13 practice questions

Running a Compliant Business

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.

1. 01What records should a Maryland contractor keep?Contracts, change orders, and completion certificates; records of every payment received and made; permits and inspection sign-offs; insurance certificates; and subcontractor agreements, ready to produce if the MHIC investigates.
2. 02How many projects can you take on before quality suffers?Only as many as you can run well. Overcommitting is a leading cause of MHIC complaints, through missed deadlines, slipping quality, poor communication, and cut corners, so give new clients an honest start date.
3. 03How do you estimate honestly for a flipper on a tight budget?Give the real number for doing the work to code with proper permits, even if it is far above the client's budget. A price that only works by skipping permits leaves you holding the liability.
4. 04Should you match a lowball bid to win a job?No. A bid far below the true cost forces skipped permits, unlicensed subs, cheap materials, or abandonment. Offer a reduced scope instead, stated explicitly in the contract and still built to code.
5. 05Who is liable when a client tells your crew to cut corners?You are. A client cannot direct you to skip permits or ignore code (COMAR 09.08.01.08); every violation traces back to your MHIC license, and "the client told me to" is no defense.

6. 06How do you handle a client's sticker shock?Give them time and your documented assessment with photos, and let them compare other estimates. Do not cut the price below what code-compliant work costs.
7. 07How should you structure a payment plan for a returning client?Use a milestone-based payment schedule, and document existing conditions with photos, what is being demolished and why, the new scope, and the permit and inspection schedule in the contract.
8. 08Are weekly progress reports worth the effort?Yes. Weekly reports keep you organized, catch problems early, and build a paper trail that protects you in any dispute, and clients see them as professionalism.
9. 09What grants help disabled veterans pay for home modifications?The VA's Specially Adapted Housing (SAH) and Special Home Adaptation (SHA) grants can cover significant home modification costs for eligible disabled veterans. Many veterans do not know they exist.
10. 10How does contractor burnout lead to MHIC complaints?Overextension sets off a cascade: mistakes increase, communication slips, clients complain, and the stress causes more mistakes. Taking on fewer jobs and doing them well protects your license and your health.
11. 11What is the most important thing to know for the MHIC exam?Understanding how the law applies, not memorizing it. Most of the exam is Maryland home improvement law: contract requirements, contractor duties, advertising, door-to-door cancellation rights, paying subcontractors, and the Guaranty Fund.
12. 12What one habit keeps contractors out of trouble with the MHIC?Documentation. Contracts, change orders, permits, and disclosures are all forms of it, and complaints, Guaranty Fund claims, and license hearings are decided by who has the records.
13. 13What advice would you give a newly licensed Maryland contractor?Build systems of compliance from day one. Written contracts, permits, honest advertising, and prompt payment protect your clients, workers, subcontractors, and your own license better than any shortcut.