How Much Deposit Can a Contractor Ask For in California?
California caps a home improvement downpayment at $1,000 or 10 percent of the contract price, whichever is less, and limits every later payment to the value of work actually done.
California is one of the states that caps a construction deposit directly. On a home improvement contract, the downpayment a contractor can ask for is limited to $1,000 or 10 percent of the contract price, whichever is the smaller number.1 The rest of the money has to track the work: any payment after the downpayment cannot get ahead of what the contractor has actually built or delivered. This page explains the cap, how progress payments have to be structured, and what happens when a contractor takes the money and walks off the job.
The downpayment cap and how payments must be scheduled
California does not leave the deposit to negotiation. If a home improvement contract calls for a downpayment, that downpayment may not exceed $1,000 or 10 percent of the contract amount, whichever amount is less.1 On a $40,000 remodel the ten percent figure would be $4,000, but because the flat $1,000 is the smaller of the two, $1,000 is the ceiling.
Beyond the downpayment, the money has to be tied to the work. When a contract provides for payments before the job is finished, it must include a schedule of payments stated in dollars and cents that references the specific amount of work or services to be performed.2 And except for the downpayment, a contractor may neither request nor accept a payment that exceeds the value of the work already performed or the material already delivered.3 Together those rules mean a California homeowner should never be far ahead of the contractor on money.
What happens if the contractor abandons the job
If a licensed contractor takes the money and stops, California treats abandonment as a licensing matter. Abandonment of a construction project or operation without legal excuse is a cause for disciplinary action against the license.4 A complaint goes to the Contractors State License Board, which can discipline the license, though licensing discipline is separate from getting your money back.
Because the deposit cap and the progress-payment rule keep your exposure small if they are followed, the practical protection in California is to hold the contractor to them: keep the downpayment at or below the statutory ceiling, insist on a written payment schedule tied to milestones, and refuse to pay ahead of the work.
Sources
In California, if a home improvement contract calls for a downpayment, the downpayment may not exceed $1,000 or 10 percent of the contract amount, whichever amount is less.
When a California home improvement contract provides for payments before the work is complete, it must include a schedule of payments stated in dollars and cents that references the amount of work or services to be performed.
Except for the downpayment, a California contractor may neither request nor accept a payment that exceeds the value of the work performed or material delivered.
Abandonment without legal excuse of any construction project or operation is a cause for disciplinary action against a California contractor.
Frequently asked questions
- How much deposit can a contractor legally ask for in California?
- For a home improvement contract, the downpayment cannot exceed $1,000 or 10 percent of the contract amount, whichever is less. That is a hard statutory cap, not a negotiable figure.
- Can a California contractor ask for large progress payments up front?
- No. Apart from the capped downpayment, a contractor cannot request or accept a payment that exceeds the value of the work already performed or the material already delivered, and the contract must set out a payment schedule in dollars and cents tied to the work.
- What can I do if a California contractor takes my deposit and abandons the job?
- Abandoning a project without legal excuse is a cause for disciplinary action against the license, and you can complain to the Contractors State License Board. Board discipline is separate from recovering your money, which usually takes a court judgment.
Last reviewed July 29, 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.