What is prohibited concerning payment for a home improvement?

In the context of home improvement sales in Maryland, both receiving any payment before the contract is signed and accepting a deposit of more than one-third of the contract price are prohibited practices.

Firstly, it is critical to have a legally binding contract in place before any money exchanges hands. This is to ensure that both the contractor and the homeowner are protected and have a clear understanding of the terms and obligations of the project. Accepting payment before the contract is signed can lead to miscommunication and disputes regarding what work is to be performed, potentially resulting in legal issues.

Secondly, the limitation on deposit amounts—specifically, capping it at one-third of the total contract price—is designed to protect consumers from being overcharged upfront. By restricting the maximum amount a contractor can request at the outset, the law helps ensure that contractors have a vested interest in completing the work, rather than taking a large initial payment and neglecting the project. This measure encourages fairness and helps maintain a balance in the financial expectations of both parties.

Together, these regulations serve to protect consumers in home improvement contracts, ensuring that their rights are upheld during the sales process. Hence, both practices mentioned are prohibited under Maryland law.