Maryland contractor license requirements

Licenses and registrations

Home Improvement Contractor License

Any contractor who solicits or performs home improvement work (alteration, remodeling, repair or replacement) on a residence in Maryland, including roofing, painting, flooring (not carpet), siding, kitchens and baths. Covers homes and individual condo units; excludes common areas of condos and buildings with four or more single-family units.

• Good to know: Each licensed business must have an individual licensee who meets the requirements. Additional fee for each extra place of business. The separate subcontractor license was eliminated July 1, 2016; subcontractors may work without a license for an MHIC-licensed contractor.

Home Improvement Salesperson License

Individuals who sell home improvement jobs on behalf of a licensed contractor.

• Good to know: Must pass the salesperson exam. A salesperson may represent no more than two licensed contractors at a time, and only one contractor for any single homeowner contract.

What you need to qualify

• Exams: Contractors and salespersons must pass the MHIC exam (covering home improvement law and trade competency), administered by PSI, before applying. A prep course is not required.
• Experience: Contractors need at least two years of experience in home improvement work, construction and/or related education.
• Insurance: Home improvement contractors must maintain general liability insurance of at least $500,000 (Business Regulation Article 8-302.1, effective June 1, 2024). The MHIC License Categories page still lists $50,000.
• Bond: No bond is required if the applicant meets the financial solvency guidelines. Applicants who do not may obtain an indemnitor or a surety bond (the MHIC provides $30,000 and $100,000 surety bond forms).
• Financial: Applicants must show financial solvency relative to the size and scope of the business, based on personal assets, liabilities, a full credit report and net worth, using the Contractor's Personal Financial Statement.
• Business registration: Corporations submit articles of incorporation and a Certificate of Good Standing from the Maryland Department of Assessments and Taxation (SDAT). Trade names must be registered with SDAT.
• Also required: An MHIC license does not authorize acting as a public adjuster; that requires a Maryland Insurance Administration license.

Fees, renewal and continuing education

• Fees: Contractor (2-year original): $281.25 application fee per place of business, $100 Guaranty Fund assessment and $22.50 processing fee. Salesperson (2-year original): $112.50 plus $22.50 processing fee. Contractor renewal: $281.25 plus $175 Guaranty Fund assessment. Salesperson renewal: $112.50. Exam fees are paid directly to PSI.
• Renewal: Every two years from the date of issuance of the original license.
• Continuing education: None. MHIC states there is no continuing education requirement to renew an MHIC license.

Contracts and homeowner protections

Home improvement contracts must be in writing, legible and signed by each party, with a signed copy given to the homeowner before work starts. They must describe the work and materials; list the contractor's name, address and MHIC license number (and the salesperson's name and license number, if any); give approximate start and substantial completion dates; and include the MHIC contact notice and a Guaranty Fund notice. A contractor cannot accept more than 1/3 of the contract price as a deposit, and no payment may be accepted until the contract is signed. Contracts secured by a mortgage or lien must carry a first-page notice and give a three-business-day right to rescind; contracts covered by the Door-to-Door Sales Act allow cancellation until midnight of the fifth business day (seventh day if the buyer is 65 or older). Arbitration clauses must meet specific disclosure rules. The Home Improvement Guaranty Fund can pay a homeowner up to the amount paid to the contractor, with a maximum of $30,000, for losses caused by a licensed contractor; awards are pro-rated if claims against one contractor exceed $250,000.

Electrical, plumbing and HVAC work

The Maryland Department of Labor has separate state boards for electricians, plumbing, and heating, ventilation, air-conditioning and refrigeration (HVACR) contractors.

Working without a license

Acting as a contractor without an MHIC license is a misdemeanor: on first conviction, a fine of up to $1,000, imprisonment up to 6 months, or both; on a second or later conviction, a fine of up to $5,000, imprisonment up to 2 years, or both (Business Regulation Article 8-601).

What to confirm with the state

We couldn't confirm these on an official page when we checked. Ask the licensing office before you rely on them:

• The MHIC home page notes application and licensing fees increased August 1, 2024; the Forms and Fees page and COMAR both show $281.25 for a contractor license, but the effective date of those amounts was not confirmed.
• The MHIC Licensing FAQ still says the Guaranty Fund pays up to $20,000; the MHIC home page says up to $30,000, which is used here.
• County or city licensing requirements for home improvement contractors (for example county electrical or plumbing licensing) were not checked.
• Whether workers' compensation proof is required for an MHIC license (not stated on the pages we checked).

Sources

1. Maryland Home Improvement Commission - Maryland Department of Labor
2. MHIC License Categories and Requirements
3. MHIC Apply for an Original License
4. MHIC Licensing FAQs
5. MHIC Forms and Fees
6. MHIC Education
7. Maryland Home Improvement Contracts - MHIC
8. What services are Home Improvement - MHIC
9. COMAR 09.08.07.02 Schedule of Fees
10. Business Regulation Article 8-302.1 (liability insurance)
11. Business Regulation Article 8-601 (penalties)
12. Business Regulation Article 8-302 (examinations)
13. Occupational and Professional Licensing - Maryland Department of Labor