Maryland caps the deposit at one third of the contract price, bans taking any money before the contract is signed, licenses all home improvement work with no dollar threshold, and stands behind licensed contractors with a Guaranty Fund of up to $30,000 per claim.
Rules verified against the statute and Maryland Home Improvement Commission (MHIC) on 2026-07-17.
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A home improvement contractor may not collect more than one third of the contract price as a deposit, and may not collect anything at all before the contract is signed.
Maryland Business Regulation section 8-617 (opens in new tab) · MHIC: home improvement contracts (opens in new tab)
An MHIC license is required for home improvement work on an existing residence at any value: Maryland sets no dollar threshold.
Maryland Business Regulation, Title 8 (home improvement licensing) (opens in new tab) · Maryland Home Improvement Commission (opens in new tab)
Home improvement contracts must contain the statutory terms, and cancellation rights run 5 business days, 7 if you are 65 or older, with a further 3-day rescission notice where the contract puts a lien on the home.
Maryland Business Regulation section 8-501; Commercial Law section 14-302.1 (opens in new tab) · MHIC: contract requirements (opens in new tab)
The MHIC Guaranty Fund can pay a homeowner up to $30,000 per claim for actual losses from unworkmanlike or incomplete work, but only when the contractor was MHIC-licensed. Unlicensed work is outside the fund, which is one more reason the license check comes first.
MHIC Guaranty Fund (opens in new tab) · MHIC: Guaranty Fund questions and answers (opens in new tab)
Check a Maryland home improvement license (MHIC) (opens in new tab) is the official, free search run by Maryland Home Improvement Commission (MHIC). Then see the public evidence we hold: check the business by name, or browse contractors with public evidence.
A home improvement contractor may not collect more than one third of the contract price as a deposit, and may not collect anything at all before the contract is signed. The cap binds on the final signed contract price.
An MHIC license is required for home improvement work on an existing residence at any value: Maryland sets no dollar threshold.
The MHIC Guaranty Fund can pay a homeowner up to $30,000 per claim for actual losses from unworkmanlike or incomplete work, but only when the contractor was MHIC-licensed. Unlicensed work is outside the fund, which is one more reason the license check comes first.
Use the free official search: Check a Maryland home improvement license (MHIC). It is run by Maryland Home Improvement Commission (MHIC) and takes minutes. Checking before you sign costs nothing.
This is guidance from the public rules, not legal advice. The thresholds bind on your final signed contract price, not an estimate, and state law changes. Check the board's current page before you sign or pay anything.
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