MHIC NASCLA Contractors Exam Review 2025: Maryland Home Improvement Laws and Regulations, Exams of Nursing

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REVIEW 2025

Does home improvement include work done on an individual condominium unit?

• correct answer ✅Yes Does home improvement include work done on a swimming pool? - correct answer ✅Yes Does a home improvement contract HAVE to be in writing in order to preserve your lien rights? - correct answer ✅Yes Contractors who can only contract with a contractor or a subcontractor are: - correct answer ✅Subcontractors A county or municipality in Maryland _____________ require a contractor to get authorization from an official in that city to be able to contract in that municipality. - correct answer ✅Cannot A county or municipality in Maryland _______________ regulate the character, performance and quality of home improvement. - correct answer ✅Can How many members are there in the Maryland Home Improvement Commission?
• correct answer ✅ 7 Of the 7 members on the Commission, how many are experienced in home improvement? - correct answer ✅ 3 What is the term of a member on the Commission?

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Associated Answers - correct answer ✅4 Years How long must a person be a citizen and member of Maryland before they can be appointed to the Commission? - correct answer ✅5 years It is illegal for a member of the Commission to receive any compensation from a person regulated by the Commission. - correct answer ✅True How often does the Commission hold meetings at a minimum? - correct answer ✅12 times a year The _______________ is a full time employee of the State. - correct answer ✅Executive Director People hired to investigate complaints about home improvement projects work under: - correct answer ✅the Director of the Commission If the Commission decides to sue a contractor because they believe that the contractor has or will cause harm to another person, they can sue for: - correct answer ✅1. injunctive relief against the conduct

2. an order for satisfactory completion
3. restitution Can the Commission request financial records at any time? - correct answer ✅yes

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What is the cost of the initial application fee for a home improvement contractors' license? - correct answer ✅$ The Commission can ask an applicant for information about the applicant's... 1 character 2 experience 3 financial stability 4 all of the above - correct answer ✅All of the above The financial information provided by an applicant is public information. - correct answer ✅No If an application for a license is denied, the applicant can request a hearing within ______________ after the notice of denial is mailed. - correct answer ✅10 days A salesperson will not be issued a license until the salesperson becomes employed or contractually involved with a licensed contractor. - correct answer ✅True What is the fee to place a license on inactive status? - correct answer ✅no more than $ A person whose license is put on inactive status... 1 must return their license to the State. 2 doesn't have to maintain the required liability insurance coverage.

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3 must not do any contracting. 4 all of the above. - correct answer ✅All of the above Must a contractor, sub-contractor, or salesperson who places their license on inactive status pay a fee to renew an inactive license? - correct answer ✅Yes How many days does a licensee have to notify the Commission of change in control in ownership, management, address or trade name? - correct answer ✅ 10 days How many contractors may a salesperson represent? - correct answer ✅ 2 Jim Smith is a Sales Representative for ABC Construction. Can he accept a position as a Sales Representative for Top Notch Construction without first informing ABC Construction of his intentions and also informing Top Notch Construction of his existing situation with ABC Construction? - correct answer ✅No When a sales person is no longer associated with a company they represented, the contractor must: - correct answer ✅give the commission written notice The Commission may suspend or revoke a license if the licensee: 1 lies on their application 2 practices fraud while being licensed 3 is convicted of a felony

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How long does a claimant have to bring a claim against the Guaranty Fund? - correct answer ✅3 years from discovery of the loss or damage How many days does a contractor have to respond in writing to the copy of a claim that was sent by the Commission? - correct answer ✅10 days Can a disciplinary hearing and a hearing concerning a claim against the Guaranty Fund be held at the same time if the facts in this situation are the same? - correct answer ✅Yes If within ____________ after the Commission gives notice, a contractor on whose account a claim was paid does not reimburse the fund in full, the Commission may sue the contractor for reimbursement. - correct answer ✅30 days In addition to full reimbursement of the fund, a contractor is responsible to pay at least ___________ interest on the amount to reimburse. - correct answer ✅ 10 percent The state can record a lien against any real property owned by the contractor for a debt owed to the fund. - correct answer ✅True If the Commission pays a claim from the Fund based on the actions or omissions of a contractor, the Commission may suspend the contractor's license until full reimbursement of the Fund plus at least 10% interest. - correct answer ✅True

