Under §7159.5, a contractor may NOT do which of the following regarding down payments and progress payments?
Explanation
B&P §7159.5(a)(5) is the prohibition: 'Except for a downpayment, the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered', and the bar extends to advance payment in whole or in part from any lender or financier. The other three options are all lawful. Billing after a phase is finished is precisely what the §7159.5(a)(4) payment schedule contemplates. A $1,000 downpayment is the ceiling itself on any job of $10,000 or more, because §7159.5(a)(3) takes the LESSER of $1,000 and 10 percent. Final payment on completion is the ordinary close. Collecting ahead of the value in place is the only unlawful act among the four, and it is how most §7159 discipline cases begin.
Law Reference: Bus. & Prof. Code §7159.5(a)(3)-(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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