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Home Improvement Contractor Licensing in Maryland

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The Maryland Home Improvement Commission regulates the construction industry by requiring all contractors to obtain a license before they begin work on construction projects.  Before a contractor may build, alter, repair, remodel or replace homes and condominiums in the State of Maryland, they must hold a Home Improvement Contractor license.

Before contractors submit their application to the Commission, they must pass an eligibility exam, prove that they are financially responsible, and prove that they have necessary experience to work as a Home Improvement Contractor.

In addition to licensing contractors, the Maryland Home Improvement Commission operates a Guaranty Fund that protects homeowners in the event of loss or damage.  They also handle the licensing of subcontractors and contracting salespersons.

*A Maryland Home Improvement Contractor’s License does not allow contractors to contract work on common areas or condos with 4 or more single family units.  

Process to Obtain a Home Improvement Contractor’s License in Maryland

  1. Applicants must have at least 2 years of work experience in home improvement contracting, construction or a related field.  Education may take the place of work experience in some instances.
  2. Applicants must register for, take and pass the Maryland Home Improvement Contractor Exam.
  3. Applicants must check with the Commission to see if their chosen business name is available for use in the State of Maryland.
  4. Applicants must register their business name with the Department of Assessment and Taxation and submit a copy of their registration certificate along with their application
  5. Applicants must demonstrate that they are financially responsible based on the scope and size of their business.  The Commission evaluates the contractor’s credit, assets, liabilities and net worth.
  6. Applicants must prove that they hold liability insurance in the amount of $50,000.
  7. Applicants must complete and submit the Contractor’s Original Application and submit it to the Commission along with all required documents and fees.
*Corporations and LLCs have the added task of submitting a copy of their Articles of Incorporation/Organization along with their license application.  They must also submit a certificate proving that they are in good standing with the Department of Assessment and Taxation.  

Experience Requirement

In order to be eligible for Maryland Home Improvement Contractor License, applicants must prove that they have at least 2 years of work experience in home improvement or construction.  The Commission ensures that all applicants have the knowledge and experience necessary to operate as a Home Improvement Contractor.  Acceptable work experiences include:

  • Employment performing home improvements, renovations or repairs on commercial or residential structures
  • Participation or employment with a charitable organization or community service program that performs construction work
  • Performing renovations or repairs on a personal home or the home of a family member/friend that requires a permit

In some instances, 2 years of education may take the place of work experience.  The Commission considers the following education experiences acceptable:

  • Participation in a registered apprenticeship program
  • Participation in a vocational school with the primary focus being a building trade
  • Participation in a work study program where the primary focus is a building trade

At the time that they register for the exam, contractors are required to prove their work or education experience by filling out the Documentation of Experience From Employer form, on page 11 of the Candidate Information Bulletin. The applicant’s former employer is required to notarize and provide specific dates and an explanation of the duties performed.  All experiences included must be documented and verifiable.

More information about work experiences may be found inside the Candidate Information Bulletin:

https://candidate.psiexams.com/bulletin/display_bulletin.jsp?ro=yes&actionname=83&bulletinid=124&bulletinurl=.pdf

The Examination

Before a contractor may apply for their Maryland Home Improvement License, they must first take and pass the Maryland Home Improvement Contractor Exam.  The exam is administered by PSI Services.  It is a 150 minute, open-book exam that tests the contractor’s knowledge on the following subjects:

  • Home Improvement Law in the State of Maryland
  • Maryland Door-to-Door Sales Act
  • Labor Laws in the State of Maryland
  • Safety Regulations
  • Estimating

The first step in preparing for the exam is to download the PSI Candidate Information Bulletin. The bulletin contains all the information the contractor needs for taking the exam, including how to register, study materials, a list of references allowed in the testing center and sample questions.

For a copy of the Candidate Information Bulletin, please visit:

https://candidate.psiexams.com/bulletin/display_bulletin.jsp?ro=yes&actionname=83&bulletinid=124&bulletinurl=.pdf

Contractors may also prepare for the exam by enrolling in an exam prep course.  Many local community colleges offer exam prep courses, including:

  • Hagerstown Community College
  • Chesapeake College (Wye Mills)
  • Carroll Community College
  • College of Southern Maryland (LaPlata)
  • Community College of Baltimore County (Catonsville)
  • Baltimore City Community College
  • Montgomery College (Gaithersburg)

Inside the Candidate Information Bulletin is a copy of the exam registration form.  Applicants may register for the exam ONE of the following ways:

  • Online- go to the PSI website and follow the link for new user registration: www.psiexams.com
  • By Phone- call PSI and use their automated system 24 hours a day.  Representative are standing by to assist callers during regular business hours:
    (800) 733-9267
  • Fax- when registering by fax, allow 4 business days for processing.  Fax the registration form and payment information to:
    (702) 932-2666
  • By mail: allow approximately 2 weeks for processing when submitting the exam registration form by mail.  Complete the exam registration form from the Candidate Information Bulletin.  Mail the registration form and payment to:

    PSI Licensure: Certification
    3210 E Tropicana
    Las Vegas, NV 89121

There is a $63 fee to register for the exam.

PSI accepts payments in the form of:

  • Cashiers Check or Money Order may payable to “PSI”
  • Visa or Mastercard when applying online or by phone or fax

Once PSI accepts the exam registration, it is the applicant’s responsibility to call PSI to schedule their exam once they have registered. To schedule an exam, call PSI at:  (800) 733-9267

Testing centers are located in:

  • Baltimore
  • Hagerstown
  • Lanham
  • College Park
  • Salisbury
  • Crofton

On the day of the test, examinees should arrive at least 30 minutes for before their scheduled exam to allow time for check-in.  They are also required to bring 2 forms of identification:

  1. A government issued photo id with the examinee’s signature; such as a driver’s license or passport
  2. Another form of identification with the examinee’s name and signature; such as a credit card or debit card.