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A home improvement contract in compliance with the home improvement laws would include all of the following except: - correct answer ✅Names and license numbers of subcontractors A salesperson may not represent 2 contractors at the same time for the same project. - correct answer ✅True Can a salesperson legally accept money for themselves from the customer? - correct answer ✅No It is against the law for building and permits departments to issue a permit to a contractor without the contractor's license number. - correct answer ✅True If a contractor fails to correct a violation of the building code within a reasonable time period, the county or municipality inspecting the project shall notify the Commission. - correct answer ✅True What is the maximum fine for contracting without a license - first offense? - correct answer ✅$1,000 and/or 6 months in jail or both What is the maximum fine for contracting without a license - second offense? - correct answer ✅$5,000 and/or 2 years in jail or both Contractor, Jack Smith, is not getting along with Hector Jones, his customer. If he decides not to complete the contract, has Jack broken any law? - correct answer ✅Yes

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If a contractor's salesperson stops selling or working with the contractor for any reason, the contractor has a responsibility to the State to inform the Commission.

• correct answer ✅True All advertising has to provide the identifier "Maryland Home Improvement Commission License No ______________" or "MHIC#__________". - correct answer ✅True What is the maximum penalty the Commission may impose upon a contractor, licensed or unlicensed, per violation of these laws: - correct answer ✅$5, Advertising must be done in a way as to avoid misrepresenting the product, service or terms of sale so as not to deceive the customer. - correct answer ✅True An applicant must provide to the Commission, a credit report with their application. - correct answer ✅True How many days does a contractor have to respond to a receipt of a claim from the commission? - correct answer ✅10 days A Home Improvement Contractor is a person who offers to... - correct answer ✅perform repairs for a homeowner. What is the MAXIMUM deposit permitted for a project with a total contract price of $1,500? - correct answer ✅$

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What is the MAXIMUM amount that a home improvement contactor may pay to a homeowner for referring a client to the contractor? - correct answer ✅The contractor is NOT permitted to compensate the homeowner for referrals. An applicant was denied a license after a hearing. When may the applicant reapply? - correct answer ✅6 months. What license is required for a telephone salesperson that works as an independent contractor for a home improvement contractor? - correct answer ✅No license is required. The Home Improvement Commission holds a hearing to determine the status of an individual's application for licensure. The Commission MUST notify the applicant of its decision with (how many days after the hearing)? - correct answer ✅60 days. A homeowner cancels a $1,000 door-to-door contract 2 days after signing the contract. The MAXIMUM service fee that me be collected by the contractor is - correct answer ✅nothing. No service fee may be collected. A renewal notice MUST be mailed by the Commission within how many months of the license expiration date? - correct answer ✅1 month A license that is NOT renewed will... - correct answer ✅expire. A local county or municipality may ________ the _______ of home improvements. - correct answer ✅regulate, quality

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A contract is signed at noon on Thursday, September 20. The buyer can cancel this contract anytime up until... - correct answer ✅noon on Thursday, September 27. Estimate Planning - correct answer ✅In order for a contractor to present a proposal to a customer, they first have to create a cost estimate of the entire project. Review the project documents (drawings, specifications, contracts and bonds). Attend all pre-bid meetings. Determine costs of labor, materials, equipment and subcontractors. Consider the degree of difficulty the job poses, the overhead involved, and the profit expected. Conduct a site visit! The Quantity Take-off Method involves - correct answer ✅counting the number of items associated with a particular construction project, determining the associated materials and labor costs, and formulating a bid (or estimate) as part of the bidding process. Quantity take-off is also applied to the pricing process. First determine labor costs (by considering historical information) and burden (employment taxes and insurance). Figure out materials, allowances and contingencies, and how they will impact the outcome of the project. Include the direct costs of rented or leased equipment. Also consider:

• Subcontractors if needed
• Project overhead
• Company overhead
• Add markup for profit being careful to keep your bid competitive

