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How to Hire a Licensed Contractor in Maryland: What MHIC Means

Maryland requires home improvement contractors to be licensed through the Maryland Home Improvement Commission (MHIC). It's one of the stronger consumer protection programs in the country — but only if you actually check. Here's what the license means, how to verify it, and what to look for before signing a contract.

What Is an MHIC License?

The Maryland Home Improvement Commission (MHIC) license is a state-issued credential required for any contractor performing home improvement work in Maryland valued at $500 or more. It's administered by the Maryland Department of Labor and covers contractors doing renovations, additions, and improvements to residential properties.

To get an MHIC license, a contractor must pass a written examination, carry required insurance, and post a surety bond. The license must be renewed regularly, and contractors can lose it for consumer complaints, fraud, or failure to complete work.

PRG Home Improvement holds MHIC License #113057, which has been active and in good standing since 2017.

Why Does the MHIC License Matter?

Hiring an unlicensed contractor in Maryland isn't just risky — it can cost you significantly more than the project itself.

  • No license, no permits: Only licensed contractors can pull permits on your behalf. Unlicensed contractors often skip permits entirely, leaving you with unpermitted work that complicates resale and can require expensive remediation.
  • No recourse if something goes wrong: If an unlicensed contractor disappears mid-project or does shoddy work, you have limited legal options. MHIC-licensed contractors are bonded, and the state maintains a Guaranty Fund that can compensate homeowners in cases of contractor fraud or abandonment.
  • Insurance gaps: Licensed contractors are required to carry general liability insurance. If an unlicensed worker is injured on your property, you may be liable.
  • Code compliance: Licensed contractors know current building codes and are accountable for meeting them. Unlicensed work is more likely to fail inspection or create safety hazards.

How Do You Verify an MHIC License?

The Maryland Department of Labor maintains a public MHIC license lookup tool at dllr.state.md.us. You can search by contractor name, business name, or license number. Before signing any contract, verify:

  1. The license is active — not expired, suspended, or revoked
  2. The license is in the contractor's name or business name — not a different entity
  3. There are no disciplinary actions on record

Any reputable contractor will give you their MHIC number without hesitation. If a contractor is vague about their license number or discourages you from looking it up, that's a red flag.

What Should a Maryland Home Improvement Contract Include?

Maryland law requires MHIC-licensed contractors to provide a written contract for any job over $500. The contract must include specific items by law:

  • The contractor's name, address, and MHIC license number
  • A detailed description of the work to be performed
  • The total price and payment schedule
  • Start and estimated completion dates
  • A list of materials to be used (type, brand, grade)
  • Notice of your right to cancel within 3 business days (for contracts signed at your home)

If a contractor hands you a vague one-page agreement or resists putting specifics in writing, walk away.

What Are Red Flags When Hiring a Contractor?

  • Unusually low bids: A bid that's 30–40% below others isn't a deal — it usually means corners will be cut, inferior materials will be used, or the contractor will come back asking for more money mid-project.
  • Pressure to decide immediately: Legitimate contractors don't pressure you. "This price is only good today" is a sales tactic, not how reputable businesses operate.
  • Cash-only or large upfront deposits: Maryland limits the upfront deposit a contractor can require. Requests for large cash payments before work begins are a serious warning sign.
  • No physical address: Contractors who only list a PO box or no address at all are harder to hold accountable if problems arise.
  • No online presence or reviews: Most established contractors have Google reviews, a BBB profile, or a website. An absence of any online footprint warrants additional scrutiny.
  • Discouraging permits: Any contractor who suggests skipping permits "to save money" is putting you at risk and likely isn't licensed.

What Questions Should You Ask Before Hiring?

  • What is your MHIC license number? (Then verify it yourself.)
  • Are you carrying general liability and workers' compensation insurance? Can I see the certificates?
  • Will you pull all required permits for this project?
  • Who will be on-site doing the work — your own employees or subcontractors?
  • Can you provide references from similar projects in the last 12 months?
  • What is your payment schedule, and what does each payment correspond to?

Why Work With PRG Home Improvement?

PRG Home Improvement (MHIC #113057) has been serving Anne Arundel and Howard Counties since 2017. We're BBB A+ accredited, fully insured, and handle all permitting as part of every project. We put everything in writing and don't ask for large upfront deposits. Learn more about us, browse our services, or contact us for a free estimate.

Frequently Asked Questions

Is an MHIC license the same as a contractor's license?

In Maryland, the MHIC license is the primary license for residential home improvement contractors. It's different from a specialty trade license (like a master electrician or master plumber license), which trades also need. A general contractor doing a full remodel should have an MHIC license; any subcontractors doing electrical or plumbing should have their own trade licenses.

What is the MHIC Guaranty Fund?

The MHIC Guaranty Fund compensates Maryland homeowners who suffer financial loss due to fraud, abandonment, or incomplete work by a licensed contractor. Claims are capped, but the fund provides a meaningful safety net that doesn't exist when you hire unlicensed contractors.

Can I check a contractor's complaint history in Maryland?

Yes. The MHIC license lookup tool shows disciplinary actions and complaint history. You can also check the BBB for complaint records and resolution history.

What's the maximum deposit a contractor can require in Maryland?

Maryland law limits upfront deposits for home improvement contracts. Generally, contractors cannot require more than one-third of the contract price as a deposit before work begins. Be cautious of any contractor requiring more than this upfront.

Do I need a licensed contractor for small jobs?

Any home improvement project valued at $500 or more requires an MHIC-licensed contractor in Maryland. Below that threshold, the licensing requirement technically doesn't apply — but for any meaningful work on your home, hiring a licensed, insured contractor is still the right call.