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Maryland Home Improvement Contractor Bond

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How much does a $20,000 surety bond cost for a home improvement contractor in Maryland

A $20,000 surety bond for home improvement contractors in Maryland costs as little as $200 per year, meaning a 2-year bond would cost as little as $400 for highly qualified applicants. A $100,000 bond, which has a different bond limit in lieu of providing financials to the state, is also available. The exact cost that a Maryland home improvement contractor will pay for his or her bond is dependent upon a review of the contractor's credit by an underwriting professional.

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Bond Type
$20,000Home Improvement Contractor Bond
$100,000Home Improvement Contractor BondThis bond limit is in lieu of providing a financial statement to the state.

Why do I need a home improvement bond in Maryland?

The Maryland Home Improvement Commission requires home improvement contractors to get a $20,000 surety bond prior to being licensed. The surety bond is intended to guarantee the contractor complies with the Annotated Code of Maryland, Business Regulation Article, Title 8, regarding home improvement regulations. Home improvement contractors must demonstrate financial solvency as part of their application process because the Guaranty Fund will compensate a homeowner up to $20,000 (or the total amount of payments made on the contract) in the event the contractor performs an unworkmanlike, inadequate, or incomplete home improvement.

Any applicant who does not meet the financial solvency guidelines may purchase a surety bond as a way of fulfilling the financial solvency requirement.

Each home improvement contract must be in writing and must be legible. Contractors can’t accept a deposit or payment from a homeowner until the contract is signed by each party involved in the contract. The agreed-upon price of the home improvement contract should be clearly stated. The contract must also describe each document that incorporates, such as an architect’s drawings or a building permit, and the homeowner must receive a signed copy of the contract prior to the commencement of work.

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Need a surety bond for a construction project?

Payment bonds and performance bonds are often required for specific construction projects. No matter the state, SuretyBonds.com can get you the bond you need for your next job.

Terms of a home improvement contractor bond

The Maryland Home Improvement Commission requires contractor bonds to be issued continuously for 2-year terms, and if the surety wishes to cancel the bond, the state requires the surety to provide notification in writing at least 30 days prior to the proposed cancellation date.

How to become a home improvement contractor in Maryland

To become a home improvement contractor, all applicants must pass an exam proctored by PSI Exams Online prior to licensing. Once passed, the applicant can begin the licensing application. The following will be required on the application:

  • Trade name; prior to registering the trade name/partnership/corporation:
    Call the Commission at 410-230-6309 to check for name availability. Register the business name with the Maryland Department of Assessment and Taxation and submit proof of acceptance with the license application.
  • Proof of at least two years of experience in home improvement work, construction and/or related education
  • Current, original credit report within the last 90 days
  • Copies of any conviction records for misdemeanors or felonies related to a home improvement transaction
    If applicable, provide a letter of explanation for each conviction and a letter of completion of parole/probation from the designated parole/probation officer
  • Proof of financial solvency based on the scope and size of the business in relation to total assets, liabilities, credit rating, and net worth (Assets - Liabilities = Net Worth)
    A surety bond can be obtained if the applicant does not meet financial solvency requirements
  • Proof of $50,000 or more general liability insurance
    Include the name of the individual applicant as well as the company name. Designate the Maryland Home Improvement Commission as the certificate holder.
  • Real estate and bank statements
    A copy of current real property assessment notice(s) if real estate is listed on financial statement; this may also include a written appraisal to prove property value from a licensed appraiser within the last 2 years. For out-of-state properties, include a copy of the deed.
    Notarized signature of co-owner(s) of real estate, bank accounts, or other assets
    Copy of the last three months of personal bank statements
    A copy of vehicle title/registration and printout of Kelly Blue Book Value
    Other assets -- must provide proof of ownership and documented proof of value

Mail the application package with a photo and a check/money order made payable to Maryland Home Improvement Commission for $370.00 to the following address:

Maryland Home Improvement Commission
P. O. Box 17409
Baltimore, Maryland 21297-1409

Application approval typically takes 2-3 weeks, and the licensee will usually receive his or her license in the mail within 10 days of approval.

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