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How To Get a Contractor’s License in Maryland

Contractor Tips , Posted by Charlotte Smith on

How To Get a Contractor’s License in Maryland

On average, contractors in Maryland earn an average annual salary of $67,825. The highest earners pull in as much as $120,000.

Of course, this depends on your specialty and your experience. However, there is a lot of room for growth in the field making it a good opportunity if you decide to go the independent route or join a company.

If you want to take advantage of these industry perks, you have to start out by getting your Contractor’s License in Maryland. Without it, there isn't much that you can do and the Maryland Department of Labor makes that very clear. There are a few different types of licenses available for contractors in Maryland, four to be precise.

Also, your area of expertise and whether or not you will be working for yourself or another company will determine your path to becoming licensed.

Read on for more information about how to get a contractor’s license in MD so that you can start your new career or enhance your current career, the right way.

Why Do You Need a Contractor’s License in Maryland?

The main reason that you'll need a contractor's license in Maryland is that the state requires it. This means that for you to do any type of contract work, whether to repair, replace, or even remodel even a part of a residential building, you need to be licensed before starting. We should also say that, in Maryland, licensing can seem somewhat inconsistent.

For instance, a general contractor's license will vary by state and county. Some county licenses may not require an exam while state-level licenses will. However, if you're working as your own company or under your own entity, you must register with the Office of the Attorney General's Home Builder Registration Unit.

In addition, a license helps to protect you and the client from legal or financial risks. If you're unlicensed, it means the work you do isn't insured. You could be held personally liable for potential property damage and/or bodily harm or injury on the work site.

In cases like this, the homeowner is held liable for hiring an unlicensed contractor just as you would be for agreeing to do the work. To start your career properly and to avoid the risk of these potential issues, you will want to ensure that you get a Maryland contractor's license.

Also, the state of Maryland no longer issues temporary contractor licenses. People still wonder if this is still an option when needed but temporary licensing is no longer offered as it was taken out of the state's law in 1999.

What Are the Requirements?

Each type of license has its own set of requirements that must be met before you can receive your certification as a contractor in Maryland. The first step in the process of getting your contractor license in Maryland is to take the licensing exam. 

Aside from passing the exam that correctly corresponds with the license you're getting, you should know that your requirements will depend on the license you choose. 

For example, if you want a construction license, this will be based on different requirements depending on the county you're working in. Let's take a close look at a more specific discipline such as home improvement. The main thing that applicants will need before applying for a license is to be able to prove two years of work experience.

This means you should be able to provide proof that you've had at least two years of experience in construction or some type of work involving home improvement.

You should also know that this does include education. So, if you've taken formal education within the construction industry, this could count as the prerequisite. In addition to the general required items you'll need;

  • Pass a check on your credit
  • To be able to provide proof of a surety bond of $20,000 minimum
  • Obtain general liability insurance of at least $50,000
  • Ensure you release any conviction records
  • Payment of all associated fees
  • Bank statements
  • A registered business name with the Department of Assessment and Taxation

Once you complete all of these items, you will qualify for that specific license. It's also important to note that you can get bonded at the municipal level if needed. 

What About the Cost?

The cost of getting your license will require a one-time fee of $370, which is also your application fee. You will also need to pay any costs associated with the exam, which is $63 as of 2022.

Once you get your license, it will last for two years before you need to renew it and the renewal fee will be $250 once that time comes. Also, you should know that in Maryland, it's a requirement to pay a $150 fee to a guaranty fund. This is a standard requirement for all general contractors seeking contractor licensing in the state.

The test itself will consist of 55 questions and once completed the testing company will submit your results. You will need a minimum score of 70% to pass.

All fees are non-refundable. This will be the case regardless of your application being denied, approved, or withdrawn for any reason. 

Should You Go Independent or Work for a Company?

When you are getting started in the contracting business, it's a good idea to work for a contractor who has experience in the industry especially if you're new to the specialty. The reason for this is to gain experience of your own and to learn how the trade is run not only from a construction standpoint but from a business direction as well.

