Before hiring a contractor, please check the listings online or contact the Maryland Department of Labor, Licensing, and Regulations to verify whether the contractor has a Maryland Home Improvement Commission license and has the required general liability insurance coverage, surety bond, and workman’s compensation coverage, first.
Each year, unlicensed home improvement contractors defraud Maryland homeowners of millions of dollars. They often present themselves as a licensed contractors and do not have all the required licenses and insurances, and worse, can damage a customer’s home, instead of repairing it, leaving the homeowner vulnerable to extra expenses that were not budgeted or might not be available to pay for such repairs. These repairs are often more expensive than the original work would have been, not to mention the stress that homeowners have to deal with as a result. Often times with a licensed contractors it is easy to recover necessary funds, especially if the licensed contractor leaves the job after a large sum of money has been paid as a deposit. It is also very common for unlicensed contractors to prey upon vulnerable customers after a natural disaster, such as a hurricane, tornado, flood, or earthquake, and offer to repair their damaged homes in a fast manner, not giving the customer a chance to even look up the legitimacy of the company. Then, the worst case scenario happens, and the contractor takes a 50% deposit, instead a third, and leaves the state, leaving the customer with a damaged home, no funds, and no way to get justice because the company was illegal. On the other hand, if it is licensed contractors & insured, and they take a third deposit, and never return to the job to finish the work, then the customer can go to the MHIC guaranty fund and get reimbursed for the funds given to the company, and MHIC will go after the licensed contractors companies legally, allowing the customer to hire a new licensed contractors to get the job done right.
Sometimes, customers unsuspectingly, may in fact, actually hire unlicensed contractors because they want a cheaper price, or they know the person by reputation, or by referral. There are many unlicensed contractors out there who provide high quality work and high caliber service. So, many contractors will say that they are “licensed” when in fact, they only hold a business license and NOT a MHIC license, which is additionally required. They may even have insurance and other licenses, too. But, contractors who renovate or rebuild homes or apartments of 3 units or less are required to hold a MHIC license, in addition to the other licensing and insurances. The only exception is carpet installation, water mitigation, demolition, new home construction, apartments with more than 3 units, and commercial buildings. Since the Maryland Home Improvement Commission licenses and regulates Maryland home improvement contractors, subcontractors and salespersons, it may seem like a great deal at first, but it may cost much more money in the end to repair shoddy work or to pay another contractor to complete the work.