How much can I actually recover?

The lesser of $30,000 and what you paid that contractor, subject to a $250,000 total across all claimants against the same business. Awards above that are prorated so every claimant receives the same percentage.

My contractor was unlicensed. Is there anything I can do?

Not through the Guaranty Fund. Ordinary civil remedies remain available to you, which means suing and then collecting, and collection is the hard part with a business that was operating outside the licensing system in the first place.

How long does a claim take?

The Commission acknowledges the process is lengthy, largely because most claims require a hearing and hearing dates are limited. Claims of $7,500 or less can be decided without a hearing. Claims involving habitability of a primary residence may be prioritized, particularly where the homeowner is elderly or has limited income.

My contract has an arbitration clause. Does that change anything?

Yes. Maryland law requires you to make a good faith effort to arbitrate before recovering from the Fund. You may still file the claim within the three year window while arbitration proceeds, and you should, because the clock does not pause for you.

Guide

The Maryland Home Improvement Guaranty Fund

This is the reason the license check matters. It is not paperwork. It decides whether you have any recourse at all.

Or the amount you actually paid that contractor, whichever is less.

What it is

The Maryland Home Improvement Commission administers a fund that reimburses homeowners for actual losses caused by a licensed contractor who performed work in an unworkmanlike, incorrect or incomplete manner, or who abandoned the job.

It is paid for by licensed contractors, who contribute an assessment when they obtain a license and again at each renewal. That is why it is closed to work done by anyone outside the system.

The cap is not simply thirty thousand dollars

The maximum recovery is $30,000 per claimant, or the amount you actually paid that contractor, whichever is less. If you paid a deposit of $8,000 and the contractor disappeared, $8,000 is your ceiling regardless of what completion now costs.

There is a second ceiling. The Fund pays a maximum of $250,000 across all claimants against the same contractor. If approved claims exceed that, the Commission prorates them, and everyone receives the same percentage of their award.

If the contractor was unlicensed you get nothing

There is no partial recovery, no reduced award and no discretionary exception. The Commission states it plainly: the Guaranty Fund is not available to homeowners who hire unlicensed contractors.

The contractor must also have been licensed at the time the contract was signed. Someone who obtains a license later does not bring your earlier contract inside the fence.

What it does not cover

It covers actual loss, meaning the cost of restoration, repair, replacement or completion. It does not cover consequential damages, attorney's fees or court costs.

There is a three year clock. A claim must be brought within three years of when you discovered the loss, or when reasonable diligence should have revealed it.

A complaint and a claim are separate filings. Filing a complaint triggers an investigation. Recovering money requires a separate claim form, which you receive after the complaint is investigated.

What to keep, starting now

A Guaranty Fund claim runs on documents. The signed contract, every change order, canceled checks or card statements proving what you paid, photographs of the work, and two or three written estimates from licensed contractors showing what correction costs.

Pay by check or card rather than cash. Cash leaves no proof of payment, and proof of payment is what sets your ceiling.

Common questions

How much can I actually recover?: The lesser of $30,000 and what you paid that contractor, subject to a $250,000 total across all claimants against the same business. Awards above that are prorated so every claimant receives the same percentage.
My contractor was unlicensed. Is there anything I can do?: Not through the Guaranty Fund. Ordinary civil remedies remain available to you, which means suing and then collecting, and collection is the hard part with a business that was operating outside the licensing system in the first place.
How long does a claim take?: The Commission acknowledges the process is lengthy, largely because most claims require a hearing and hearing dates are limited. Claims of $7,500 or less can be decided without a hearing. Claims involving habitability of a primary residence may be prioritized, particularly where the homeowner is elderly or has limited income.
My contract has an arbitration clause. Does that change anything?: Yes. Maryland law requires you to make a good faith effort to arbitrate before recovering from the Fund. You may still file the claim within the three year window while arbitration proceeds, and you should, because the clock does not pause for you.

This page is general information, not legal, medical or financial advice. Program terms and statutory figures change. Confirm anything you intend to rely on with the issuing authority.