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MARYLAND HOME IMPROVEMENT TEST
EXAM | NEWEST ACTUAL EXAM
COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS GRADED A+ | 100%
PASS | 2025/2026 UPDATE!
Who is entitled to a Mechanics lien? - ✔✔✔ Correct Answer > States designate lien rights for contractors, subcontractors or material suppliers who provide labor or furnish material for construction, repairs or improvements of any building machine, wharf or bridge. What is the required notification under Lead PRE - ✔✔✔ Correct Answer > Under Lead PRE, federal law requires that contractors provide lead info to residents before renovating pre- 1978 housing. The EPA publishes a pamphlet titled Protect your family from lea din your home, which must be distributed to the owner and occupants before starting work. Confirmation of receipt of the lead pamphlet or a certificate of mailing must be kept for 3 years To file lien claim, time? - ✔✔✔ Correct Answer > In order to establish a lien under this subtitle, a person entitled to lien shall filed proceedings in the court for the county where the land or any part of the land is located within 18 - days after the work has been finished or the materials furnished.
Sole proprietors and taxes - ✔✔✔ Correct Answer > Your net income from the business is reported as ordinary income. Sole proprietors do not pay corporate income taxes Amount subject to a lien - ✔✔✔ Correct Answer > Lien may be established up to 15% of the building's value regardless of the amount contracted for labor and materials. Additionally, if work is done on an existing building does not increase the value of the property by 15%, then MD will not permit establishment of the mechanics lien. This does not apply to newly constructed building. Whats the deadline to file a lien? - ✔✔✔ Correct Answer > No later than 180 days after last furnishing labor or materials What properties are subject to a lien? - ✔✔✔ Correct Answer > Buildings Water,lines, sewers, drains, and street developments Machines, wharves and bridges Exemptions - the land of which the building is erected may not be subjected to a lien under this subtitles if prior to the establishment of the lien in accordance with this subtitle, legal title has been granted to a bona fide purchaser for value
protective eye wear gloves fall protection hearing protection respirators protective coveralls face shields What is the requirement for EMERGENCY ACTION PLAN - ✔✔✔ Correct Answer > If you have more than 10 employees, your plan must be in writing. if you have fewer than 10 you may communicate the plan orally to employees What does Emergency Action plan include - ✔✔✔ Correct Answer > Reporting fire or other emergency Emergency evacuation Employees who remain for critical operations before evacuations Accounting for all employees after evacuation Employees performing rescue and medical duties ** The plan should also include the name and job title of the plan administrator
OSHA Record keeping requirements - ✔✔✔ Correct Answer > Every employer covered by OSHA who has more than 10 employees, except for employers in certain low hazard industries in the retail, finance, insurance, real estate and service sectors, must maintain 3 types of OSHA records:
- OSHA 300
- OSHA 300A
- OSHA 301 Reporting fatalities and hospitalizations - ✔✔✔ Correct Answer > When a work related fatality or incident that requies hospitalization of 3 or more employees occur:
- Employers must orally report the fatality or incident to the nearest OSHA Area Office within 8 hrs
- If a death occurs within 30 days of the incident, employers must report it within 8 hrs Medical Treatment defined - ✔✔✔ Correct Answer > Medical treatment means the management and care of a patient to combat a disease or disorder. Includes: visits to physician or licensed health care professional solely for observation or counseling; conduct diagnostic procedures such as x-rays or blood tests; first aid First Aid defined - ✔✔✔ Correct Answer > The following are considered first aid:
MSDS provides emergency information in case of contact with the chemical internally or externally. The compliance officer will confirm that all MSDS are at the jobsite Employee rights - Retaliation - ✔✔✔ Correct Answer > Retaliation is prohibited! Private sector employees who exercise their right under OSHA can be protected against employer reprisal. Employees must notify OSHA within 30 days of the time they learn of the alleged discriminatory action. OSHA penalties - ✔✔✔ Correct Answer > See pages 5 - 9 Failur to abate prior violation - Civil penalty of up tp $7000 for each day Programmed and Unprogrammed OSHA Inspections - ✔✔✔ Correct Answer > Programmed inspections - are perfromed on establishments with high injury rates Unprogrammed inspections - are used in response to fatalities, catastrophes and complaints MD Department of the Enviroment responibilities - ✔✔✔ Correct Answer > Enforcement of federal and state environmental laws and regulations and for the issuing of permits, licenses and certifications for activities that may affect the environment.
