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Guide to Home Improvements



What is Home Improvement?
Why You Should Only Do Business with a Licensed Contractor
Types of Contractors
Three Basic Steps to Home Improvements
Permits and Inspections
Emergency Repairs
Contractor Checklist

What is Home Improvement?

Generally, home improvement is the repair, maintenance, restoration, or improvement of residential real property. Think of real property as anything in your home or yard which you would normally leave behind if you sold your house. Some of the most common types of home improvements are installing a new roof, repaving a driveway, remodeling a kitchen or bathroom and installing a fence.

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Why You Should Only Do Business with a Licensed Contractor

In Maryland, all home improvement contractors are required to be licensed by the Maryland Home Improvement Commission. To get a license, a contractor must:

  • have two years trade experience;
  • provide proof of financial solvency;
  • make payments to the Home Improvement Guaranty Fund; and
  • pass a test on home improvement law and general business competency.

Contractors are also screened for serious criminal convictions.

Doing business with a licensed contractor provides you with protection from the Maryland Home Improvement Commission's Guaranty Fund for losses of up to $20,000 per claimant that result from poor workmanship and other violations of the Home Improvement Law.  You are NOT protected by the Guaranty Fund if you do business with an unlicensed contractor.  

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Types of Contractors

Contractors large and small differ in their methods of operation, but generally fall into one of four major categories:

  1. Chain Stores  National, regional, and local chain stores which have their own home improvement departments. They usually use subcontractors to do the work but usually remain responsible for the quality of the materials and workmanship. Their prices may be on the higher side of the scale, but they have a permanent address, stand by their warranties, and may be expected to remain in business in the years to come.
  2. Commercial Locations  Firms that specialize in home improvement work and operate out of a fixed business office in a commercial location. These are often family-owned businesses or partnerships. They supply the materials and the work is usually done by their own employees. The majority are reliable, competitive in price, and stand by their warranties.
  3. Home Based Businesses  Contractors who work out of their homes.  Their fees are usually on the low end of the price scale and they may do quality work, but even some of the best can cause problems. Illness, broken-down trucks, or financial difficulties could occur and disrupt the work or prevent its completion. Such businesses often rely on a phone answering service or a family member to take messages, and it can be very difficult to contact the contractor if things go wrong. Nevertheless, a good firm of this type may give you a quality job at a lower price than most of the larger firms. Remember, however, that the value of the firms' warranty depends on the firm still being in business when and if defects occur.
  4. Travelers  Travelers who may travel alone or in a group usually go door-to-door, working out of a truck or camper. NEVER DO BUSINESS WITH A CONTRACTOR THAT COMES TO YOUR DOOR WITHOUT CHECKING THEM OUT VERY CAREFULLY AND VERIFYING THAT THEY HAVE A MARYLAND HOME IMPROVEMENT CONTRACTORS LICENSE. A favorite target for these "hit and runners" are elderly people living alone in older, more established neighborhoods. They "con" the homeowner into letting them "repair" driveways, roofs, or whatever they can find. The work done by these unlicensed itinerants is often poor, and their prices are often unconscionable. In some cases they take down-payments for materials and never return to do the work.

Remember, if you feel intimidated or frightened by the presence of any salesperson or contractor who comes to your home, call the police at 911.

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Three Basic Steps to Home Improvements

Whether you are remodeling, making repairs, or trying to maintain your home in good condition, you will be able to avoid many problems if you take these three basic steps before beginning any home improvement work:

  • Research and plan the project.
  • Carefully choose a contractor.
  • Make sure the contract you sign fulfills your project requirements and protects your rights.


It will be easier for you to compare prices if all contractors from whom you'll get estimates will be basing these estimates on the same criteria. You'll want to develop a plan that describes the work you want done and, if possible, specifies the types of materials you want to be used.

