Keep the deposit small and the payments tied to finished, inspected stages, never to dates. Hold the final payment until the work is complete and you are satisfied. Some states cap deposits: California limits a home improvement down payment to the lesser of $1,000 or 10% of the contract price. Pay by check or credit card, not cash or wire.
The deposit
The FTC advises not paying the full amount up front and notes that some states limit how much a contractor can ask for as a down payment [1]. California’s rule is one casaq has verified from the statute:
“the downpayment shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less.”
On a California home improvement contract, the down payment is capped at the lesser of $1,000 or 10% of the contract price.
What the law says, quoted from the official text. This is not legal or insurance advice; for your situation, ask your state’s insurance department, contractor board, attorney general or an attorney.
casaq shows a state deposit rule only after the statute has been checked. Where no rule is on file, a deposit can still be reasonable or not: ask what it pays for (often materials ordered for your job) and whether it is refundable if the job doesn’t start.
Progress payments
Tie each payment to a stage you can see: materials delivered, rough-in done and inspected, installation complete. California requires that any payments before completion follow a schedule in dollars and cents tied to the work or materials they cover [2].
| Stage | Example of what you can verify |
|---|---|
| Deposit | Signed contract; permit applied for |
| Materials | Materials on site, matching the contract’s brand and model |
| Rough-in | Work passes the rough inspection, if one is required |
| Completion | Final inspection passed, punch list done, cleanup finished |
| Final payment | Lien releases received, warranty documents in hand |
The final payment
Never make the final payment until the work is done and you’re satisfied with it [1]. Before paying, ask for lien releases from the contractor and major suppliers, the warranty registration, manuals and the final permit sign-off. Put them in your home record.
How you pay
Pay by credit card or check, never by wire transfer, gift card, payment app, cryptocurrency or cash; once those are sent, getting money back is almost impossible [3]. Keep every invoice and receipt [3].
“You, the buyer, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction.”
The rule covers sales of $25 or more made at the buyer’s residence (and $130 or more at temporary locations such as hotel rooms or fairgrounds), even when the buyer invited the seller. The seller must give a completed receipt or contract with that statement, plus two copies of a “Notice of Cancellation” form. It does not cover, among other exceptions, repairs or maintenance the buyer asked the seller to come and do (extra goods or services sold during that visit are covered again), or a bona fide emergency where the buyer signs a handwritten waiver.
What the law says, quoted from the official text. This is not legal or insurance advice; for your situation, ask your state’s insurance department, contractor board, attorney general or an attorney.
Sources
- FTC, “How To Avoid a Home Improvement Scam” (July 2022). Retrieved 2026-10-05.
- California Business and Professions Code §7159.5. Retrieved 2026-10-05.
- FTC, “How To Avoid Scams After Weather Emergencies and Natural Disasters”. Retrieved 2026-10-05.
- FTC, “Buyer’s Remorse: The FTC’s Cooling-Off Rule May Help” (September 2025). Retrieved 2026-10-05.
Information, not legal, insurance or engineering advice. Spot something wrong? Send a correction; accepted corrections are logged publicly with a date.