Home improvement contractors must be licensed with the Maryland Home Improvement Commission (MHIC). However, it is common for people to take shortcuts or completely avoid this law. The penalties for doing so can be severe, especially if you want to stay in the contracting business in Maryland.
Why does this happen?
Most license violations are due to people not being familiar with Maryland’s broad definition of home improvement work, which includes building, repairing, altering, or replacing elements or components of a home. For example, if your friend gives you $50 to install their dishwasher or fix their fence, you have just broken the law.
Sometimes people do unlicensed work as a mere oversight. Someone may get excited about a job falling into their lap and dive right in without realizing they have missed an important step in launching their contracting business.
Word-of-mouth about a casual job for a friend that went well might mushroom into two or three more jobs and suddenly, that person is in the contracting business without even realizing it.
Someone with a criminal history, who may be banned from getting a license, might try to soft launch an unlicensed business and hope no one notices. Most people hiring contractors don’t know they should ask to see the contractor’s MHIC license and general liability insurance certificate before hiring them.
Possible penalties
No matter how intentionally or innocently someone does unlicensed contract work, the penalties can hurt or even end their contracting business before it gets going.
A first offense in Maryland can mean a fine of up to $1,000 and even up to six months in prison. In most cases, prison time is handed down to people running a scam or caught stealing.
A second offense can result in a fine of up to $5,000 and up to two years in prison.
In addition to these penalties, the guilty party may be barred from applying for a contractor’s license for up to one year. They may also have to pay back part or all the payment they collected from their client, even if they completed the job without incident.
License violations can end a business before it gets started. If you’ve been accused of illegal contracting work, speak to an attorney who may be able to keep the damage to a minimum.