Exam Cheat Sheet · Quick Reference
Maryland Home Improvement Salesperson (MHIC)
Maryland
Verified, not estimated. Every figure below is drawn from the official exam structure we maintain — question counts, passing standard and topic weighting. Practice questions are grounded in the source law with statute citations. We omit any figure we can't verify rather than guess at it.
Total questions
35
Passing score
70%
Exam time
90 min
Format
Reference materials allowed
Maryland State Portion 35 questions
Home Improvement Law
25 Q · 71%
Definition of home improvement and scope of the law (included and excluded work)Maryland Home Improvement Commission structure, authority, and operationsContractor and salesperson licensing requirements, exemptions, and application processHome Improvement Guaranty Fund claims, eligibility, award limits, and contractor reimbursementHome improvement contract required elements and consumer protectionsProhibited acts, civil penalties, and criminal penalties under the Home Improvement LawMaryland Door-to-Door Sales Act cancellation rights and notice requirementsSalesperson conduct, contractor-salesperson relationships, and advertising requirements
Door-to-Door Sales Act
10 Q · 29%
Definition of door-to-door sale and key statutory termsTransactions exempt from the ActCancellation rights and deadlines for home improvement contracts (including age-based extensions for buyers 65+)Required content and form of the Notice of CancellationSeller disclosure and identification requirements at initial contactSeller obligations upon receipt of a valid cancellation noticeUnlawful practices constituting unfair or deceptive trade actsCivil liability and criminal penalties for violations
Key Distinctions
Standard door-to-door cancellation period (buyer under 65)vsSenior cancellation period (buyer at least 65)
A buyer under 65 may cancel a home improvement contract until midnight of the 5th business day after the transaction, while a buyer who is at least 65 years old gets until midnight of the 7th business day.
Maryland Door-to-Door Sales Act, §14-302.1(1)-(2)Cancellation deadline (5 or 7 business days)vsSeller's refund deadline (10 business days)
The buyer's time to cancel varies with age (5 business days, or 7 if at least 65), but the contractor must refund all payments within 10 business days after receiving the cancellation notice regardless of the buyer's age.
Maryland Door-to-Door Sales Act, §14-302(7)Notice of Cancellation for a home improvement contractvsNotice of Cancellation for a general door-to-door sale
For home improvement contracts the Notice of Cancellation must be on a separate form that is not part of the contract, whereas under the general door-to-door rule the notice is attached to the contract (with statements in 10 point boldface type).
Maryland Title 14, Subtitle 3, Section 14-302.1(2)(i)First conviction for unlicensed contracting/sellingvsSecond or subsequent conviction
A first conviction is a misdemeanor carrying up to 6 months incarceration and up to a $1,000 fine; each subsequent conviction carries up to 2 years incarceration and up to a $5,000 fine.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 6 - Prohibited Acts and PenaltiesWork performed by a licensed MHIC contractorvsWork performed by an unlicensed individual
The Home Improvement Guaranty Fund compensates homeowners only for actual losses caused by licensed contractors; a homeowner who hires an unlicensed contractor cannot collect from the Fund.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 4 - Home Improvement Guaranty FundSalesperson representing multiple contractorsvsSalesperson during an actual sales presentation
A salesperson may represent no more than 2 contractors at a time, but while actually selling a home improvement during a presentation may represent, advertise, or offer the services of only a single contractor and must use that contractor's named contract form.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-310Home improvement workvsBasic maintenance (e.g., snow removal, lawn care)
The Commission treats work as home improvement if it adds value to the residence and would typically remain part of the property if sold, which distinguishes it from basic maintenance activities.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 1 - Definitions and General Provisions (Commission interpretation criteria)Transactions covered by the Home Improvement LawvsGovernment-party transactions
Per §8-102 the Home Improvement Law does not apply to transactions involving the United States or an instrumentality of the United States, or a state or an instrumentality or political subdivision of a state (e.g., the State-owned Governor's mansion).
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-102Transactions covered by the Door-to-Door Sales ActvsExempt transactions
The Act covers personally solicited sales of consumer goods/services of $25 or more made away from the seller's place of business, but does not apply to the sale or rental of real property, the sale of insurance, or the sale of securities or commodities by a registered broker-dealer.