Unless you are already familiar with the methods and materials which could be used for your home improvement project, you'll have to do some research. Get information from unbiased sources who are not trying to sell you anything. For example, if you suspect your house may have a leaky roof that needs replacement, before you call a roofing company you might do some research on replacement roofs at your local library. You could also visit a roofing supply company or write to the association representing manufacturers of roofing products to get information on the best material to replace your roof.

After you have researched your project, you'll be able to both discuss it with your contractor more confidently and describe it accurately in writing.


Unless you already know a contractor who will provide good quality workmanship at a fair price, or have a strong recommendation from someone you trust, you'll need to make a list of several contractors from whom to get estimates.

Because the chances are that you will eventually sign a contract with one of the firms on your list, it's important to be as careful and selective when you choose contractors to give you estimates as when you make the final choice of a firm to do your work. Whether your list of contractors comes from friends, the Yellow Pages, or the clerk at your local hardware store, check them out carefully before you inquire about estimates. Don't be afraid to ask questions.

  • Check Agency Records  
    • Call the Montgomery County Office of Consumer Protection (240.777.3636) to find out if there have been any complaints about the firms you are considering using. 
    • A lso call the  Maryland Home Improvement Commission  ( MHIC) in Baltimore (410.230.6309) to verify that a firm is licensed and find out how long it has been licensed.  Ask them about any complaints they may have on file.
    • Washington's  Consumers' Checkbook Magazine has evaluated and rated some Washington area home improvement firms. Checkbook is available at libraries, newsstands or by subscription (800.213.7283).
    • Check the Maryland Judiciary Case Search  to check if an individial is involved in any legal actions.
  • Ask Questions   When you discuss your home improvement project with a firm, describe the work to be done and ask the following questions, plus any others that seem appropriate:
    • Do you do this type of work?
    • Do you charge for an estimate?
    • How long have you been in business?
    • Do you have a Maryland Home Improvement License?  Ask to see the license.
    • Can you supply references from previous customers?
  • Get Estimates   When you have checked out several firms and selected three or more to give you estimates, call and invite them to your home to give you their estimates in the form of written proposals. Remember that it will be meaningless to compare price estimates unless you give each contractor the same description of the job you want done and each of them proposes to do the job in the same way. For example, if you ask for estimates on a new air conditioning unit, you cannot easily compare three price estimates if two of the firms plan to install a standard unit and the third will install one which is top-of-the-line.

You may receive a wide range of estimates from contractors bidding on the identical home improvement. Never rely on price alone in making your final choice. Remember that contractors also vary in the quality of the work they do and their ability to complete a job on time - or sometimes to complete a job at all. When making your decision, compare all factors, including price, type of firm, experience, reputation, and length of time in business.


Maryland's Home Improvement Law requires that all contracts for home improvement work be in writing and signed by both the consumer and the business before work begins or any money is paid.   Avoid any contractor whose contract does not have their name, address, and MHIC license number preprinted on the contract.

A contractor cannot accept more than 1/3 of the contract price (price for the work to be done).  Remember, you can negotiate a lower down payment.  You can also work out a plan to make additional payments at intervals as the work moves ahead, with the amount of each payment to be based on how much progress has been made on your job. You shouldn't make the final payment until the work is completed and you've checked it carefully to be sure you're satisfied.

Maryland law requires that the contract include the following:  (adapted from the Maryland Home Improvement Contracts webpage)

  • Notice for Homeowners   Each home improvement contract must contain a notice that states, "Every home improvement contract must contain a notice that gives the telephone number of MHIC and states that" each contractor and subcontractor must hold a current MHIC license and anyone can ask MHIC about a contractor or subcontractor." The correct address for MHIC is 500 North Calvert Street, Baltimore, Maryland 21202. The telephone numbers are 410-230-6309 and 1-888-218-5925.

