does a retaining wall need an engineered design?
- What is required before removing a load-bearing wall?
- Can you build a deck over a utility easement?
- When does a patio trigger stormwater management in Maryland?
- Does a building permit override HOA approval?
- How do you take over a job another contractor abandoned?
- How do you assess a homeowner's failed DIY renovation?
As the prime contractor you answer for everyone on the job. These scenarios cover paying subcontractors on time, mechanics liens, using only licensed trades, classifying workers correctly, and what happens when someone gets hurt.
- Must you pay subcontractors when the homeowner pays late?
- What happens when an unpaid subcontractor files a mechanics lien?
- Can a subcontractor put a lien on a house the owner paid in full?
- Should a homeowner pay your subcontractor directly?
- What if your electrician's license expired mid-job?
- Can you hire a plumber who is still getting licensed?
- Can a homeowner do their own electrical work on your job?
- Who coordinates subcontractors working in the same space?
- Who is liable when a subcontractor damages the home?
- How do you handle a subcontractor who stops showing up?
- Are your regular workers employees or 1099 contractors?
- What must you do when an employee is hurt on the job?
- What happens when an off-the-books worker is injured?
- What are the risks of hiring day laborers for cash?
Safety rules protect your crew, your clients and your license. These scenarios cover fall protection, lead paint in pre-1978 homes, suspected asbestos, mold, disposing of debris, and the hazards a job site creates for neighbors.
- When does OSHA require guardrails on scaffolding?
- What does the EPA RRP rule require when you find lead paint?
- Can you remove suspected asbestos during a renovation?
- What should you do when demolition uncovers mold?
- How must renovation debris be disposed of?
- Are you liable for weather damage to an unprotected job?
- Are you liable when someone slips on ice at your job site?
- What hours can construction start in a Maryland neighborhood?
- What should you do when your crew damages a neighbor's property?
Most MHIC trouble arrives as a complaint. These scenarios cover how the Guaranty Fund works, responding to the Commission on time, project abandonment, warranty callbacks, and the closeout habits that keep complaints from being filed.
- What is the MHIC Guaranty Fund?
- What happens if you ignore an MHIC complaint letter?
- Can a homeowner file an MHIC complaint after your warranty ends?
- Is a two-day delay grounds for an MHIC complaint?
- How should you prepare for an MHIC disciplinary hearing?
- What counts as project abandonment?
- How do you respond to an MHIC abandonment complaint?
- What documentation defends you against an MHIC complaint?
- How should you handle a warranty callback?
- Does your warranty cover damage the homeowner caused?
- What do you owe a client in an after-hours warranty emergency?
- How do you run a final walkthrough and punch list?
- What should a project completion package include?
- How do you handle a client disappointed with finished work?
- Who is liable when a flip buyer finds unpermitted work?
Compliance is a set of business habits more than a set of rules. These scenarios cover keeping records, estimating honestly when a client wants a lower number, managing workload, and the advice experienced contractors give new ones.
- What records should a Maryland contractor keep?
- How many projects can you take on before quality suffers?
- How do you estimate honestly for a flipper on a tight budget?
- Should you match a lowball bid to win a job?
- Who is liable when a client tells your crew to cut corners?
- How do you handle a client's sticker shock?
- How should you structure a payment plan for a returning client?
- Are weekly progress reports worth the effort?
- What grants help disabled veterans pay for home modifications?
- How does contractor burnout lead to MHIC complaints?
- What is the most important thing to know for the MHIC exam?
- What one habit keeps contractors out of trouble with the MHIC?
- What advice would you give a newly licensed Maryland contractor?