Maryland Home Improvement Salesperson (MHIC)

Key Concepts

What Counts as Home Improvement

Home improvement is any alteration, remodeling, repair, renovation, or construction to an existing owner-occupied residential property of 1–4 units, including a garage, swimming pool, or any structure adjacent to the dwelling. New construction is excluded. Work on investment/rental properties not occupied by the owner is also excluded.

Excluded (Exempt) Work

• New home construction
• Work costing under $500 (labor + materials combined)
• Work by owners on their own property
• Work by persons already licensed under another Maryland licensing law for that specific trade (e.g., licensed plumbers, electricians) when working solely within that trade

Maryland Home Improvement Commission (MHIC) Structure

• 9 commissioners appointed by the Governor: 5 licensed contractors, 4 public members
• Commissioners serve 4-year staggered terms
• The Commission operates under the Maryland Department of Labor
• Commission may adopt regulations, issue/revoke licenses, hold hearings, and assess penalties
• Meets publicly; records are available to the public

Contractor Licensing Requirements

• Must carry general liability insurance (minimum required)
• Must demonstrate experience or education in home improvement
• Must pass the licensing exam
• License must be renewed every 2 years
• Salespersons are licensed separately; they may not operate independently — they must be affiliated with a licensed contractor

Salesperson Licensing

• A home improvement salesperson license is required to solicit or sell home improvement contracts on behalf of a contractor
• Salespersons work for and under the licensed contractor — the contractor is responsible for the salesperson's conduct
• Application requires: completed form, fee, and affiliation with a licensed contractor
• Salespersons cannot hold a contractor's license simultaneously in the same capacity

Home Improvement Guaranty Fund

• Funded by contractor license fees
• Consumers who suffer financial loss due to an unlicensed contractor or a licensed contractor's failure to perform may file a claim
• Maximum award: $20,000 per claimant / $40,000 per contractor (aggregate across all claims against one contractor)
• Claimant must obtain a court judgment first before filing a Fund claim
• After the Fund pays a claim, the contractor must reimburse the Fund; failure results in license suspension

Key Concepts

Definition of a Door-to-Door Sale A door-to-door sale is a consumer sale of goods or services with a purchase price of $25 or more, made at a location other than the seller's permanent business address (e.g., the buyer's home, workplace, or any temporary location).

Cancellation Rights — The Core Rule A buyer has the right to cancel a door-to-door home improvement contract until midnight of the third business day after the date of the transaction. For buyers age 65 or older, this window is extended to midnight of the seventh business day.

Notice of Cancellation — Required Form & Content The seller must provide the buyer with two copies of a completed Notice of Cancellation at the time of sale. The notice must: - Be on a separate document (not buried in the contract) - Be in 10-point bold type - State the date of the transaction - State the date by which cancellation must be sent (the third or seventh business day deadline) - Explain the buyer's right to cancel and the method for doing so - Be written in the same language used in the sales presentation

The buyer cancels by mailing or delivering the signed notice to the seller's address listed on the notice. Cancellation is effective when mailed, not when received.

Seller Identification at Initial Contact At the start of any solicitation, the salesperson must: - Identify themselves by name - State the name of the company they represent - Clearly state the purpose of the visit (to sell home improvement services)

Failure to identify is an unlawful practice. The seller cannot misrepresent their identity or affiliation.

Seller Obligations After Valid Cancellation Within 10 business days of receiving a valid cancellation notice, the seller must: - Return any payments or deposits made by the buyer - Return any goods or property traded in - Cancel and return any negotiable instrument (e.g., check, promissory note)

The seller may not retain any fee or deposit after a valid cancellation. The seller must also retrieve any goods left with the buyer within 20 business days; if they fail to do so, the buyer may retain them without obligation.