MHIC also requires the following notices in every contract:

  • Formal mediation of disputes between homeowners and contractors is available through the Maryland Home Improvement Commission;
  • The Maryland Home Improvement Commission administers the Guaranty Fund, which may compensate homeowners for certain actual losses caused by acts or omissions of licensed contractors; and
  • A homeowner may request that a contractor purchase a performance bond for additional protection against losses not covered by the Guaranty Fund.
  • Description  A home improvement contract must contain a description of the work to be performed and the materials to be used.  Be as specific as possible to avoid any confusion later.  If you prefer a specific brand, color, size and/or style, include that information in the contract.  
  • Dates   A home improvement contract must contain the approximate dates when the performance of the home improvement will begin and when it will be substantially completed.
  • Deposit and Payments   A contractor cannot accept more than 1/3 of the contract price as a deposit and may not accept any payment until the contract is signed. The agreed upon price of the home improvement contract should be clearly stated. Beyond the initial deposit, the Home Improvement Law does not control the payment schedule; instead payment terms, including a deposit of less than 1/3 of the contract, can be negotiated between the homeowner and contractor.
  • Mortgage or Liens   If you are borrowing money to finance the home improvement project, this information is very important. Whenever payment for work performed under a home improvement contract will be secured by an interest in residential real estate, the contract is required to contain additional information. On the first page of the contract, there must be a written notice that states: 

"This contract creates a mortgage or lien against your property to secure payment and may cause a loss of your property if you fail to pay the amount agreed upon. You have the right to consult an attorney. You have the right to rescind this contract within 3 business days after the date you sign it by notifying the contractor in writing that you are rescinding the contract."

  • Arbitration Clause   Does the contract contain an arbitration clause? Before you sign a contract, it is important to know what arbitration is and whether the contract has an arbitration clause. A mandatory arbitration clause in a home improvement contract is required to include the name of the person or organization that will conduct the arbitration; whether any mandatory fees will be charged to the parties for the arbitration and list the fee schedule; whether the arbitrator's findings are binding; and a disclosure that a claim against the Guaranty Fund will be stayed until completion of the mandatory arbitration proceeding. Also, the parties must initial and date the contract next to the arbitration clause.
  • Cancellation Rights   The contract may also be covered by the Maryland Door-to-Door Sales Act . If the contract is covered by the Door-to-Door Sales Act, the contractor must include additional information in the contract, including a notice of your cancellation rights. A separate " Notice of Cancellation" form must be attached to the contract and filled in with the information about how to cancel the contract and the deadline to cancel the contract. The Door-to-Door Sales Act requires that the contract be written in the same language as that principally used in the oral sales presentation.

When you sign a home improvement contract in your home and in the presence of the seller, you usually have five (5) working days [or seven (7) if you are at least 65 years old] in which to change your mind and cancel the contract. The seller must tell you about your cancellation rights orally and in writing and provide the forms to use in cancelling. However, sometimes you do not have this right to cancel. To protect yourself, check with a competent source about your rights under this law. Call your local Office of Consumer Protection (240.777.3636 in Montgomery County), the Office of the Attorney General (410.528.8662), or a private attorney.  The Office of Consumer Protection advises consumers to  not sign a contract unless you are ready to make a commitment.  Relying on a right of cancellation when you are unsure is not a wise move.

  • Warranties  T he contract should also contain the terms and conditions of any warranties for materials and workmanship. It may also contain details of any other matters upon which the parties may lawfully agree. For your protection, get all promises in writing.

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Permits and Inspections

A permit is a document issued by a government agency which allows you to make certain changes to your home. Home improvement permits are generally required for changes that could affect the soundness of the structure of a home or the health and safety of its occupants. They are also required for certain projects - fences, for example - which might go onto a neighbor's property or violate a "setback" restriction. (A setback restriction requires a structure to be a certain distance within the property line.)

When a government agency issues a permit for home improvement work, it will inspect the work when it has reached a certain stage and/or when it is completed to make sure it complies with various codes and regulations.

The Maryland Home Improvement Commission Law says your contractor must either get the permit himself or see to it that someone else gets it. The law also says that a local jurisdiction may not issue a permit to an unlicensed contractor. Be wary if the contractor asks you to get the permit. It could very well mean that he is not licensed. It could also have other legal implications.

