2.1 Contractor and Salesperson Licenses

The Two License Categories

The Maryland Home Improvement Commission (MHIC) licenses individuals and businesses under the Maryland Home Improvement Law, found in Title 8 of the Business Regulation Article of the Annotated Code of Maryland. Over the years the General Assembly has simplified the licensing structure, and today only two license categories remain: contractor and salesperson.

Understanding exactly what each category authorizes — and which categories no longer exist — is one of the most frequently tested topics on the MHIC contractor exam. The exam loves to ask about categories that were eliminated, because outdated books and courses still describe them.

Contractor License

A contractor license is the primary license. Under Bus. Reg. §8-101, a contractor is anyone who performs, or agrees to perform, a home improvement for a homeowner. Note the two-pronged definition: you need a contractor license not only when you physically do the work, but the moment you agree to do it — that is, when you enter into a contract with the homeowner. This is why soliciting or signing a home improvement contract without a license is itself a violation, even if no work ever begins.

A contractor license may be issued to an individual, a corporation, a partnership, or an LLC. The licensed contractor is the party that:

• Contracts directly with the homeowner
• Signs the home improvement contract
• Controls payments into and out of the job
• Bears responsibility to the MHIC Guaranty Fund for the work

Salesperson License

A salesperson license authorizes an individual to sell home improvements on behalf of a licensed contractor. The critical statutory limit: a licensed salesperson may represent no more than two (2) licensed contractors at one time. Selling for a third contractor without updating the license is a violation.

A salesperson does not contract in his or her own name. The contract is always between the homeowner and the licensed contractor; the salesperson merely negotiates and sells on the contractor's behalf. If a salesperson leaves a contractor's employ, the contractor is expected to notify the Commission, and the salesperson must be properly associated with a new contractor before selling again.

The Eliminated Subcontractor License

Until 2016, Maryland had a third license category: the subcontractor license. Senate Bill 285, effective July 1, 2016, eliminated it. The practical effect:

• A subcontractor who performs home improvement work for an MHIC-licensed contractor no longer needs any MHIC license.
• Only a licensed contractor may contract directly with a homeowner. A person who contracts with the homeowner and then subs out the work is acting as a contractor and must hold a contractor license.

Exam trap: A question describing a plumber or electrician who works only as a sub for licensed general contractors and asking which MHIC license the sub needs. The current answer is none — the subcontractor category no longer exists. (Trade-specific licenses, such as the state master electrician or HVACR licenses, are separate requirements administered by other boards and are unaffected by SB 285.)

Temporary Licenses — Gone Since 1999

Older materials sometimes mention a temporary license that let an applicant work while the application was processed. Temporary licenses were removed from the law in 1999 and are no longer issued. Today, there is no lawful way to perform or contract for home improvement work while an application is pending — you must wait until the license is actually issued.

Quick Reference Table

What Counts as Home Improvement?

The license categories only matter for work that meets the statutory definition of home improvement: broadly, an addition to or alteration, conversion, improvement, modernization, remodeling, repair, or replacement of a building — or part of a building — used or designed to be used as a residence, together with work on the adjacent land and structures such as driveways, fences, decks, garages, and swimming pools. Brand-new construction of a home from the ground up is treated differently from improving an existing residence, a distinction the exam uses when asking whether an MHIC license is needed at all.

Worked Scenario

Darnell negotiates a basement-finishing job with a homeowner, signs the contract in his own name, and plans to hire trade subcontractors for the electrical and plumbing. What MHIC license does Darnell need?

A contractor license. Signing the contract with the homeowner makes him a contractor under the "agrees to perform" prong — it does not matter that he will delegate every task. His subcontractors may lawfully perform the trade work without an MHIC license because they work for him (their own trade licenses, such as master electrician, are a separate matter), but Darnell cannot contract with the homeowner until he is licensed.

Remember: the exam's brand name may say "General Contractor," but Maryland has no statewide general contractor license or exam — the MHIC contractor license is the de facto state contractor credential, and its categories are the ones above.