How much deposit a contractor can legally ask for

California’s $1,000 rule is famous. It is not the country.

Search “how much deposit can a contractor ask for” and you will be told, in this order, that the limit is 10 percent, that the limit is one-third, and that 50 percent is a red flag but not illegal. Those three sentences can all be true of the same kitchen, depending on which state the kitchen is in.

Source fact: California Business and Professions Code §7159.5(a)(3), retrieved 5 September 2026 from the California Legislature’s official code display, reads: “If a downpayment will be charged, the downpayment shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less.” The Contractors State License Board restates the same arithmetic in Industry Bulletin 22-14 (22 November 2022) and in its April 2026 licensee newsletter, and applies it to home improvement, residential solar, accessory dwelling units and rebuilding in declared disaster areas. A violation of paragraphs (1), (3) or (5) of subdivision (a) is a misdemeanor: a fine of $100 to $5,000, up to a year in county jail, or both. In a declared disaster the court must impose the maximum fine.

HyreRemodel analysis: the reason the California rule dominates search results is that it is short, numerical and attached to the largest contractor-licensing board in the country. It is also unusually strict. Ten percent of a $40,000 kitchen is $4,000; California takes the lesser of that and $1,000, so the cap is $1,000. A contractor who asks for the “industry standard” 10 percent on that job in Los Angeles is asking for four times the legal maximum. The same ask in Dallas is a negotiation, not a crime. Treating the California figure as a national floor, or as a national ceiling, is the most common error this page exists to stop.

The 4,820 California CSLB records in the HyreRemodel store, measured 2026-09-05, sit under that rule. The 955 Texas records in the same store sit under no statewide deposit ceiling at all — and they are municipal registrations, not a state licence. Those two facts are not comparable, and they are why a national “typical deposit” is not a finding we will publish.

Four regimes, not a yes/no map

HyreRemodel analysis, not a statutory hierarchy: residential contractor deposits in the United States are regulated under four structurally different regimes. Ranking them by how tightly the state limits money before work starts is our framing. It is not a claim about contractor quality in any state.

Regime 1 is California and Nevada: a hard dollar-or-percent ceiling that, on any kitchen above $10,000, collapses to $1,000. Regime 2 is the one-third club — Maryland, Pennsylvania, Massachusetts, Maine — which on the same $40,000 kitchen allows $13,333, and in Pennsylvania and Massachusetts can go higher if special-order materials are listed in the contract. Regime 3 is Ohio: a real 10% cap that a $20,000 bath remodel never meets, because Chapter 4722 only attaches above $25,000. Regime 4 is everyone else we verified — no percentage ceiling, and a different tool (escrow, a construction account, a start-work clock, a written-contract statute, a recovery fund) sitting underneath.

Worked example: $8,000 down on a $40,000 kitchen

HyreRemodel calculation, not a quote. Hold the job constant — a $40,000 kitchen remodel on an existing owner-occupied house, no swimming pool, no declared disaster, no cost-plus contract, no performance bond — and ask only whether an $8,000 deposit at signing is lawful under the statutes we retrieved. $8,000 is 20 percent of $40,000. It is the number a homeowner is most often told is “about right.”

California: unlawful. Ten percent of $40,000 is $4,000; the statute takes the lesser of $4,000 and $1,000; the maximum is $1,000. An $8,000 ask is eight times the legal down payment. CSLB Industry Bulletin 22-14 uses a parallel example: on any project priced at $10,000 or more, the maximum down payment allowed is $1,000. The contractor may still collect progress payments later, but only against work performed or materials delivered.

Nevada: unlawful on an owner-occupied completed single-family residence, for the same arithmetic, unless the contractor has filed the $100,000 consumer-protection bond that NRS 624.970 carves out. The Nevada State Contractors Board’s 19 September 2025 consumer alert restates the $1,000-or-10% limit in those words and tells homeowners to treat a large upfront materials payment by Zelle as a scam pattern, not a negotiation.

Ohio: unlawful if Chapter 4722 applies. A $40,000 contract exceeds the $25,000 threshold. Ten percent is $4,000. An $8,000 ask is double the cap, unless $8,000 is not more than 75 percent of a listed non-returnable special-order item, or the contract is cost-plus, or the money is a construction-loan draw. A $20,000 bath in the same house would not meet Chapter 4722 at all; the 10% cap would not attach.

