How Much Deposit Can a Contractor Ask For in Minnesota?
Minnesota does not set a single percentage cap on a contractor deposit; its protections are specific statutory rules on licensing, registration, written contracts, cancellation, or a recovery fund, each verified against its primary source.
Minnesota 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
Minnesota requires that all agreements between a licensed residential building contractor and a customer for the licensee's services, including proposals, estimates, bids, contracts, and change orders, be in writing. 1
Before entering into an agreement, a Minnesota licensed contractor must provide the prospective customer with written performance guidelines for the services to be performed. 2
Minnesota's contractor recovery fund caps compensation to any single owner or lessee at $100,000 per licensee. 3
Minnesota's contractor recovery fund limits total compensation paid to all owners and lessees to $550,000 per licensee. 4
To recover from Minnesota's contractor recovery fund, an owner or lessee must have obtained a final judgment against the licensee on grounds of fraudulent, deceptive, or dishonest practices, conversion of funds, or failure of performance. 5
Sources
Minnesota requires that all agreements between a licensed residential building contractor and a customer for the licensee's services, including proposals, estimates, bids, contracts, and change orders, be in writing.
Before entering into an agreement, a Minnesota licensed contractor must provide the prospective customer with written performance guidelines for the services to be performed.
Minnesota's contractor recovery fund caps compensation to any single owner or lessee at $100,000 per licensee.
Minnesota's contractor recovery fund limits total compensation paid to all owners and lessees to $550,000 per licensee.
To recover from Minnesota's contractor recovery fund, an owner or lessee must have obtained a final judgment against the licensee on grounds of fraudulent, deceptive, or dishonest practices, conversion of funds, or failure of performance.
Frequently asked questions
- Does Minnesota cap how much deposit a contractor can ask for?
- Minnesota 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 Minnesota?
- The rules cited on this page, drawn from Minnesota 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.