Maryland’s home remodeling industry is tightly regulated to protect homeowners and ensure quality workmanship. The Maryland Home Improvement Commission (MHIC) sets the standards that every remodeler, contractor, and salesperson must follow. If you’re a remodeler in Maryland, understanding and complying with MHIC regulations is not just good business—it’s the law.
What Is the MHIC and Who Needs a License?
The MHIC is the state agency responsible for licensing and regulating home improvement contractors and salespersons. Any work involving the alteration, remodeling, repair, or replacement of a residential building or part of a building—including individual condominium units—requires an MHIC license. This includes everything from kitchen and bathroom remodels to deck installations and window replacements. Work on commonly owned condominium areas or buildings with four or more single-family units is excluded.
Key Requirements for Maryland Remodelers
1. Licensing and Experience
- License Required: All contractors and subcontractors performing home improvement work must hold a valid MHIC license. Subcontractors may work without a license only if employed by a licensed contractor.
- Experience: Applicants must show at least two years of experience in home improvement work.
- Exam: Passing the MHIC licensing exam is mandatory for all applicants.
2. Financial Solvency and Insurance
- Financial Review: Applicants must demonstrate financial solvency, including a review of assets, liabilities, and a recent credit report. If the net worth requirement isn’t met, a surety bond of at least $20,000 is required.
- Insurance: A certificate of general liability insurance with a minimum of $50,000 coverage is required, naming the MHIC as the certificate holder.
3. Business Registration
- Trade Name: Contractors must register their business or trade name with the Maryland Department of Assessments and Taxation and provide proof with their application.
4. Guaranty Fund
- Consumer Protection: Licensed contractors contribute to the MHIC Guaranty Fund, which compensates homeowners for actual monetary losses due to poor workmanship or failure to perform. The maximum payout is $30,000 per homeowner, with a cap of $250,000 per contractor.
Compliance and Best Practices
1. Contract Requirements
- Written Contracts: All home improvement contracts must be in writing and include the contractor’s MHIC license number, a detailed description of the work, the total price, and the estimated completion date.
- Deposits: Contractors cannot require more than one-third of the contract price as a deposit at signing.
- Arbitration Clauses: If included, arbitration clauses must be clearly disclosed and initialed by both parties.
2. Advertising and Identification
- License Number Display: Contractors must display their MHIC license number (preceded by “MHIC #”) on all contracts, advertisements, and both sides of vehicles used for business. The number must be at least 3 inches high on vehicles.
- Truthful Advertising: False, deceptive, or misleading advertising is strictly prohibited.
3. Lead Safety and Environmental Compliance
- Lead Paint: For homes built before 1978, contractors must provide the EPA’s lead hazard information pamphlet, contain the work area, minimize dust, clean up thoroughly, and document compliance. EPA certification is required for projects disturbing lead-based paint.
4. Ongoing Obligations
- Notification of Changes: Licensees must notify the MHIC within 10 days of any change in address, trade name, or business ownership.
- Renewal: Licenses must be renewed every two years, with updated insurance and Guaranty Fund payments.
Penalties for Non-Compliance
Performing home improvement work without an MHIC license is a criminal offense, punishable by fines and possible jail time. Homeowners who hire unlicensed contractors are not protected by the Guaranty Fund (Maryland Courts PDF). Additional violations—such as taking excessive deposits, failing to perform contracts, or misleading advertising—can result in civil penalties up to $5,000 per violation.
Why Compliance Matters
Following MHIC regulations protects both remodelers and homeowners. It builds trust, ensures access to the Guaranty Fund, and helps maintain a high standard of professionalism in Maryland’s remodeling industry. For contractors, being licensed and insured is not just a legal requirement—it’s a mark of credibility and a competitive advantage.