How Much Deposit Can a Contractor Ask For in Alabama?
Alabama does not set a single percentage cap on a contractor deposit; its protections are specific statutory rules, each verified against its primary source.
Alabama regulates home improvement and contractors through its statutes rather than a single deposit percentage. The rules below each bear on a homeowner's deposit, and every one is tied to its primary source and verified against it.
Rules that bear on your deposit
Under Alabama's Home Builders Licensure law, the cost of the undertaking is defined as the total cost of materials, labor, supervision, overhead, and profit. 1
An Alabama residential home builder without the required license may not bring or maintain any action to enforce a residential home building contract. 2
The Alabama Home Builders Licensure Board may levy administrative fines not exceeding $5,000 for each violation of the chapter or the board's rules. 3
An aggrieved Alabama homeowner may recover actual economic damages, excluding interest and court costs, resulting from a licensee's violation of the chapter. 4
Alabama's Homeowners' Recovery Fund makes payments only to homeowners who file a complaint with the board under Section 34-14A-8(b). 5
Each Alabama home builder licensee may be ordered to pay a fee of up to $60 per year for deposit in the Homeowners' Recovery Fund. 6
Sources
Under Alabama's Home Builders Licensure law, the cost of the undertaking is defined as the total cost of materials, labor, supervision, overhead, and profit.
An Alabama residential home builder without the required license may not bring or maintain any action to enforce a residential home building contract.
The Alabama Home Builders Licensure Board may levy administrative fines not exceeding $5,000 for each violation of the chapter or the board's rules.
An aggrieved Alabama homeowner may recover actual economic damages, excluding interest and court costs, resulting from a licensee's violation of the chapter.
Alabama's Homeowners' Recovery Fund makes payments only to homeowners who file a complaint with the board under Section 34-14A-8(b).
Each Alabama home builder licensee may be ordered to pay a fee of up to $60 per year for deposit in the Homeowners' Recovery Fund.
Frequently asked questions
- Does Alabama cap how much deposit a contractor can ask for?
- Alabama does not set a single percentage deposit cap in these provisions. Its protections are the specific statutory rules on this page, each tied to its primary source.
- What protects my deposit in Alabama?
- The rules cited on this page, drawn from Alabama law, are what stand behind a deposit; confirm the contractor is properly licensed or registered before you pay.
Last reviewed August 3, 2026
This page is general information about state law, not legal advice. Laws change, and how they apply depends on the facts of your situation.