How much deposit can a contractor legally ask for in California?
This is one of the most-Googled home improvement questions in California — and the answer is refreshingly clear.
The statute
California Business & Professions Code §7159(d) caps the down payment on a home improvement contract at 10% of the contract price OR $1,000 — whichever is LESS. The Contractors State License Board (CSLB) enforces this.
What it means in practice
If your total is $28,000, the maximum legal deposit is $1,000 (because 10% would be $2,800, but the $1,000 cap wins). A contractor asking for 50% upfront on a residential remodel is asking you to break state law with them.
Why the cap exists
It exists because upfront money is the #1 way homeowners lose money to disappearing contractors. When the deposit is small, the contractor has to keep working to get paid.
Exceptions
The rule applies to home improvement contracts as defined by CSLB. New-home construction under different licensing frameworks can differ. When in doubt, verify on CSLB’s consumer site.
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