A contractor wishes to require a larger down payment than the law allows because a custom-ordered material must be paid for up front. The proper way to handle this is to:
Explanation
B&P §7159.5(a)(3) caps the downpayment at $1,000 or 10 percent of the contract amount, whichever is less, and §7159.5(a)(8) exempts from that cap a contractor who provides a performance and payment bond or joint control approved by the registrar - that, not a bigger deposit, is how a special-order purchase gets funded, with any finance charge set out separately from the contract amount. The cap is a consumer protection the homeowner cannot waive. Relabelling an oversized deposit does not make it lawful. And §7159.5(a)(5) bars requesting or accepting payment beyond the value of work performed or material delivered.
Law Reference: B&P Code §7159.5(a)(3), (a)(5), (a)(8)This topic, taught in full in the CSLB Law & Business guide. CSLB Law & Business — Complete Study Guide (2026) — PDF + EPUB, $24.99 · 14-day refund →
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