The MDE published the MDE guide to environmental permits and approvals that provide guidance on permit applications and approval requirements What is the clean water act - ✔✔✔ Correct Answer > establishes the basic structure for regulating discharges of pollutants into the waters of the US What are several Evironmental Laws that may affect your construction activities? - ✔✔✔ Correct Answer > The Clean water act Clean Air Act Endangered species act (ESA) National Environmental Policy Act (NEPA) National Historic Preservation Act (NHPA) What are disadvantages of Sole proprietorship - ✔✔✔ Correct Answer > Unlimited personal liability less available capital Possible difficulty getting long term financing dissolution of business in the even of owners death MHIC does not transfer What are advantages of solo propriertorship - ✔✔✔ Correct Answer
Minimal legal restriction
Use caution with partners - things to discuss: - ✔✔✔ Correct Answer
- Do the partners want to grow and operate a company long term?
- To the partners want to grow a short term company to sell?
- How will the profits be distributed?
- Do the partners agree on the nature of the business, including types of jobs the business will accept? C Corps - ✔✔✔ Correct Answer > Ownership of corp by stockholders and a corporation is considered its own legal entity. The corporation is responsibly for all assets and debts and not the stockholders. Key Characteristics of C Corp - ✔✔✔ Correct Answer > - Existence - A corporation lasts as long as stockholders determine it should
- Financial Management - Separate bank account and separate records
- Liability - The owners of corp are not personally liable for losses of the business. The corporate entity is responsible for business debt
- Taxes - The corp must file income tax returns and pay taxes on the profits What are stockholders? - ✔✔✔ Correct Answer > Owners of the corporation What re other requirements of a corporation - ✔✔✔ Correct Answer
- Board of directors and corporate officers
- Stockholders as owners of the co
- periodic board meetings
- a board empowered to authorize certain actions Advantages of C Corp - ✔✔✔ Correct Answer > - Separate legal entity
- Limited liability for stock holders
- Unlimited life of business
- Availability of capital resources
- Transfer of ownership thru sale of stock Disadvantages of C Corp - ✔✔✔ Correct Answer > - Complex and expensive organization
- Limitation on corp activities and decisions by the corporate charter
- extensive regulation and record keeping requirements
- Double taxation (on corporate profits and on dividends) S Corporation - ✔✔✔ Correct Answer > If your business is an eligible domestic corporation, you can avoid double federal taxation by electing to be treated as an S corp under the rules of sub-chapter s of the Internal Revenue Code. In this way, the S copr passes its income, loss, deduction and credit through to its shareholders to be included on their separate returns
Naming a business importance - ✔✔✔ Correct Answer > Selecting a name is important part of forming your business. The name affects your customers first impressions. The individuality of the name affects future trademarks and service marks. How do you register a trade name - ✔✔✔ Correct Answer > Must be registered with the state department of assessment and taxation, charter division by submitting a trade name application and $25 fee. Expedited service is available List 4 time manamente tips - ✔✔✔ Correct Answer > - Prioritize daily tasks
- delegate effectively as possible
- Use T or F - Top management has the strongest influence on employees' ethical behavior. - ✔✔✔ Correct Answer > True - If top managers demonstrate unethical behavior, employees are likely to do the same T or F - Technology is an essential tool - ✔✔✔ Correct Answer > True Is work done on individual condominium units considered home improvement? - ✔✔✔ Correct Answer > Yes
Is installation in a residence of alarm, awning or fire alarm considered home improvement? - ✔✔✔ Correct Answer > Yes Is now removal or grass cutting home improvement? - ✔✔✔ Correct Answer > No Define contractor - ✔✔✔ Correct Answer > A person who performs or offers or agrees to perform a home improvement for an owner Define Subcontractor - ✔✔✔ Correct Answer > A subcontractor enters into contracts with contractors or other subcontractors to perform home improvement. A subcontractor is not authorized to enter into agreement directly with the owner Define salesperson - ✔✔✔ Correct Answer > A person who sells a home improvement Define Home Improvement contract - ✔✔✔ Correct Answer > An agrement between a homeowner and a contractor to perform a home improvement. The law requires contracts to be in writing and be signed by the parties to the agreement.
