Hiring a Contractor

Does a contractor have to be licensed in Maryland?

Yes. Home improvement work on residential property in Maryland requires a license from the Maryland Home Improvement Commission, part of the Maryland Department of Labor. The license number has to appear on your contract, and if a salesperson sold you the job, their name and license number belong there too.

An unlicensed contractor is not a bargain. Hiring one puts you outside every protection described on this page, including the Guaranty Fund, and it is the single most expensive decision a homeowner can make on a renovation.

How do I check that a license is real and current?

Search the Maryland Department of Labor licensing queries portal by last name, trade name, or license number. It returns the license status, the expiration date, and any disciplinary history.

Match the name on the license against the name on the contract and the name on the check. A license held by one entity does not cover work contracted through a different one. If you would rather ask a person, MHIC takes calls on 410-230-6231 and 1-888-218-5925.

What is the Guaranty Fund, and does it actually protect me?

MHIC administers the Home Improvement Guaranty Fund, which can compensate a homeowner for actual loss caused by a licensed contractor: work that was unworkmanlike, incomplete, or abandoned. Recovery is limited to what you paid the contractor, up to $30,000 per claim. If total claims against one contractor exceed $250,000, awards are pro-rated among the claimants.

Two things are worth understanding. It covers actual loss, meaning the cost to repair, replace or finish the work, rather than inconvenience. And it applies only to licensed contractors. That one fact is the strongest argument there is for spending ten minutes on the license check.

What insurance should I ask to see?

General liability and workers compensation, both current through your project dates. Ask for the certificate of insurance to come from the insurer or the agent directly rather than as a photograph forwarded by the contractor, and ask to be named as certificate holder so you are notified if the policy lapses mid-job.

If somebody is injured on your property while working for an uninsured contractor, the exposure can land on you and your homeowners policy. This is the check people skip because it feels awkward to ask. Ask anyway. Every established contractor has the certificate ready and expects the question.

My house is older. What is EPA lead certification and do I need it?

If your home was built before 1978 and the work will disturb painted surfaces, the firm doing it has to be EPA lead-safe certified and has to have a certified renovator overseeing the job. Before work begins they must give you the EPA's Renovate Right pamphlet and have you sign that you received it.

Certification changes how the job is actually run: the work area is contained, warning signs go up, dust and debris are cleaned and disposed of properly, and the cleanup is verified rather than assumed. In Baltimore, where so much of the housing stock predates 1978, this comes up on most projects rather than a few.

Are electrical, plumbing and HVAC licensed separately?

Yes. Those trades carry their own licensing, separate from the home improvement license. In Baltimore City, electrical, gas, HVAC and refrigeration, and plumbing work has to be performed by a contractor licensed for that trade.

Ask who performs the trade work and under whose license it is pulled. A general contractor coordinating licensed subcontractors is normal and expected. A general contractor rewiring your panel himself is not.

How many bids should I get?

Three, from licensed contractors. Fewer leaves you without a reference point. More tends to produce noise rather than clarity, and scheduling them stretches the process by weeks.

Why are my three bids thousands of dollars apart?

Almost always because they were priced against three different scopes, not because two of them are dishonest. One included the electrical panel and two did not. One allowed eight dollars a square foot for tile and another allowed three. One assumed the subfloor is sound and one priced replacing it.

Put the bids side by side and compare them line by line before you compare totals. Where a line appears in one bid and not another, ask both contractors about it. Where a number is an allowance rather than a chosen product with a real price, treat it as a placeholder that will move.

Should I take the lowest bid?

Only once you understand why it is the lowest. The cheapest number is usually the smallest scope, and the gap has a way of reappearing later as change orders. A bid far below the others deserves one direct question: what is not in this price?

What should a written estimate contain?

Enough detail that you could argue with it. If you cannot tell from the estimate what you are buying, neither can the contractor, and the two of you will find that out halfway through.

• The scope broken down by area or by trade, specific enough to check against the finished work.
• Materials named, with model numbers where they matter, and every allowance labeled as an allowance.
• Exclusions stated plainly, so you know what this price does not cover.
• Approximate start and substantial completion dates.
• The payment schedule, and a clear statement of who pulls the permits.

Should I have to pay for an estimate?

A walkthrough and a ballpark number are normally free. Detailed design work, drawings, engineering, or a fixed price developed from a full site investigation cost the contractor real time, and being asked to pay for that is often a sign you are dealing with somebody serious. What matters is knowing which of the two you are getting before they arrive.

What should I ask during the walkthrough?

The answers matter less than the willingness to answer. A contractor who deflects all seven of these at the quoting stage will not be easier to reach once the job is running.

• Who is on site every day, and are they your employees or subcontractors?
• How many other jobs will you be running at the same time as mine?
• Who do I call when something is wrong, and how quickly do you answer?
• What could delay this job?
• What do you do when you open a wall and find something unexpected?
• What does your warranty cover, and for how long?
• Can you give me the addresses of three jobs like this you finished in the last year?

What does Maryland require a home improvement contract to contain?

It has to be in writing, legible, and signed by every party. It has to carry the contractor's name, address and MHIC license number, plus the name and license number of any salesperson who sold the job. It has to describe the work to be performed and the materials to be used, and give the approximate dates when work will begin and when it will be substantially complete.

It also has to carry notices: MHIC's phone numbers along with a statement that every contractor must hold a current license, notice that the Guaranty Fund may compensate homeowners for certain actual losses, and notice of your right to buy a performance bond.

