Craig Schleunes thought he had done everything right.
When he started looking for a contractor to paint the five bedrooms in his Cockeysville home, he wanted to make sure he was choosing the right one.
Schleunes interviewed and checked the references of several contractors. He made sure they were licensed by the Maryland Home Improvement Commission and checked to see if MHIC had complaints listed about any of them.
Nothing turned up, and he was satisfied that he had covered all the bases. But as soon as he signed a contract, things started going wrong, Schleunes said.
Workers began showing up that he didn't recognize.
Instead of stripping and prepping the walls before painting, the contractor ripped off the wallpaper and painted over the old glue, causing the paint to crack and fall off when it dried.
Schleunes, unhappy and disgusted with the work, looked to the MHIC for help. He wanted to recover some of the damages from the MHIC's Guaranty Fund -- a protection he thought was available because he used a licensed contractor.
But what he thought and what he got were different.
"What is the point of using a licensed contractor if the system doesn't work for you? We did everything we were supposed to and still ended up with the short end of the stick," Schleunes said.
The MHIC advertises protection for consumers through its Guaranty Fund, a pool of money collected from Maryland's licensed contractors that is designed to compensate homeowners for the poor workmanship of a licensed contractor.
But for homeowners like Schleunes, payment from the fund is not guaranteed. In the end, an administrative law judge, part of the MHIC hearing process, determined that Schleunes could not collect from the fund because he did not sustain an "actual loss" -- meaning that the damage to the home was insufficient for a payout.
Less than half of the homeowners who have filed a claim against the fund since 1991 have received a payout and many who have been awarded money don't receive enough to make repairs.
The fund -- established in 1985 -- can award up to $10,000 per homeowner.
Since 1991, $7,116,181 has been paid from the fund, which is supported by fees assessed to contractors by the MHIC. Of the 4,323 claims made against the fund since 1991, 2,103 -- or 48 percent -- have received a payout.
Last year, $834,574 was paid from the fund to compensate 191 of the 370 homeowners who made a claim against a contractor. As of June 30, when the fund's fiscal year ended, the balance of the Guaranty Fund was $1,601,462.
An independent contractor hired by the MHIC to investigate Schleunes' claim said that the work was not up to the standards of the industry and that it would cost almost $2,000 to correct.
The MHIC decided not to award Schleunes compensation from the Guaranty Fund because it said he did not "sustain an actual loss."
To be compensated from the fund, homeowners must have sustained what the MHIC calls an "actual loss" -- the cost of repairing or completing the work minus the value of the original materials and work provided by the contractor.
In Schleunes' case, the cost of the damage to his home was determined to be less than the cost of the contractor. After the three-year battle, he chose not to pursue the matter.
The failed claim has caused Schleunes to join other Maryland homeowners who are questioning the point of using an MHIC licensed contractor if the results can be the same as using an unlicensed contractor.
"I was just floored at how bad a job was being done to our home. We were wronged and our house was damaged and we didn't get a thing. It was always my impression that this system was here to protect the consumer," Schleunes said.
Georgia Duffee, executive director of MHIC, says the Guaranty Fund claims process is effective protection for homeowners -- even if everyone doesn't receive a payout.
"We would hope that the protection that the Guaranty Fund offers is one of the major reasons people choose licensed contractors," Duffee said. "The system is not perfect -- no system is. But that's why we have all the checks and balances built into the process. We want to protect everyone and make sure everyone gets a fair shake."
Duffee said many homeowners do not understand the limitations of the fund and expect a payout for things that are not covered. By law, the MHIC can't award a homeowner money for consequential damages, personal injury, attorney's fees, court costs or interest.
For example, the fund would pay to fix the hole in a leaky roof but would not pay for water damage to walls, floors or furniture as a result of the leak.
"The burden of proof -- by law -- is on the homeowner. A lot of them don't understand that," Duffee said.
Baltimore resident Ida Stoker believes she should have received more than $2,200 from the fund after a licensed contractor built an addition on her home so poorly that the sliding glass door was installed upside down.