Maryland Door-to-Door Sales Act, §14-301.1(6)Failing to inform the buyer orally of the right to cancel (§14-302(5))vsMisrepresenting the right to cancel (§14-302(6))
These are distinct violations: a correct oral disclosure followed by a written document stating a wrong (shorter) cancellation period is a misrepresentation under subsection (6), not a failure to inform under subsection (5).
Maryland Title 14, Subtitle 3, Section 14-302(6)Required home improvement contract elementsvsPerformance bond
The contract must include the contractor's name, address and MHIC license number, approximate start and completion dates, and a consumer notice with the Commission's phone number; a performance bond is not required, the contract need only inform the homeowner of the right to request one.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 5 - Home Improvement ContractsGuaranty Fund claim stayed by mandatory arbitrationvsGuaranty Fund claim waived
An arbitration clause must disclose that a Guaranty Fund claim is stayed only until the mandatory arbitration proceeding is completed — it is not permanently waived — and the clause must be initialed and dated by the parties.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 5 - Mandatory ArbitrationGuaranty Fund claim not exceeding $7,500vsLarger or contested claims
For claims of $7,500 or less the Commission may, after review and investigation, issue a proposed order to pay all or part of the claim without a formal hearing; otherwise it may dismiss a meritless claim or schedule a hearing.
NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 4 - Home Improvement Guaranty Fund ($7,500 proposed order provision)Key Terms
Door-to-door sale (§14-301(d)) Maryland Door-to-Door Sales Act, §14-301(d)
A sale, lease, or rental of consumer goods or consumer services with a purchase price of $25 or more in which the seller personally solicits the sale and the buyer's agreement is made at a place other than the seller's place of business.
Purchase price (§14-301(h)) Maryland Door-to-Door Sales Act, §14-301(h)
The total price paid or to be paid for the consumer goods or services, including all interest and service charges, counted toward the $25 threshold.
Business day (§14-301(b)) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), §14-302.1(1), §14-301(b)
Any calendar day except Sunday and specified federal holidays; Saturday counts as a business day.
Notice of Cancellation (§14-302.1(2)(i); §14-302(2)(ii)) Maryland Title 14, Subtitle 3, Section 14-302.1(2)(i)
The cancellation form given to the buyer, which for a home improvement contract must be on a separate form not part of the contract and which in a standard door-to-door sale must contain information and statements in 10 point boldface type in the contract's language.
Written acknowledgment of cancellation rights (§14-302.1(4)(i)) Maryland Door-to-Door Sales Act, §14-302.1(4)(i)
For home improvement contracts, a buyer-signed statement that the buyer received oral notice of the right to cancel within 5 business days (7 if at least 65), including a checkbox indicating whether the buyer is at least 65; failure to obtain it is an unfair or deceptive trade practice.
Solicitor identification requirement (§14-302(10)(iv)) Maryland Door-to-Door Sales Act, §14-302(10)(iv)
At first contact the solicitor must reveal identity and trade name before any other statement and must show and display identification stating the solicitor's identity, the trade name of the person represented, and the business address of one of the persons identified.
Ruse / misrepresentation of status (§14-302(11)) Maryland Title 14, Subtitle 3, Section 14-302(11)
Any plan, scheme, or ruse that misrepresents the solicitor's true status or mission to make a sale at a buyer's residence, which is an unfair or deceptive trade practice.
Confession of judgment clause (§14-302(4)) Maryland Title 14, Subtitle 3, Section 14-302(4)
A prohibited contract or receipt provision; including a confession of judgment or any waiver of the buyer's rights under the Act, including the right to cancel, is an unfair or deceptive trade practice.
Willful violation penalty (§14-305) Maryland Door-to-Door Sales Act, §14-305
A willful violation of the Door-to-Door Sales Act is a misdemeanor subject on conviction to a fine of not more than $1,000 or imprisonment of not more than one year, or both, in addition to injunctive relief under Title 13, Subtitle 4.
Assignment of buyer's note (§14-302(8)) Maryland Title 14, Subtitle 3, Section 14-302(8)
It is an unlawful practice to negotiate, transfer, sell, or assign a note or other evidence of indebtedness to a finance company or third party before midnight of the fifth business day after the contract was signed.
Trade experience requirement (§8-302.2) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-302.2
A contractor license applicant must have at least 2 years of trade experience satisfactory to the Commission or comparable educational training as determined by Commission regulations; passing the exam alone is not enough.