If the contract you are handed is missing these, that is not paperwork pedantry on your part. It is an early and reliable signal about how the rest of the job will be run.

How much deposit is reasonable, and is there a limit?

Maryland sets the ceiling: a contractor cannot accept more than one third of the contract price as a deposit, and cannot accept any payment at all before the contract is signed. A demand for half up front is not a negotiating position, it is a violation.

Below that ceiling the deposit is negotiable. On a job with long lead materials a larger deposit can be entirely reasonable, and the contract should say what it is buying.

What should the payment schedule look like?

Tie payments to completed stages rather than to calendar dates, so a slow month costs the contractor rather than you. On a typical renovation that means something close to mobilization and demolition, rough-ins passed inspection, drywall complete, substantial completion, and a final payment released when the punch list is closed.

Hold the last five to ten percent until the punch list is genuinely finished. It is the only leverage that reliably gets small items done quickly, and any contractor worth hiring expects it.

Can I cancel after I sign?

If the contract was sold to you at your home rather than at the contractor's place of business, Maryland's Door-to-Door Sales Act generally lets you cancel until midnight of the fifth business day, or midnight of the seventh day if you are at least 65 years old.

Outside of that, cancellation is governed by what the contract says, which is a good reason to read the termination clause before you sign rather than after.

How should change orders work?

In writing, priced, and signed before the work happens. Every change order should state what changed, what it costs, and how many days it adds to the schedule.

Verbal change orders are the most common source of dispute we see on residential work. Both sides remember the conversation, both remember it differently, and there is nothing to check it against.

What is a lien release and why does it matter to me?

Subcontractors and suppliers who go unpaid can, in some circumstances, pursue a claim against your property even though you paid your contractor in full. A lien release is a signed acknowledgement that they have been paid.

Ask for releases from the contractor and from any subcontractor or supplier paid through them, with each progress payment and again at closeout.

Should the contract include a warranty?

Yes, in writing. It should say what is covered, how long the coverage runs, and how to make a claim. Manufacturer warranties on windows, roofing, appliances and fixtures are separate from the contractor's workmanship warranty, and you should receive that paperwork at closeout.

Who pulls the permit, me or the contractor?

The contractor, in nearly every case, and the contract should say so. In Baltimore City, contractors register their license in the ePermits system before they can be attached to your permit, so have their name and license number to hand when you apply.

If a contractor asks you to pull the permit as the homeowner, ask why. It moves responsibility for the work, and for anything an inspector finds, onto you.

Does this job actually need a permit?

Structural changes, additions, and electrical, plumbing and mechanical work generally do. Genuinely cosmetic work generally does not. The line moves depending on what you are touching, so check rather than assume.

In Baltimore City permits sit with the Department of Housing and Community Development, which answers questions at [email protected] and 443-984-1809. Baltimore County and the surrounding counties run their own systems with their own thresholds.

What happens if work gets done without a permit?

It surfaces later, at the worst possible time: when you sell, when you refinance, or when you file an insurance claim after something fails. Putting it right can mean applying retroactively and opening finished walls so an inspector can see what is behind them.

There is a quieter cost too. Unpermitted work is, by definition, work that nobody independent ever checked.

How do inspections affect the schedule?

Inspections gate the stages. Rough-in electrical and plumbing have to pass before the walls close, so a failed inspection or a slow scheduling week pushes everything behind it.

Ask your contractor which inspections sit on the critical path, and treat a schedule with no allowance built in for them as optimistic.

What should we agree before the first day?

Working hours, which door the crew uses, which bathroom they use, where materials get stacked, how dust is contained, what happens with pets and children, and where the dumpster goes. Ten minutes on this at the start prevents most of the friction later.

How often should I hear from my contractor?

One point of contact on each side, one scheduled walkthrough a week, and a short written update between them. Written matters: a text thread or an email trail gives both of you a record of what was decided and when.

Something looks wrong. What do I do?

Raise it immediately, in writing, with a photograph. A problem caught at the framing stage is cheap. The same problem found after the tile is set is expensive, and correcting it often means undoing good work to get at bad work.

Raise it with your point of contact rather than with the crew on site. The person setting the tile is rarely the person who decided where it goes.

How do I know the job is actually finished?

Walk it with your contractor and write a punch list of everything unfinished, damaged or wrong, before the final payment rather than after it. Then collect the closeout paperwork.

Take photographs of the open walls before the drywall goes on. Knowing where the pipes and wires run is worth more than you would expect the first time you hang something heavy.

• Final inspection sign-off, kept with your house records.
• Lien releases from the contractor and from subcontractors paid through them.
• Written warranty terms, plus manufacturer warranties and appliance manuals.
• Paint colors and product model numbers, written down in one place.

What do I do if a job goes wrong?

Start by putting it in writing. Photograph the condition, send your contractor a clear written description of what is wrong and what you want done about it, and keep the thread. Most disputes end here, because most are misunderstandings rather than bad faith.

If that does not resolve it, you can file a complaint with MHIC, and if you paid a licensed contractor for work that was unworkmanlike, incomplete or abandoned, you can claim against the Guaranty Fund for actual loss up to $30,000. Claims carry filing deadlines, so do not sit on it. Where the loss is significant, speak to an attorney as well as to MHIC.

The contractor I hired turned out to be unlicensed. What now?

You are outside the Guaranty Fund, which is exactly why the license check matters more than anything else on this page. Stop further payments, get advice before you sign or pay anything more, and report it to MHIC, which does act on unlicensed activity.