Once you have a few years of experience under your belt and have learned as much as you can from working as an employee, you can decide whether or not it would be a good idea to go independent or work for another company. Every contractor has different goals and priorities, so you will need to figure out what works best for you. However, if you do have prior experience and also attended a formal education training program, you may decide that the best option is to go independent right away.

Overall, the decision should be based on circumstance, personal goals, and what you think is the best choice for your career at the time of passing the contractor's license exam. There are a few direct perks of working as an independent contractor such as being able to choose your own work and the potential to make more money per project. Not only that, but independent contractors have more say in their take home earnings as they can set their own fees and additional markups for projects.

You should also know that you can be an independent contractor and work for a company on a contractual basis. This might be a good option if you want to hop from job to job while gaining unique experiences and not having to commit to one company or job.

Also, when you join a high-quality program, you will receive things like one-on-one tutoring and consultations for starting your own business.

 

What Happens When You Work Without a License?

First, consider the fact that your reputation is on the line if you decide to take on work as a contractor without a license. Even if you had a contractor's license at a certain point but then had it revoked, you are still considered to not have one on file with the state. This will also be the case if you're doing electrical or plumbing work along with HVAC projects.

Working as an unlicensed contractor or someone hiring a contractor that is unlicensed is illegal in Maryland just like it is in most states. This means that certain fines will be associated with violating this rule. 

The MHIC is able to investigate any complaints made by clients that you have. This means that homeowners can request an investigation to be opened if needed. This can result in monetary fines and legal action taken against you and the standing of your license.

This could be a fine of $5,000 or even imprisonment. The time for imprisonment could be a minimum of 30 days and a maximum of two years. In some cases, those that violate licensing law could end up having to comply with both and pay a fine as well as doing time in prison.

Keep in mind that in the state of Maryland, you can't work under the license of someone else. Anyone that will be working as a subcontractor or contractor will need to have a valid contractor's license with the state to take any type of work.

The Perks of Being a General Contractor in Maryland

If you choose to become a general contractor, there are a few perks that come along with the job. For the main point, you will have access to tap into a financial pool that you can easily scale. Having an active license in good standing is the best way to ensure trust from potential clients and that trust will open doors to high-paying projects.

Also, with that, you may notice spikes in reviews or referrals which leads to more work and in turn, more money per job. A license also proves your experience and that you have formally recognized knowledge in the specialty you're working within.

In addition, having a license issued by Maryland will show your clients that you are both bonded and insured, giving them peace of mind. You also have to consider that the main benefit is being able to work in general because holding a contractor's license in Maryland is mandatory to do the work that you are trained to do. 

Overall, this is the top way to show your competence in the field and it also makes you responsible for your work. If you plan to work as an independent contractor, being properly licensed will not only verify your portfolio but enhance it.

The Four Main Types of Contractor Licenses in Maryland

With the type of license you decide to pursue, you will need to also know what level you will need to be licensed whether at the local, state, or municipal level. The types in Maryland are:

  • Home improvement license
  • Master electrical
  • Master or journeyman license in plumbing
  • Master or journeyman in HVAC (restricted) 

Regardless of the type of license you decide to go for, the Maryland Home Improvement Commission's meant to regulate contractors. This applies to work done on individual units, residential properties, and multi-unit properties. Just like with any type of license, the bond required for contractors to have will guarantee safety from any financial issues for both yourself as the contractor and the person hiring for work done.

If you plan to build homes versus only home improvement, you will need to be registered with the Home Builder Registration Unit as mentioned. This unit falls within the office of the Attorney General.

High-Quality Training: The Resources You Need in One Place

To be successful in your career as a contractor, you will need a contractor’s license in Maryland. It is important that you understand the types of licenses available to you and the requirements for each one. Once you have obtained your license, you will have more freedom in the industry and be able to work on larger and more lucrative projects.

To get started, work with the Contractor Training Center to ensure you get the proper training and resources you need to navigate the trade. See our Maryland HIC Exam prep courses here or book a call with a licensing expert to learn more about your next steps to obtain a license!