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Can unpaid supplier bills put your MHIC license at risk?

Short answer. Yes. Under COMAR 09.08.01.22 the MHIC can treat unpaid debts from home improvement work as evidence of financial irresponsibility, which can affect your license. A payment plan shows good faith.

  • COMAR 09.08.01.22
  • COMAR 09.08.01.19

Work it through

You're the contractor. Pick what you'd do, then see how each choice plays out.

A vendor calls to collect on a $3,800 materials bill that's 90 days overdue. You've been stretching your payables because cash is tight.

The vendor mentions they'll report you to the MHIC.

  1. Correct

    COMAR 09.08.01.22 addresses outstanding obligations. The MHIC can consider unpaid debts related to home improvement work as evidence of financial irresponsibility, which can affect your license. A payment plan demonstrates good faith. More practically: vendors who report you to the MHIC create a paper trail that compounds during renewal, especially combined with the credit report requirement (COMAR 09.08.01.19).

  2. Wrong

    The MHIC absolutely considers outstanding obligations. COMAR 09.08.01.22 exists specifically because unpaid vendor debts indicate potential financial instability and harm the industry's reputation. Combined with the credit report requirement at renewal, unpaid debts create a pattern that the Commission evaluates. Your vendor relationships ARE part of your license standing.

All 10 mhic licensing & renewal questions

  1. What should a new MHIC contractor do before the first job?
  2. What happens if your contractor liability insurance lapses in Maryland?
  3. How do you meet the MHIC financial solvency requirement at renewal?
  4. What does the MHIC require to renew a contractor license?
  5. Do you need to update your MHIC license when you form an LLC?
  6. Do you have to tell the MHIC when your business address changes?
  7. What if the MHIC lookup shows your old business name?
  8. Why does the MHIC review your credit report?
  9. Can unpaid supplier bills put your MHIC license at risk?
  10. How should a contractor respond to an MHIC compliance audit?