What is the Maryland Guaranty Fund?
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(Jan. 15, 2021) The Maryland Real Estate Commission is the regulatory agency that provides licenses to real estate brokers and agents. Show
Its office receives 400-500 consumer complaints annually. Maryland Real Estate Commission is a special funded entity in which license fees fund its operations as well as the Real Estate Guaranty Fund. Maryland Realtors have provided a good synopsis of the Guaranty Fund and it’s function. The Guaranty Fund is in place to cover a consumer’s losses when a real estate licensee’s conduct results in a financial loss to a consumer. The consumer may seek recovery from the Guaranty Fund up to $50,000. The Real Estate Guaranty Fund balance has varied over the years. In 2017, the Guaranty Fund balance was at $1.679 million. Although the Maryland Real Estate Broker’s Act requires a licensee to reimburse the Guaranty Fund when the licensee’s conduct results in an award paid by the fund, the reality is that licensees who have harmed a consumer often fail to repay the fund. The statute requires the fund to maintain a minimum balance of $250,000. Should the fund balance drop below $250,000, the commission is required to recapitalize the fund by imposing a surcharge on real estate license renewals. The existence of the Real Estate Guaranty provides consumers with greater confidence to engage a real estate agent and complete the transaction. The Guaranty Fund offers consumers an administrative remedy should a licensed real estate sales professional conduct him or herself in a manner that does not comply with Maryland law or regulation. If not for the Real Estate Guaranty Fund, consumers would have no recourse other than a lawsuit against a negligent or intentional professional action by a licensed Maryland real estate broker or agent. To function properly, the fund must remain solvent. Lauren Bunting is a licensed Associate Broker with Atlantic Shores Sotheby’s International Realty in Ocean City. The guaranty corporation does not provide financial advice or comment on the financial condition of any particular company. You can obtain advice from captive insurance agents, independent insurance brokers, and rating agencies. Generally, captive agents sell products from a single insurer. Brokers usually can sell the products of multiple insurers. Rating agencies assign comparative ratings to insurers based on various criteria. Most rating agencies are paid by the insurer to do an assessment examination and to issue a rating. This is the case with the largest and most well-known agencies, such as Standard and Poor’s, A. M. Best, Moodys, and Fitch Ratings. Since the companies pay to have themselves rated, those ratings are generally available to the public without charge. One rating agency does not accept payment from the insurer being rated—TheStreet.com. You must pay to obtain its rating results. You may also wish to contact your state insurance department regarding information on a particular company. The Life and Health Insurance Guaranty Corporation welcomes you to our website. We hope this site will assist you in finding information regarding the Life and Health Insurance Guaranty Corporation. Getting your contractors license in Maryland will involve contacting several agencies, understanding what requirements are set forth by those agencies, and paying the associated fees related to fulfilling those requirements. In almost every instance, you’ll apply to the Maryland Department of Labor, Licensing and Regulation, or the DLLR. However, general contractors may have to go through the Maryland Home Improvement Commission (MHIC) for a license that better suits their work parameters. The MHIC requires a contractor license as well as a certificate of insurance to start work. Your contracting company will also need to check in with the Maryland Department of Assessments and Taxation to make sure you are properly registered and are authorized to do business in the state of Maryland. Because becoming a contractor in Maryland is a considerable task, it helps to know the right information to untangle the complications.  Maryland Contractor License TypesThe Maryland Department of Labor, Licensing and Regulation (DLLR) may require that you are licensed to perform specific home improvement work in the state. Maryland’s DLLR offers four types of contractors licenses:
Some specialty trade licensing will be handled at the local level. To understand if you need to be licensed at the state or municipal level for these specialty trades, contact your local governmental body. Get A FREE Insurance Quote No Commitment To Buy Get My FREE Quote! Maryland Home Improvement Commission (MHIC) LicensesA home improvement license may be most fitting for a general contractor aiming to become licensed in the state of Maryland. To get your home improvement license, you will have to apply to the Maryland Home Improvement Commission (MHIC), which operates under the Maryland Department of Labor, Licensing and Regulation to regulate all home improvement contractors. Maryland Home Improvement LicenseGeneral contractors planning on performing what the MHIC deems as “home improvement work” will have to become licensed. According to the Maryland Home Improvement Commission: “Home improvement work includes alteration, remodeling, repair or replacement of a building or part of a building used as a residence. Home improvement also includes work done on individual condominium units. Home improvement does not include work done on commonly owned areas of condominiums or buildings that contain four or more single-family units.” The MHIC offers several licenses that fall under the MHIC parameters of home improvement. However, for your application to be approved, you will need to satisfy certain requirements to obtain your MHIC license. During your Maryland Home Improvement Contractors License application process, you will need to:
While most of these requirements are done at the state level, you can get bonded and insured at the state or municipal level, through business insurance and bonding companies. Maryland Home Improvement Licensing and Registration Fee SummaryYour MHIC license will include your application fee, paying into a guaranty fund, as well as a processing fee. See what a Maryland home improvement license will cost you below: The fees for a first-time license applicant include:
The fees for a renewal license applicant, valid for two years, include:
Home Improvement Contractor ExamThe MHIC will require you to register, schedule, and pass the home improvement contractor exam. It is only when you pass this exam that you can apply for a home improvement contractor license. Your exam will be administered through PSI Exams. Visit the Home Improvement Contractor and Salesperson Candidate Information Bulletin for exam scheduling, testing locations, and fees. Search Programs Get information on programs by entering your zip code and request enrollment information.
Sponsored Search Contractors Exam FeesThe MHIC home improvement contractors exam requires a standard fee of $63. Payments can be made to PSI Examination Services. Maryland Business License and RegistrationVisit the Maryland Department of Assessments and Taxation for:
You can also refer to the State of Maryland Business Express portal for any Maryland business information. Maryland Workers’ CompensationNot all injuries on the job are covered by the Maryland Workers’ Compensation Law. Therefore, if you have employees then it’s a good idea to have worker’s compensation insurance For details about how Maryland’s Workers’ Compensation employee benefits and rights work, visit the Maryland Workers’ Compensation Commission. How much is the Maryland Guaranty Fund?The Guaranty Fund cannot award more than $50,000 to any one claimant for acts of any one registered builder.
What is the guaranty fund?Guaranty Fund — established by law in every state, guaranty funds are maintained by a state's insurance commissioner to protect policyholders in the event that an insurer becomes insolvent or is unable to meet its financial obligations.
What information about the guaranty fund must be included in every Maryland sales contract?What information about the Guaranty Fund must be included in every Maryland sales contract? Sales contracts must include a written notice to the buyer of the Guaranty Fund's protection up to $50,000.
What is the amount of the one time fee that each new Maryland licensee pays into the guaranty fund?All new licensees pay a fee of $20 toward the Guaranty Fund; no Guaranty Fund fee is assessed for license renewals.
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