How to Verify a Maryland Home Improvement Contractor Before You Hire

You can verify any Maryland home improvement contractor in under a minute. Go to labor.maryland.gov/pq, search by the business name or MHIC license number, and confirm the status reads “Active.” If the status is expired, suspended, or revoked, the contractor is not authorized to perform home improvement work in Maryland.

What an MHIC license is

The Maryland Home Improvement Commission (MHIC) license is required for any person or company performing home improvement work on a Maryland residence for $500 or more. The Commission is part of the Maryland Department of Labor and regulates contractors under Business Regulation Title 8.

To get licensed, a contractor must:

• Pass a state exam and submit a complete application
• Carry at least $500,000 in general liability insurance (required as of June 1, 2024)
• Pay license fees and a Guaranty Fund assessment

The license covers the business entity. When a contractor’s insurance lapses, the license lapses with it. Subcontractors hired under a licensed MHIC contractor may work without their own MHIC license, but the licensed contractor is responsible for that work.

How to do the lookup: step by step

1. Go to labor.maryland.gov/pq
2. Select “Home Improvement Contractor” from the license type list
3. Search by business name, trade name, personal name, license number, or city
4. Confirm the result shows all of these:
   • Status: Active
   • An expiration date that extends past your project’s expected end date
   • A business address consistent with what the contractor provided

If a name search returns no result, ask the contractor for their MHIC license number and search by that directly. A contractor who cannot produce their number is a red flag.

Renovexus shows the MHIC number and check date on every contractor profile listed on this site.

What the contract must include

Under Maryland law, every home improvement contract must be in writing and signed by both the contractor and the homeowner before work begins. The contract must include:

• The contractor’s full name, address, phone number, and MHIC license number
• The name and license number of any salesperson who solicited the work
• A description of all work to be performed and materials to be used
• The total price and the complete payment schedule
• Approximate start and completion dates
• Warranty terms and their duration
• A notice about the MHIC Guaranty Fund and homeowner protections

Any change to scope or price after signing requires a written change order signed by both parties. Verbal agreements to add work or adjust the price are not enforceable under Maryland law.

The deposit rule

Maryland Business Regulation Section 8-617 caps upfront deposits at one-third of the total contract price. No payment of any kind is permitted before the contract is signed by both parties.

If your kitchen remodel contract totals $60,000, the maximum deposit is $20,000. Progress payments beyond that are negotiable, but no contractor can require more than one-third before the contract is in place.

A contractor who demands more than one-third up front, or who asks for payment before signing, is in violation of state law. Violations carry civil penalties up to $5,000 per incident.

The MHIC Guaranty Fund

Maryland’s Guaranty Fund compensates homeowners for actual monetary losses caused by poor workmanship or a contractor’s failure to complete contracted home improvement work. The fund is supported by licensing assessments paid by contractors when they obtain or renew their MHIC license.

Key limits:

• Maximum per claimant: $30,000, or the amount you paid the contractor, whichever is less
• Maximum per contractor: $250,000 across all claimants combined; if total claims exceed this, payments are prorated

The Fund covers costs for restoration, repair, replacement, or completion that arise from unworkmanlike, inadequate, incomplete, or abandoned work. It does not cover:

• Consequential damages (such as temporary housing or lost use of a room)
• Attorney fees or court costs
• Work performed by an unlicensed contractor
• Claims filed more than three years after discovering the loss

To be eligible, you must reside in the home where the claim arises and own no more than three residences. Claims over $7,500 require an administrative hearing.

Red flags worth pausing on

These patterns appear repeatedly in Maryland contractor disputes:

• No MHIC license number on the estimate, contract, or advertisement
• Status on the state lookup shows expired, suspended, or not found
• Request for more than one-third of the total contract price as a deposit before work starts
• Any request for payment before both parties have signed the contract
• Pressure to skip permits or to keep the project undocumented
• No written contract, or a contract missing required elements
• A business address that is only a P.O. box

What you lose without a licensed contractor

Using an unlicensed contractor removes the protections that exist under Business Regulation Title 8:

• The contract may be legally unenforceable
• You are not eligible to file a Guaranty Fund claim; the Fund covers only work done by licensed contractors
• If a worker is injured on your property and the contractor carries no insurance, you may face liability
• Insurance claims tied to work done by an unlicensed contractor may be denied

The MHIC lookup takes 60 seconds. Run it before you sign anything.

FAQ

What work requires an MHIC license in Maryland?

Any home improvement on a Maryland residence for $500 or more requires the contractor to hold an active MHIC license. This includes kitchen and bathroom remodels, basement finishing, roofing, siding, and additions. It does not apply to new construction on a previously vacant lot or to condominium common areas.

Does a subcontractor need their own MHIC license?

As of July 1, 2016, subcontractors working under a licensed MHIC contractor do not need their own MHIC license. The licensed general contractor bears responsibility for the subcontractor’s work. If a homeowner hires a subcontractor directly, without going through a licensed contractor, that subcontractor must hold their own MHIC license.

What if the contractor’s license is expired?

An expired license means the contractor is not currently authorized to work. Ask them to renew before you sign anything. Starting work with a contractor whose license has expired disqualifies you from the Guaranty Fund even if the resulting work turns out to be deficient.

Can I file a Guaranty Fund claim if I paid cash?

Yes, but you must document the payment. Bank statements showing cash withdrawals, receipts, or other evidence are required when filing. Claims must be submitted under oath with the original contract, proof of payment, and all supporting documents. Undocumented cash payments are harder to recover.

This guide is for general information only and is not legal advice. Requirements depend on the specifics of your project and contractor relationship. Contact the Maryland Home Improvement Commission at 410-230-6231 or 1-888-218-5925 with questions about your situation.

Looking for a Maryland contractor whose MHIC license has already been checked and dated? Find one on Renovexus.

Sources

1. Maryland Home Improvement Commission (MHIC) labor.maryland.gov
2. MHIC Guaranty Fund FAQs labor.maryland.gov
3. Maryland Business Regulation Title 8, Section 8-617 law.justia.com
4. How to Check a Contractor License in Maryland checklicensed.com
5. Maryland Home Improvement Law: Licenses, Contracts and Rules legalclarity.org