Under California home improvement contract law, the down payment a contractor may collect from an owner before any work is done or materials are delivered is limited to:
Explanation
B&P §7159.5(a)(3) caps the down payment on a home improvement contract at $1,000 or 10 percent of the contract amount, whichever is less, so on a $60,000 job the ceiling is $1,000 and not $6,000; §7159.5(a)(5) then forbids requesting or accepting any later payment that exceeds the value of work performed or material delivered. Dropping the dollar cap, as the 10 percent and 20 percent options do, is exactly the error the statute prevents on larger contracts. The $5,000 and 25 percent figures appear in no California contract type.
Law Reference: B&P §7159.5(a)(3), (a)(5)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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