15 practice questions

Complaints, Warranties & the Guaranty Fund

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.

1. 01What is the MHIC Guaranty Fund?A fund financed by mandatory contributions from every licensed contractor, under COMAR 09.08.01.20, that reimburses homeowners for actual financial loss caused by a licensed contractor's violation of home improvement law, up to set limits.
2. 02What happens if you ignore an MHIC complaint letter?The MHIC can discipline you for the non-response alone under COMAR 09.08.01.27, turning a fixable complaint into a threat to your license. Respond promptly with documentation and an offer to resolve it.
3. 03Can a homeowner file an MHIC complaint after your warranty ends?Yes. Your contractual warranty may have ended, but the MHIC has its own time limits for complaints under COMAR 09.08.01.13, and a workmanship defect can still be actionable. A goodwill repair is usually the cheaper path.
4. 04Is a two-day delay grounds for an MHIC complaint?No. A short delay that still falls within the contract's completion window is not a violation. Reassure the homeowner, show the progress, and document the conversation rather than daring them to complain.
5. 05How should you prepare for an MHIC disciplinary hearing?Attend, cooperate fully, bring documented corrective actions, and consider legal representation. The MHIC can suspend, revoke, or condition your license, and failing to appear can mean losing it by default.

6. 06What counts as project abandonment?Failing to perform work, without justification, for an unreasonable period. It is among the most serious and common MHIC complaints; weeks without progress on a torn-out kitchen approaches it.
7. 07How do you respond to an MHIC abandonment complaint?Acknowledge the problem and take corrective action: finish the work promptly and offer good faith, such as a discount. Satisfactory completion can resolve the complaint through mediation without formal discipline; excuses make it worse.
8. 08What documentation defends you against an MHIC complaint?A signed contract, permits and inspection records, progress photos, a walkthrough signed by the homeowner, and payment receipts. With them a complaint can be resolved in one meeting; without them it is your word against theirs.
9. 09How should you handle a warranty callback?Promptly and in full. Your workmanship warranty is a binding obligation, so a defect from your installation within the warranty period is yours to fix, not the manufacturer's and not billable work.
10. 10Does your warranty cover damage the homeowner caused?No. A warranty covers defects in your workmanship, not damage from later changes the homeowner made. Document the cause with photos and consider offering a paid repair at cost as goodwill.
11. 11What do you owe a client in an after-hours warranty emergency?Prompt help: talk them through stopping the water by phone, schedule a visit for the morning, document everything, and fix it under warranty if your work failed.
12. 12How do you run a final walkthrough and punch list?Walk it with the homeowner, fix the real defects, explain items that are within normal tolerances, and record what you will fix and what is within spec on a punch list both of you sign.
13. 13What should a project completion package include?Your completion certificate plus the documentation of permitted work and inspection sign-offs. It proves the work was done by a licensed contractor, permitted, and inspected, which also helps at resale.
14. 14How do you handle a client disappointed with finished work?If the work meets the contract you are likely fine legally, but own any verbal overpromise and consider a goodwill gesture rather than arguing. Never promise more than the budget can deliver.
15. 15Who is liable when a flip buyer finds unpermitted work?The contractor. Under COMAR 09.08.01.08 the duty to pull permits and work to code is yours, and "the owner told me to" is no defense. Expect fines, remediation costs, and MHIC discipline.