In Maryland, every type of home improvement work, from selling projects to performing the actual construction, falls under the oversight of the Maryland Home Improvement Commission (MHIC). The commission handles licensing for the industry so homeowners can feel confident that the professionals they hire have a baseline of skill and experience. Below, we walk through each stage of the licensing process so you know exactly what to expect.
Step 1: Confirm Your Eligibility
Before anything else, check that you qualify for this license. One key requirement is proof of experience: the MHIC expects you to document at least two years of relevant work in construction or home improvement.
You’ll also need to register your business name with the Maryland Department of Assessments and Taxation. This registration allows you to operate legally in Maryland, and it sets you up to handle your tax responsibilities once your home improvement company is up and running.
Step 2: Prepare With a Dedicated Study Program
The licensing exam is open book and made up of 55 multiple-choice questions. To pass, you need a score of 71%, which means answering at least 39 questions correctly. That may sound manageable, but walking in unprepared is a common way to fall short. A solid exam prep course can make sure you’re ready on test day.
Look for a course that draws on both the MHIC’s own guidebook and material from the National Association of State Contractors Licensing Agencies (NASCLA). NASCLA’s Contractor’s Guide to Business, Law, and Project Management serves as the foundation for many of the questions you’ll see.
Topics covered on the exam include:
- Maryland home improvement laws
- The Door-to-Door Sales Act
- Safety regulations
- Labor and payroll laws
- Financial management, such as estimating and bookkeeping
Choose a program that addresses all of these subjects along with related areas. Thorough preparation not only helps you pass the exam but also gives you knowledge you’ll rely on when running your home improvement business.
Step 3: Sit for the Licensing Exam
After you’ve met the eligibility requirements, reach out to PSI Examination to book your test. PSI administers the exam on computer, and you’ll have two hours to finish. The exam fee is $63.
Step 4: Prove Your Financial Stability
Maryland requires you to show that you can financially support a home improvement business before you open it. Part of this is submitting a certificate of insurance for general liability coverage, with a minimum of $50,000 that you must keep in place.
You’ll also need to demonstrate financial responsibility by providing bank statements, a personal credit report, and a personal financial statement. If the MHIC decides you don’t meet its financial responsibility standards, you can satisfy the requirement by obtaining a surety bond ranging from $30,000 to $100,000.
Launching Your Career as a Home Improvement Contractor
Once you’ve confirmed your eligibility, prepared for and passed the exam, and documented your financial stability, you’ll be well on your way to earning your Maryland home improvement license. Taking each step carefully will help you start this new career path with confidence and keep your business on solid footing for years to come.