Unlicensed Group Homes in Maryland: Warning Signs and How to Report

Unlicensed group homes in Maryland are illegal, and operating one is a felony carrying fines up to $10,000 for a first offense, $20,000 for repeat offenses, and up to five years in prison, with each day of operation counted as a separate violation.¹ If you suspect a home is running without state authorization, the agency to contact is the Office of Health Care Quality (OHCQ), and if a resident appears to be in immediate danger, call Maryland Adult Protective Services at 1-800-917-7383.

What Makes a Group Home Illegal in Maryland

Maryland defines an “assisted living program” broadly. Any residential program that provides housing along with supportive services, supervision, personalized assistance, health-related services, or any combination of those to people who need help with daily activities like bathing, dressing, or eating falls under the definition.² The operator must hold a license from the Maryland Department of Health before accepting a single resident.³

Size does not matter. A home serving two people needs a license just as much as one serving twenty. The label doesn’t matter either. “Group home,” “boarding home,” and “adult care residence” all fall under the same rule if the operator provides housing and any form of personal care or health-related help. The narrow exceptions are family members caring for relatives, services delivered in a person’s own home, nursing homes (which are separately licensed), and certain state-certified Adult Residential Environment Programs.²

A license is tied to the specific premises listed in the application. Applicants must submit information about their finances, administrative capacity, staffing plans, policies, and the qualifications of every person who will work with residents, and the state reviews all of it before issuing the license.³ Every staff member must pass a criminal background check within 30 days before starting work, and anyone with a conviction history suggesting potential harm to residents cannot be hired.⁴ Whenever a resident is in the building, a staff member must be present.⁵ Unlicensed homes skip all of that. Nobody vets the caregivers, checks the building, or verifies that anyone is there overnight.

Warning Signs a Home Isn’t Licensed

Families rarely go looking for an unlicensed operation. They find what looks like an affordable option through word of mouth, social media, or a Craigslist ad, and the problems surface later. A few patterns tend to give these operations away.

No Real Paperwork

Licensed programs must give residents a written residency agreement covering the terms of care, services provided, and costs. Resistance to putting anything in writing, a vague one-page handout, or a request to pay month-to-month with no contract is a serious red flag. Ask to see the facility’s license. A legitimate operator will have documentation from the Department of Health and will show it.

Cash-Only Arrangements

Operators running without a license often want cash, money orders, or payments to a personal account rather than a business one. Receipts get “forgotten.” These habits make the arrangement hard to prove and harder for the state to trace. Insistence on cash without a receipt is disqualifying on its own.

Overcrowding and Poor Conditions

Unlicensed homes frequently pack in more residents than the space can safely hold. Bedrooms turned into multi-person wards, mattresses in common areas, or a general sense that far more people live there than a normal household are indicators. Licensed facilities have to meet physical plant standards for room size, bathroom access, fire safety, and accessibility. An unlicensed operator answering to nobody has no reason to keep to those standards.

Staff Who Can’t Answer Basic Questions

Ask caregivers how they were trained, what the emergency procedures are, and how medications are managed. In a licensed home, staff can answer clearly. In an unlicensed one, you tend to get deflections, or a single person who seems to do everything alone.

How to Verify a License in Five Minutes

Don’t take the operator’s word for it. The Office of Health Care Quality maintains a public directory of every licensed assisted living program in Maryland.⁶ Search by the facility’s name or its address. If it isn’t in the directory, it’s either unlicensed or operating under a different name than what it advertises.

If the operator says the license is “pending” or “being renewed,” contact OHCQ directly to confirm that before moving forward. A pending application is not authorization to accept residents.

How to Report an Unlicensed Group Home

OHCQ investigates complaints about unlicensed assisted living and has the authority to act on them. The fastest way to file is the agency’s online complaint form, which routes the report to the right unit. A paper version is available on the same page for mail or fax. You can file anonymously, though OHCQ notes your identity could be revealed if the case later goes to a hearing or trial.⁷

If a resident appears to be in immediate danger from abuse, neglect, or exploitation, also call Maryland Adult Protective Services at 1-800-917-7383. APS operates around the clock, investigates reports of harm to vulnerable adults, and can arrange emergency protective services like shelter, medical care, and personal assistance.