When was the commission established? - ✔✔✔ Correct Answer > 1962 How Many commissioners are there? - ✔✔✔ Correct Answer > 9 ( must have experience in the business of home improvement; 4 are members of the general public that represent cosumers; and 1 must have experience in banking and finance) What is the most important role of the Commissioners? - ✔✔✔ Correct Answer > To promulgate regulations for the Commission. These regulations help the public better understand the Home Improvement Law and the Commission's policies How often are the meetings? - ✔✔✔ Correct Answer > bi-monthly. Meetings are open to the public. What is the requirement for Commissioners? - ✔✔✔ Correct Answer
Must be a resident of MD for at least 5 years How long if the Commissioner's term? - ✔✔✔ Correct Answer > 4 years Where is the Commission's office? - ✔✔✔ Correct Answer > Baltimore, MD
Who appoints the Executive Director? - ✔✔✔ Correct Answer > The Secretary of Department of Labor, Licensing and Regulation What is the Executive Director responsible for? - ✔✔✔ Correct Answer > the daily operations of the Commission and signs under the seal letters affirming the licensing status of individuals for court proceedings. The Executive director is also responsible for compiling and maintaining a copy of the Commission's current regulations What do investigators do? - ✔✔✔ Correct Answer > The Commission also employs investigators that review the complaints and Guaranty Fund claims that are received by the Commission. The investigators review complaints against licensed and unlicensed contractors and salespersons. If an investigator determines that a violation may have occurred, what actions can the Commission take? - ✔✔✔ Correct Answer > The Commission may take disciplinary action which may include reprimand, monetary fine or suspension or revocation of the license. True or False: An individual who holds a home improvement license as a contractor is NOT required to obtain a construction license from the Circuit Courts - ✔✔✔ Correct Answer > True How long are exams valid for? - ✔✔✔ Correct Answer > 2 years
not eligible to recover more than the amount paid to the contractor against whom the claim is based. Certain costs like: legal fees, interest, consequential damages are not covered by the Fund. What is the max amount that can be awarded from the Guaranty Fund for the acts or omissions of a contractor? - ✔✔✔ Correct Answer > $100, How is the Fund maintained? - ✔✔✔ Correct Answer > $100 by each contractor at the time of applying for a license. The Commission may also assess each contractor a fee of $50 if the Fund falls below $250, How many days does the contractor have to respond to claims from a homeowner once it has been received by the commission? - ✔✔✔ Correct Answer > Once the Commission receives a claim, it send a copy to the contractor who has 10 days to respond back to the Commission. Who is not eligible to collect from the Fund? - ✔✔✔ Correct Answer
Spouse, relative, or employee of the contractor, or an officer of the corporation. Similarly, an owner may only receive compensation if she/he resides in the house where the work was performed or does not own more than 3 residences.
What happens to the license of the contractor after a claim has been paid? - ✔✔✔ Correct Answer > The licensed is suspended, unless the commission determines that contractor did not know the wrongful conduct or it could had not been avoided What is required in a home Improvement contract? - ✔✔✔ Correct Answer > Date Contractors name, address, and MHIC number Consumer Notice Dates Description of work Deposit and Payment information What is Consumer Notice? - ✔✔✔ Correct Answer > It provides phone of the Commission and states that "each contractor and subcontractor must hold a current MHIC license and anyone can ask MHIC about a contractor" The contract also needs to inform homeowners of the following:
- Formal mediation disputes between homeowners and contractors are available through the Commission
- The Commission administers the Fund which can compensate owners for certain actual losses caused by acts or omissions of licensed contractors