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Labor Costs - correct answer ✅The cost of labor will vary from job to job. Historical information will help you arrive at an accurate estimate. Labor Burden. - correct answer ✅Labor burden refers to the "indirect" administrative costs of employing laborers. The cost of employment taxes and insurance (Medicare, Social Security, unemployment insurance, workers' compensation, liability insurance etc.) must be considered. Indirect labor costs can range from 25 to 70 percent of the base wage rate, and once that percentage is determined, it should be added to the direct labor costs to come up with a single hourly or "shop" rate. Materials - correct answer ✅The costs of materials can fluctuate, and it is important to be current in your estimate of material costs. Be sure to get several bids from each supplier. Add contingency costs for waste. Equipment Cost. - correct answer ✅Large equipment required to complete a project, for example a loader needed for moving stockpiled dirt for removal, is considered a direct cost. These costs will differ depending on whether or not you own or rent the equipment. If you own, calculate the unit cost of the equipment by determining the actual value (depreciation from original price), operation and maintenance costs, taxes and fees, labor and insurance. If the equipment is rented, factor in the rental rate, delivery fees, labor, fuel etc. Finally, the option of subcontracting the work is available, and this cost would appear under subcontractor fees. Contingencies - correct answer ✅Contingencies are added to allow for unanticipated problems. Adding contingency costs to the estimate from the start allows more flexibility to absorb these additional expenses without going over budget.

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Do employers have to pay overtime pay to employee who works on a holiday? - correct answer ✅No The Wage Garnishment Law prohibits an employer from firing an employee whose pay is garnished for payment of a single debt. - correct answer ✅True What is the purpose of New Hire Reporting? 1 to collect taxes 2 to detect benefits fraud 3 to enforce child support orders 4 both b and c - correct answer ✅to detect benefits fraud and to enforce child support orders both b and c Employers in Maryland are required to report their payroll and pay unemployment insurance taxes on their Quarterly Contribution Report - correct answer ✅True How many employees must an employer have before they are required to purchase Workers Compensation Insurance? - correct answer ✅ 1 What benefit is provided to an injured employee if needed? 1 Wage replacement and payment for loss or permanent damage to body parts 2 Rehabilitation costs

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3 Current and future medical costs 4 All of the above - correct answer ✅all of the above are benefits provided to an injured employee if needed If, due to an injury that occurred at work, an employee is unable to return to work after three work days, how long does the employer have to report this accident to the Workers Compensation Commission? - correct answer ✅10 days What is the penalty for not providing Workers Compensation Insurance to your employee(s)? - correct answer ✅Up to $5000 fine, imprisoned for one year, or both What governmental department in Maryland administers the Laws for Unemployment? - correct answer ✅Department of Labor, Licensing and Regulation After how many days of conducting business with an employee is an employer in violation of the law if they have not yet registered for Unemployment Insurance? - correct answer ✅20 days Which of the following rates is for unemployment insurance that is the average rate paid by all employers over the last five years? - correct answer ✅New Account Rate Employers are required to pay a percentage of the first $8,500 of wages for each employee to cover the cost of unemployment insurance. This is 100% an employer expense. - correct answer ✅True

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Workweek Defined under FLSA - correct answer ✅A workweek is considered 168 hours during seven 24 hour periods. It may begin on any day of the week and at any hour of the day Required Recordkeeping. The following records must be kept and preserved for at least three years. - correct answer ✅1. Employee's full name and social security number.

2. Address, including zip code.
3. Birth date, if younger than 19.
4. Sex and occupation.
5. Time and day of week when employee's workweek begins.
6. Hours worked each day.
7. Total hours worked each workweek.
8. Basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a week", "piecework")
9. Regular hourly pay rate.
10. Total daily or weekly straight-time earnings.
11. Total overtime earnings for the workweek.
12. All additions to or deductions from the employee's wages.
13. Total wages paid each pay period.
14. Date of payment and the pay period covered by the payment

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Willful violations of the FLSA can result in significant fines. - correct answer ✅A violator may be fined up to $10,000, and if found guilty a second time may be imprisoned. Age Discrimination in Employment Act of 1967 - correct answer ✅applies to employers of more than 20 employees, and prohibits discrimination against applicants over the age of 40. Interestingly, the act does not protect younger workers from "reverse age discrimination". Family and Medical Leave Act - correct answer ✅The Family and Medical Leave Act permits a "spouse, son, daughter, parent, or next of kin" to take up to 26 work weeks of leave to care for a "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." Wage Garnishment Law. - correct answer ✅This law limits the amount of income that may be legally withheld from an employees income There are 4 components to Workers' Compensation: - correct answer ✅1.Medical Expenses

2. Disability Pay
3. Vocational Rehabilitation
4. Benefits to dependents Employers should submit a Combined Registration Form - correct answer ✅no later than 20 days after the first day of business.