How Much Deposit Can a Contractor Ask For in Virginia?
Virginia does not cap a deposit by percentage, but a Contractor Transaction Recovery Fund can repay homeowners for a regulant’s improper or dishonest conduct, subject to a per-regulant limit.
Virginia backs homeowners with the Contractor Transaction Recovery Fund rather than a fixed deposit cap. When a licensed contractor, a regulant, engages in improper or dishonest conduct in a contracting transaction, a homeowner may file a verified claim against the Fund.1 The Fund does not cover an ordinary business dispute, and it is subject to a limit on how much can be paid out over one contractor. This page explains what the Fund covers and what it does not.
What the Recovery Fund covers
The Fund is tied to a court judgment against the contractor. In connection with a transaction involving contracting, the claimant may file a verified claim once the regulant's improper or dishonest conduct is established.1 The Fund is aimed at homeowners whose contract with the regulant was for their own residence in the Commonwealth.
The key limit is what "improper or dishonest conduct" means. It does not include mere breach of contract.2 It reaches the wrongful taking or conversion of money or property, and conduct involving fraud or material misrepresentation, which is the situation of a contractor who takes a deposit dishonestly rather than one who simply does the job poorly or late.
The per-contractor limit on the Fund
The Fund is capped per contractor. The aggregate of claims against the Fund based upon unpaid judgments arising out of the improper or dishonest conduct of any one regulant involving contracting is limited by the Board to $100,000 during any biennium.3 Where several homeowners were harmed by the same contractor, that ceiling is shared among them.
Because recovery runs through a judgment and is capped, the practical protections before you pay still matter most: confirm the contractor is licensed, keep the deposit proportionate, and put the scope and payment schedule in writing.
Sources
In connection with a transaction involving contracting, a Virginia claimant may file a verified claim against the Contractor Transaction Recovery Fund once the regulant's improper or dishonest conduct is established.
For the Virginia Contractor Transaction Recovery Fund, improper or dishonest conduct does not include mere breach of contract.
The aggregate of claims against the Fund based upon unpaid judgments arising out of the improper or dishonest conduct of any one regulant involving contracting is limited by the Board to $100,000 during any biennium.
Frequently asked questions
- Does Virginia cap how much deposit a contractor can ask for?
- Virginia does not set a statutory percentage cap. It backs homeowners with the Contractor Transaction Recovery Fund, which can repay losses from a regulant’s improper or dishonest conduct, subject to a per-contractor limit.
- What does the Virginia Contractor Transaction Recovery Fund cover?
- It covers improper or dishonest conduct, which reaches the wrongful taking or conversion of money or property and conduct involving fraud. It does not include mere breach of contract, so an ordinary dispute over quality or timing is not enough.
- How much can the Virginia Recovery Fund pay out against one contractor?
- The aggregate of claims based on unpaid judgments arising out of one regulant’s improper or dishonest conduct in contracting is limited by the Board to $100,000 during any biennium, shared among the homeowners harmed.
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.