California contractors · checked 18 October 2026
The most you can take up front: $1,000 or 10%, whichever is less.
On a home improvement contract in California, the down payment can't be more than $1,000 or 10% of the contract amount, whichever is less.
In numbers
Below $10,000 the 10% is the limit. From $10,000 up, the limit is $1,000.
| Contract amount | Max down payment |
|---|---|
| $4,000 | $400 |
| $8,500 | $850 |
| $10,000 | $1,000 |
| $45,000 | $1,000 |
Who it covers
Home improvement contracts between a contractor and a homeowner or tenant, for work on their home. It applies whether you're a general or a specialty contractor, and whether you're licensed or should be.
Your contract has to say it
If you charge a down payment, the contract needs a "Downpayment" heading, the amount, and this statement in at least 12‑point bold type:
THE DOWNPAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE CONTRACT PRICE, WHICHEVER IS LESS.
The exception
The cap doesn't apply if you furnish a performance and payment bond, a lien and completion bond, or a bond equivalent or joint control approved by the CSLB registrar, covering full performance and payment. In that case the contract doesn't need the statement above either.
If you take more
It's cause for discipline by the Contractors State License Board. It's also a misdemeanor: a fine of $100 to $5,000, up to a year in county jail, or both. Penalties are heavier for work in an area under a declared state of emergency or disaster.
Sources
California Business and Professions Code, read on leginfo.legislature.ca.gov on 18 October 2026.
- Section 7159.5: the cap, the bond exception and the penalties. Last amended by SB 601, effective 1 January 2024.
- Section 7159: what the contract must say. Last amended by SB 517, effective 1 January 2026.
- Section 7151.2: what counts as a home improvement contract.
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