Contractors are required to pass the exam with a minimum score of 70%.  Scores are issued on the day of the exam before the contractor leaves the testing center.  These scores are valid for a period of 2 years.

If the contractor does not pass the exam, there is an unlimited number of re-takes.  However, contractors are required to re-register and pay the $63 exam fee.  They must wait 21 days before they may register for and re-take the exam after their first attempt, and 60 days in between each additional attempt.

Preparing to Submit an Application

After the contractor passes the exam, it is time to complete the Original Contractor Application. PSI will mail the contractor a copy of the application after they have passed.  Do not call the Commission for a copy of the application.  Applications are also found online at:

https://www.dllr.state.md.us/license/mhic/mhicaff.shtml#forms

Before the contractor submits their application, there are a number of steps they need to go through and documents they must gather.  Applicants must complete the following steps before mailing in their application:

    1. Check with the Commission to make sure that the business name the applicant has chosen is available.  Call the Commission at (410)-230-6309
    2. Once the business name has been approved by the Commission, contact the Department of Assessment and Taxation to register the business name.  The Department will issue a registration certificate that must be submitted along with the license application.  Call the Department at (410)-767-1330  OR  visit:http://www.dat.state.md.us/
    3. Businesses that plan to operate as a corporation or LLC must submit a copy of their Articles of Incorporation or Articles of Organization along with their license application.  They must also submit a Certificate of Good Standing, proving that they are in good standing with the Department of Assessment and Taxation.
    4. All applicants are required to prove that they are financially responsible.  This includes filling out the Personal Financial Statement.  The Maryland Home Improvement Commission looks at the applicant’s net worth to determine if they are responsible enough for the scope and size of their business.  Net worth is determined by subtracting the applicant’s assets from their liabilities.  Financial responsibility ensures that the contractor is able to repay the Guaranty Fund in the event that they damage a client’s property.  The Guaranty Fund automatically insures licensed Home Improvement Contractors in the State of Maryland for $20,000 per job, and up to $100,000 in the event of loss or damage.  To prove their financial status, applicants are required to include the following:
      • Copies of their personal bank statements for the past 3 months (do not include business accounts)
      • Original credit report from the past 90 days.  The Commission suggests applicants use: www.annualcreditreport.com
      • A list of all assets (listed on the Personal Financial Statemet) along with documented proof of ownership:
        • Copy of title and registration for all vehicles, along with a printout of the vehicle’s Kelly Blue Book value (do not include business vehicles)
        • Copy of a real estate assessment/written appraisal within the past 2 years for any properties owned.  If the property is not located in the State of Maryland, a copy of the deed is required.

For a copy of the Personal Financial Statement, please visit:

https://www.dllr.state.md.us/license/mhic/mhicaff.shtml#forms

*If the applicant is unable to prove financial responsibility, they have the option of obtaining a 2-year surety bond in the amount of $20,000.  
    1. Applicants must obtain general liability insurance in the amount of $50,000.  The Certificate of Liability Insurance must be submitted along with the license application.  The policy must include the name of the contractor and specify the Maryland Home Improvement Commission as the certificate holder.  It also must include the Commission’s address:

500 North Calvert Street
Room 306
Baltimore, MD 21202

  1. All applicants must obtain a 2×2 photograph of themselves, to be submitted along with the completed license application.

Submitting an Application

Once the applicant has passed the exam, gathered the required documents and filled out the Original Contractor Application and Personal Financial Statement, it is time to submit the application.

There is a $370 license fee.  The Maryland Home Improvement Commission accepts payments in the form of check or money order, made out to “MHIC”

Mail the appropriate documentation, application, photograph and license fee to:

Maryland Home Improvement Commission
P.O. Box 17410
Baltimore, MD 21297-1410

Do not  mail the application to the Commission’s physical address on Calvert Street.  The Commission also does not accept applications at their offices in-person.

Once the Commission approves the contractor’s application, they will be issued a Maryland Home Improvement Contractor License, allowing them the begin contracting work in the State of Maryland.

How Long is a Maryland Home Improvement Contractor’s License Valid?

Home Improvement Contractor Licenses are good for a period of 2 years in the State of Maryland.  During that time the contractor must keep their liability insurance active and current.  Proof of current liability insurance is needed each time the contractor renews their license.  If the policy should be cancelled or ineffective at any time during their license period, contractors must notify the Commission within 10 days before the policy is inactive to avoid penalties.

Home Improvement Contractor Licenses expire 2 years from the date that they were originally issued.  It is the contractor’s responsibility to renew their license before it expires.  Contractors may renew their license with the Commission online by creating a secure account.  For more information on license renewal, please visit:

https://www.dllr.state.md.us/cgi-bin/ElectronicLicensing/HIC/HICrenew1.cgi?renew=yes

There is a $405 renewal fee.

*Be sure to check with the Commission regarding fees, as fees are subject to change without public notice.  

Table of Fees

Fee What is it For? When is it Due?
$63 Maryland Home Improvement Contractor Exam Fee Upon registering for the exam
$370 Maryland Home Improvement Contractor License Fee Upon submitting the license application
$405 Maryland Home Improvement Contractor License Renewal Fee Upon renewing the license every 2 years