Baltimore, MD asked in Business Law and Construction Law for Maryland

Q: how much should a contractor ask for a down payment on a roof replacement

This is only a small roof

1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Construction Law Lawyer
  • Rockville, MD
  • Licensed in Maryland

A: Assuming this is for a residence, this is a home improvement project. By Maryland law, a contractor on a home improvement contract must hold a license from the Maryland Home Improvement Commission (MHIC). The contract must comply with multiple legal requirements, among which is that a down payment may not exceed one-third of the contract price. Their MHIC# must also be on the contract. It is common for an MHIC contractor to demand 1/3 down at signing, then 1/3 at commencement of the work, and then 1/3 at completion. The money up front and at commencement is typically necessary to purchase materials for the job, and to have the means to pay laborers brought to the project. You should check the contractor's licensing status directly on the Maryland Department of Labor's website, which has a look-up tool using the name of the roofing company, the individual name of the contractor, or the MHIC license number. Confirm the license is in good standing and not suspended. If not licensed, the roofer is acting illegally and cannot enforce the contract, but more importantly, you should not contract with an unlicensed contractor. You can make a claim for faulty or defective work against the Maryland Guaranty Fund in the event a licensed contractor performs a faulty job, or skips out with your money; however, you cannot make such a claim if the contractor was not licensed by the MHIC.

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