Home Improvement Guaranty Fund NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 4 - Home Improvement Guaranty Fund
A fund that compensates homeowners for actual losses caused by licensed contractors, with contractor reimbursement plus 10% annual interest and unpaid debts referred to the Central Collection Unit.
Mortgage or lien notice (Subtitle 5) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 5 - Mortgage or Liens
When payment will be secured by an interest in residential real estate, the first page of the contract must state: "This contract creates a mortgage or lien against your property to secure payment and may cause a loss of your property if you fail to pay the amount agreed upon," and must inform the homeowner of the right to consult an attorney and to rescind within 3 business days.
Mandatory arbitration clause requirements (Subtitle 5) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 5 - Mandatory Arbitration
An arbitration clause must state the name of the person or organization conducting arbitration, whether mandatory fees are charged, a fee schedule, whether findings are binding, and disclose that a Guaranty Fund claim will be stayed until arbitration is completed; it must be initialed and dated by the parties.
Consumer notice in contract (Subtitle 5) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, Subtitle 5 - Consumer Notice
A required contract notice informing homeowners that formal mediation of disputes is available through the Maryland Home Improvement Commission, and mentioning the Guaranty Fund and the homeowner's right to request a performance bond.
Contractor liability for salesperson violations (§8-311(b)) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-311(b)
The Commission may reprimand a contractor or suspend/revoke the license for a salesperson's violation unless it finds the contractor or management personnel had no knowledge of the wrongful conduct or could not prevent the violation.
Salesperson disclosure duty (§8-310(b)) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-310(b)
Before becoming a salesperson for a contractor, the individual must tell that contractor the name of each other contractor for whom the individual currently is a salesperson, and tell each current contractor the name of the new contractor.
Notice of change (§8-309) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-309
A licensee must notify the Commission within 10 days of a change of control in ownership, management, address, or trade name.
Conviction-review factors (§8-311(d)) NASCLA Contractors Guide, Maryland Home Improvement (7th ed.), Chapter 1 — Maryland Home Improvement Law and Regulations, §8-311(d)
Factors the Commission must weigh for an applicant with a conviction: nature of the crime, its relationship to activities authorized by the license, relevance of a felony conviction to fitness and qualification, whether the crime is directly related to the applicant's fitness and qualification to provide home improvement services, time since conviction, and behavior before and after.
Formulas to Know
Maximum deposit a contractor may accept
Max deposit = 1/3 × contract price (e.g., $60,000 × 1/3 = $20,000); no payment may be accepted until the contract is signedCounting the cancellation deadline in business days
Start the day after the transaction and count every calendar day except Sunday and specified federal holidays (Saturday counts); 5 business days for buyers under 65, 7 for buyers at least 65 — e.g., Wednesday sale: Thu(1), Fri(2), Sat(3), Mon(4), Tue(5) → cancel prior to midnight of the following TuesdayRefund deadline after cancellation
Within 10 business days of receipt of a valid cancellation notice: refund all payments, return traded-in goods/property, and cancel and return any negotiable instrumentsSeller's deadline to retrieve goods left at the buyer's residence
If buyer makes goods available and seller does not pick them up within 20 days of the date of the cancellation notice, buyer may retain or dispose of them without further obligationGuaranty Fund reimbursement owed by the contractor
Amount paid from the Fund + interest at an annual rate of 10%; unpaid debts referred to the Central Collection UnitProportionate payment of multiple claims against one contractor
When total approved claims against one contractor exceed the $250,000 maximum, each claimant may be paid the same percentage of their claim; unsatisfied approved claims are paid if the contractor later reimburses the FundFund maintenance assessment on contractors
If the Fund balance falls below $1,000,000, the Commission may assess each contractor $50, but not more than $150 per calendar yearMaximum civil penalty
Up to $5,000 per violation, whether or not the person is licensed, instead of or in addition to reprimand, suspension, or revocationNonresident applicant fee
Pay the fee imposed by the applicant's state of incorporation/principal office on a similar nonresident business if that fee is higher than the Commission's application feeHearing timeline after license denial
Applicant may request a hearing within 10 days after the notice of denial is mailed; the Commission must hold the hearing within 30 days after receiving the requestExam retake waiting periods and score validity
Wait 30 days after the first failure (study-guide summary; COMAR 09.08.01.16(C) states 21 days) and 60 days after each subsequent failure; a passing score is valid 2 years, after which the exam must be retaken before applying