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How to Spot Red Flags Before Hiring a Contractor in Maryland

Aria Brown

Whether for renovations, repairs, or new construction projects, hiring a contractor is a major decision for homeowners and business owners. The wrong contractor can lead to project delays, financial loss, legal issues, and safety risks. In Maryland, contractor fraud has been a growing concern, with homeowners falling victim to scams, poor workmanship, and abandoned projects.

Maryland law requires contractors to meet specific licensing, bonding, and insurance requirements to operate legally. However, not all contractors follow the law, making it crucial for property owners to do their due diligence before hiring.

This article explores key warning signs to look for before hiring a contractor in Maryland, how to verify credentials, and how checking property records can provide critical insights into a contractor’s reliability.

Why Choosing the Right Contractor Matters

Selecting the right contractor can mean the difference between a smooth, well-executed project and a financial or legal nightmare. A reliable contractor ensures compliance with state regulations, provides high-quality work, and sticks to agreed-upon timelines and budgets.

On the other hand, hiring the wrong contractor can result in:

  • Unfinished projects that leave homeowners with financial losses.
  • Poor workmanship that requires expensive repairs.
  • Legal disputes over contract breaches or unpaid subcontractors.
  • Safety hazards due to improper construction practices.

The Impact of Contractor Fraud in Maryland

Maryland homeowners frequently report contractor fraud cases. According to the Maryland Home Improvement Commission (MHIC), contractor-related complaints are among the most common consumer complaints in the state.

Common issues include:

  • Unlicensed contractors performing home improvement work illegally.
  • Scams where contractors demand large upfront payments and disappear.
  • Projects that remain unfinished for months due to mismanagement.

For example, in recent years, Maryland’s Attorney General has prosecuted multiple cases involving home improvement scams, underscoring the importance of thorough background checks before hiring a contractor.

Key Red Flags to Watch for When Hiring a Contractor

While some contractors operate with integrity, others use deceptive tactics to take advantage of unsuspecting clients. Here are the most critical warning signs to watch for when considering a contractor in Maryland.

Lack of Proper Licensing and Insurance

Maryland law requires most home improvement contractors to be licensed by the Maryland Home Improvement Commission (MHIC). A licensed contractor is more likely to follow legal standards, complete work correctly, and provide insurance protection.

Red flags include:

  • A contractor cannot provide an MHIC license number.
  • No proof of liability insurance or workers’ compensation coverage.
  • The contractor claims licensing is unnecessary for the type of work they are doing.

Before hiring, verify a contractor’s license on the Maryland Department of Labor website to ensure they are registered and in good standing.

No Physical Business Address or Online Presence

Legitimate contractors will have a business address, an online portfolio, and a verifiable reputation. Contractors who lack these may be difficult to track down if a problem arises.

Signs of concern:

  • No physical business location or office address.
  • A contractor only provides a personal phone number instead of a business line.
  • No website, portfolio, or verified online reviews.

Homeowners should check Google, Yelp, and the Better Business Bureau (BBB) for reviews and complaints before making a hiring decision.

High-Pressure Sales Tactics and Demands for Large Upfront Payments

A reputable contractor will provide clear estimates and allow homeowners time to review their options. Be cautious of contractors who:

  • Push for immediate contract signing without allowing time for research.
  • Demand over 30% upfront, especially in cash.
  • Offer discounts for cash payments, which makes transactions untraceable.

Maryland law limits upfront deposits to no more than one-third of the total contract price. If a contractor asks for more, it may be a sign of financial instability or fraud.

No Written Contract or Vague Estimates

A solid contract protects both the homeowner and the contractor by clearly outlining the work, payment schedule, and warranties.

Beware of contractors who:

  • Refuse to provide a written contract.
  • Offer vague or incomplete project estimates.
  • Avoid discussing warranties or dispute resolution terms.

Always insist on a detailed contract and review it carefully before signing.

Negative Reviews, Complaints, or Legal History

Before hiring, homeowners should check:

  • The Better Business Bureau (BBB) for complaints.
  • The Maryland Home Improvement Commission (MHIC) for disciplinary actions.
  • Property records to see if the contractor has past liens or legal disputes.

If a contractor has a history of unfinished projects, lawsuits, or financial instability, proceed with caution.

How Checking Property Records Can Help Identify Red Flags

Many homeowners overlook the value of property records in assessing a contractor’s credibility. However, these records can provide critical insights before signing a contract.

Identifying Previous Work Done by a Contractor

Property records often contain permit information and construction history, helping homeowners verify if a contractor has worked on similar projects in the area.

Key questions to ask:

  • Has the contractor completed permitted work on other properties in Maryland?
  • Do records show past projects matching what the contractor claims?
  • Are there inconsistencies in the contractor’s project history?

Checking for Liens or Legal Issues Related to the Contractor

A contractor’s financial history is just as important as their workmanship. Property records can reveal:

  • Liens filed against the contractor for unpaid debts.
  • Past legal disputes over unfinished work.
  • Unpaid subcontractors who may later seek payment from the homeowner.

By reviewing property records, homeowners can avoid hiring contractors with financial instability or legal issues that may lead to problems down the road.

Steps to Take Before Hiring a Contractor in Maryland

To ensure a smooth and secure hiring process, homeowners should follow these essential steps:

Research and Verify Credentials

  • Check the contractor’s MHIC license on the Maryland Department of Labor website.
  • Verify insurance and bonding details before signing a contract.
  • Look for past complaints or violations through state regulatory agencies.

Request References and Visit Previous Work Sites

  • Ask for at least three references from past clients.
  • Visit completed projects and inspect the quality of work.
  • Speak to homeowners about their experience with the contractor.

Compare Multiple Quotes and Review Contracts Carefully

  • Get at least three written estimates to compare pricing.
  • Ensure contracts include:
    • Project scope, timeline, and payment terms.
    • Warranty details and dispute resolution terms.
  • Avoid signing incomplete or verbal agreements.

Hiring a contractor is a significant investment, and choosing the right one is essential to avoiding fraud, poor workmanship, and financial losses. By recognizing red flags such as unlicensed contractors, vague contracts, and high-pressure sales tactics, Maryland homeowners can protect themselves from scams.

Additionally, checking property records, legal histories, and contractor permits provides an extra layer of security, ensuring that contractors have a history of completed, legally compliant projects.

By taking the time to research, verify credentials, and review legal records, property owners can hire trustworthy contractors and avoid unnecessary risks in their renovation or construction projects.