Remodeling

Before hiring a contractor, please check the listings online or contact the Maryland Department of Labor, Licensing, and Regulations to verify whether the contractor has a Maryland Home Improvement Commission (MHIC) license and the required general liability insurance coverage, surety bond, and workers’ compensation coverage.

Each year, unlicensed home improvement contractors defraud Maryland homeowners of millions of dollars. Many pose as licensed contractors but lack the required licenses and insurance. Worse, they can damage a customer’s home instead of repairing it, leaving the homeowner with unexpected expenses that may exceed the cost of the original work. These situations often cause unnecessary financial strain and stress.

Licensed contractors, on the other hand, are easier to hold accountable. If a licensed contractor abandons a project after receiving a deposit, homeowners may recover funds through the MHIC Guaranty Fund, which pursues the contractor legally and allows the homeowner to hire a new licensed professional to complete the work.

Unlicensed contractors often prey on vulnerable customers, especially after natural disasters such as hurricanes, tornadoes, floods, or earthquakes. They may offer fast repairs, collect a large deposit—sometimes 50% instead of the standard one-third—and then disappear, leaving the homeowner with no recourse for justice.

Sometimes, customers knowingly hire unlicensed contractors for a lower price, or based on reputation or referrals. While some unlicensed contractors may provide quality work, many claim to be “licensed” when they only hold a business license, not the required MHIC license. Even with insurance or other licenses, contractors who renovate or rebuild homes or apartments with three units or fewer must hold an MHIC license, in addition to other required licenses and insurance. Exceptions include carpet installation, water mitigation, demolition, new home construction, larger apartment complexes, and commercial buildings.

Since the Maryland Home Improvement Commission licenses and regulates Maryland home improvement contractors, subcontractors, and salespersons, hiring a properly licensed contractor is crucial. While an unlicensed contractor may initially seem like a bargain, it can end up costing far more in the long run due to shoddy work or the need to hire another contractor to finish or redo the job.