Most home improvement permits are issued for building, electrical, and plumbing work. Unless you live in Rockville or Gaithersburg, you will in most cases get your building and electrical permits from the Montgomery County Department of Permitting Services and plumbing permits from the Washington Suburban Sanitary Commission (WSSC).

Rockville residents obtain electrical, building and most plumbing permits from their city government. Gaithersburg residents obtain building and electrical permits from their city government and plumbing permits from WSSC.

If you are in doubt about whether a permit is required, or have any other question about permits or inspections, call the appropriate agency for your jurisdiction:

Montgomery County Government,
Department of Permitting Services

Gaithersburg City Government

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Emergency Repairs

Sometimes you need to have repairs made as soon as possible. You may not have time to do research about the problem or get a lot of information about different repair firms. When you have any type of problem that needs immediate attention, follow these guidelines:

  • If time allows, before you call any contractors check on their complaint records with the Office of Consumer Protection and the Better Business

  • When you call the firm, describe the problem as completely and accurately as you can. This will help them diagnose the problem. Then let them decide what's wrong and how to fix it.

  • Ask what service charges, minimum charges, or other types of charges the firm makes, and what these charges cover. There is usually a minimum time just to come to your house, and this charge will cover a specific period of time. If the repairman stays beyond that minimum charge you must pay more. For example, the charge might be $60 just to come to your house, with this amount to cover the first half-hour of labor. After that you might be charges $15 for each additional quarter-hour of labor. Find out whether the labor charge includes travel time.

  • Before any repairs are begun, get a written estimate of how much they will cost. Afterwards get a detailed invoice that lists all charges for parts and service. Tell the firm you wish to approve any charges that will raise the estimated bill. Under Montgomery County law, the final bill can't exceed the written estimate by more than 25% unless you approved the increase.

  • Pay by credit card. Under federal and state law, in most cases you have the right to assert any claims or defenses you have against the seller of the goods or services against the credit card company. This generally means that if the goods or services are defective, you can refuse to pay the credit card company until the problem is corrected.

  • Get back any parts that are replaced. If you later think that the repairs were unnecessary or not done properly, the parts can be helpful in proving your case.

  • Please note that all emergencies are not "true emergencies." For example, if the plumbing line fails, stopping the leak itself may be an emergency but other work such as dry-walling or caulking may not be an emergency and can wait until you choose a contractor.

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In conclusion, some words of caution are necessary. This booklet refers to certain laws and regulations which apply to home improvements. Bear in mind that what is the law today may change by tomorrow. The same can be said about building technology. New products and techniques are constantly entering the marketplace. What may be the best method of doing something as this booklet is being written may be obsolete in the not too distant future.

Government offices mentioned in this booklet are good sources for information about any laws or regulations. Also remember that you may have legal rights and remedies beyond those referred to in this booklet. When dealing with contracts involving substantial sums of money, or when legal problems arise, an attorney is the best source of advice on those rights and remedies.

Finally, this is not an exhaustive study of home improvements but an attempt to give you a summary of the kind of information homeowners most often request. Other sources of information include your local library, manufacturing firms, and trade associations. If you need further references or information, call the Montgomery County Office of Consumer Protection, 240-777-3636.You can also check out the FTC brochure Home Sweet Home ... Improvement.

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Contractor Checklist

When selecting a contractor, get at least three estimates and find out which category the contractor is in. Then use this checklist to compare them.


  • Complaints on file at the Montgomery County Office of Consumer Protection? Call 240-777-3636 or go online to their  website.
  • Complaints on record with the Better Business Bureau? Call 202-393-8000, or go online to their  website.
  • A current Home Improvement License? Call 410-230-6309, 1-888-218-5925 toll free or go online to their  website.

Remember, don't be fooled by a merchant who only has a "business license."


  • Do this type of work?
  • Give a free estimate?
  • Supply references?


  • Whether permits are required (building, plumbing, electrical, etc.)
  • Acceptable starting and completion dates
  • Price
  • Terms of the warranty - both workmanship and material

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