What happens if a contractor accepts an excessive deposit for a project?

When a contractor accepts an excessive deposit for a project, they may lose their license due to violations of state regulations governing home improvement contracts. In Maryland, the law sets limits on the amount a contractor can demand upfront to protect consumers. These regulations are in place to prevent potential financial exploitation and ensure that contractors maintain ethical practices. If a contractor exceeds these deposit limits, it can be viewed as a serious breach of trust and professionalism. As part of the regulatory framework, losing a license serves as a significant consequence aimed at maintaining industry standards and protecting consumers from unscrupulous practices.

While there may be other repercussions such as fines or the obligation to return the excess amount, the potential loss of their license is one of the most consequential outcomes for a contractor who does not adhere to these rules. This reflects the seriousness with which the state treats the protection of homeowners in the home improvement industry.