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Is your contractor asking for 30%, 40%, or 50% upfront? Enter your quote and state to instantly check if the deposit is legally capped, mathematically safe, or an unlicensed cash-flow trap.
Adjust figures below to simulate your contractor estimate.
California law strictly prohibits contractors from requesting this deposit before work begins. Under Cal. Bus. & Prof. Code § 7159.5(a)(3), paying this puts you at immediate financial risk. Demand milestone escrow or report the violation.
Instead of handing over a massive upfront check, your funds sit securely in a dedicated project escrow account backed by Stripe. Your contractor sees the funds are guaranteed, but they are only released after you inspect each phase of work.
Warn friends or post to community groups (Reddit, Nextdoor, Facebook).
Many small contracting businesses struggle with cash flow. They often use the deposit from your project to settle unpaid material bills or payroll from previous jobs. While some contractors do this innocently to purchase special-order materials, handing over 50% removes their financial urgency to complete your project on time.
Under California Business and Professions Code § 7159.5, down payments for home improvement projects are legally capped at 10% of the total contract price or $1,000, whichever is less. Requesting more is a misdemeanor offense and subjects the contractor to disciplinary action by the Contractors State License Board (CSLB).
If an upfront deposit was paid via cash, personal check, or wire, recovering it is notoriously difficult. Homeowners often have to file civil lawsuits against undercapitalized LLCs or file claims against state recovery funds (which often have long backlogs and strict damage caps). Paying in milestones through escrow keeps unearned money out of the contractor’s account in the first place.
The homeowner funds each milestone into escrow before the work on it starts, so the contractor can see the money is there. The contractor is paid that portion only after the homeowner approves the finished milestone, and disputed funds stay in escrow while the dispute is reviewed. Escrow protects the payment step; it is not an insurance policy and does not cover workmanship.