What to Include in the Report

A strong report gives investigators enough to work with. Try to gather:

The full street address of the property.
Names of anyone who appears to manage or own the home.
Your best estimate of how many people live there.
Specific care activities you’ve seen, such as staff helping residents with meals, mobility, or medication.
Whether residents pay for their stay, how much, and by what method.
Dates of what you observed, as specific as you can be.

You don’t need to build a legal case yourself. Investigators can work with incomplete information, but concrete dates, names, and observed services help them prioritize.

What Happens After You File

OHCQ assigns complaints to investigators who specialize in unlicensed facility oversight. Cases involving immediate health or safety risks move to the front of the queue. Investigators may make unannounced visits to assess living conditions, count residents, interview caregivers, and determine whether the operation meets the legal definition of an assisted living program.

If the investigation confirms the home is providing care without a license, OHCQ can refer the case for criminal prosecution, seek a court order to shut the facility down, or both. Complainants are typically notified of the outcome once the investigation concludes. The full process can take weeks or longer, but the initial assessment of whether residents face immediate danger happens quickly.

Penalties the Operator Faces

Under Health-General § 19-1809, knowingly operating, maintaining, or owning an assisted living program without a license is a felony.¹ The penalties escalate quickly:

First offense: a fine up to $10,000, imprisonment up to five years, or both.
Subsequent offenses: a fine up to $20,000, imprisonment up to five years, or both.
Each day the unlicensed program continues operating is treated as a separate offense, so penalties can accumulate rapidly.

The statute also allows accelerated prosecution. If investigators find credible evidence that residents have been subjected to neglect, exploitation, or abuse, or if the operator refuses to cooperate with an OHCQ investigation, the state can move to criminal charges without waiting for the investigation to conclude.¹

Running an unlicensed assisted living program is also classified as a violation of Maryland’s Consumer Protection Act.¹ Families who paid for care in an unlicensed facility may have grounds for a civil lawsuit separate from any criminal case the state pursues.

If Your Loved One Is Already in an Unlicensed Home

Finding out that a family member is already living in an unlicensed facility is alarming. The instinct to remove them is usually right, but the move needs care, especially for residents with complex medical needs or cognitive impairment.

Start by documenting what you see. Photograph the living conditions. Save payment records and any text messages with the operator. Write down what you observe about staffing and care. This evidence matters for future legal action and helps a new facility understand your family member’s current situation.

File a complaint with OHCQ. If you believe your loved one has been harmed, call Maryland Adult Protective Services at 1-800-917-7383. APS can investigate allegations of abuse, neglect, or exploitation and connect your family member with emergency services including temporary shelter and medical care. APS cannot forcibly remove a competent adult who chooses to stay, but they can assess the situation and offer protective services.

While arranging the move, the OHCQ licensee directory is the best starting point for verified alternatives. Your local Area Agency on Aging can help identify openings and walk through Medicaid or other funding if cost is the reason the family ended up in an unlicensed home in the first place.

A Note on Tax Deductions

Families sometimes claim a loved one’s care costs as medical expenses. The IRS allows deductions for care in a “nursing home, home for the aged, or similar institution” when the primary reason for being there is medical care, and in that case the deduction covers meals and lodging as well. If the person is there mainly for personal reasons, only the portion tied to actual medical or nursing services qualifies.⁸

The IRS does not specifically address licensing status as a prerequisite for the deduction, but claiming one for payments to an unlicensed operator creates practical problems. There is no formal documentation of services, cash payments are hard to substantiate, and the missing license makes it harder to show the facility qualifies as an institution providing medical care rather than plain housing. Anyone who has been paying an unlicensed home should talk to a tax professional before claiming a deduction and should keep every receipt and record they have.

1
Maryland General Assembly. Maryland Code Health-General 19-1809 – Operation, Maintenance or Ownership of Assisted Living Program Without a License Prohibited
2
Maryland General Assembly. Maryland Code Health-General 19-1801 – Assisted Living Program Defined
3
Legal Information Institute. Maryland Code of Maryland Regulations 10.07.14.04 – License Required
4
Legal Information Institute. Maryland Code of Maryland Regulations 10.07.14.19 – Other Staff – Qualifications
5
Legal Information Institute. Maryland Code of Maryland Regulations 10.07.14.14 – Staffing Plan
6
Office of Health Care Quality. OHCQ Licensee Directories
7
Office of Health Care Quality. File a Complaint
8
Internal Revenue Service. Publication 502 – Medical and Dental Expenses