Maryland: lawful. One-third of $40,000 is $13,333.33. $8,000 is under the line. The contractor still may not take any money before the written contract is signed (Bus. Reg. §8-617(a)).

Pennsylvania: lawful on a HICPA contract over $5,000, and $40,000 is over $5,000. One-third is $13,333.33. If the contractor is ordering $6,000 of custom cabinets that meet the statutory definition of special-order material, the cap becomes $13,333.33 + $6,000 = $19,333.33, provided those cabinets are listed separately in the written contract (73 P.S. §517.7(a)(9) and §517.9(10)).

Massachusetts: lawful, on the same one-third arithmetic, and the cap is the greater of one-third or the actual cost of special-order items that must be ordered in advance. Massachusetts, unlike Maryland, also forbids demanding final payment until the work is completed to the parties’ satisfaction.

Maine: lawful unless the parties have not used a written contract (required above $3,000) or have signed a written exemption from the one-third limit after the contractor informed the owner of the right. Maine’s Attorney General states the waiver condition on the consumer home-construction page; 10 M.R.S. §1489 is the exemption.

Texas, Florida, Arizona (ordinary remodel), Illinois, Washington, Utah, North Carolina, New York, New Jersey, Connecticut, Wisconsin: no statewide percentage ceiling we retrieved. An $8,000 deposit is not, by itself, a statutory violation in those states. It may still be a stupid idea, a contract you should not sign, evidence in a later fraud case, or a breach of an escrow or construction-account duty. Those are different legal facts, and they are the next section.

Progress payments are where the rest of the money actually moves

A deposit cap, where one exists, is a rule about the first cheque. Most of a remodel is paid after that, and the statutes that bother to regulate those later cheques do it by value of work, not by a second percentage.

Source fact, California: BPC §7159.5(a)(5) is the national model even where it is not the law. Except for the down payment, the contractor shall neither request nor accept payment that exceeds the value of the work performed or material delivered, including from a lender. The contract must carry a schedule in dollars and cents referencing the work or materials for each payment. CSLB’s 2022 bulletin puts the required boldface in the contract: it is against the law to collect for work not yet completed or materials not yet delivered.

Source fact, Nevada: NRS 624.970 (residential improvement) and NRS 624.875 (residential photovoltaic) use the same structure. The schedule must show each progress payment as a sum in dollars and cents. The contractor may not receive payments in excess of 100 percent of the value of the work performed, excluding finance charges, except for the initial down payment. A payment-and-performance bond covering full completion is the exception, as in California.

Source fact, New York: the Attorney General’s Home Improvement Fact Sheet, retrieved on this date, restates GBL Article 36-A: any schedule of progress agreed in the contract must bear a “reasonable relationship” to the work done, materials purchased or other project-related costs. That is a relationship test, not a percentage cap. Combined with the escrow rule, it means the contractor can collect a large deposit — and must then hold it in a New York bank account until the schedule, substantial completion, or a customer breach that covers reasonable costs, lets them draw.

Source fact, Massachusetts: c.142A §2 forbids demanding final payment until the contract is completed to the satisfaction of the parties. New Jersey’s home-improvement practices regulation makes it unlawful to request the buyer to sign a certificate of completion, or make final payment, before the home improvement is completed in accordance with the contract. Wisconsin ATCP 110.02 says the same in trade-practices language. Florida §489.126(3) says a contractor who has been paid more than the value of work performed may not fail or refuse to perform for any 90-day period.

HyreRemodel analysis: in a no-cap state the progress-payment clause is the consumer-protection statute you actually have. A Texas contract that says “50% at signing, 40% at rough-in, 10% at completion” is lawful as a deposit matter and may still be a contract you should not sign, because 90 percent of the job can be paid before a final inspection. The useful next step is to rewrite the schedule against permits and inspections — demolition, rough mechanical, insulation/drywall, trim, final — and to hold a retainage through the building department’s final. Utah Code 13-8-5 caps retainage at 5% of the payment and of the total construction price; that is a retainage ceiling, which is the opposite of a deposit cap, and it is the only Utah payment-timing number we retrieved.

What happens if they take more than the statute allows

A deposit over the cap is not a single legal event. It is, depending on the state, a licensing offence, a misdemeanor, an unfair-trade-practices count, a contract that is unenforceable against you, a fact you will need in small claims, or all of those at once. It is almost never a situation in which a board writes you a cheque the same week.

California. Paying $8,000 on a $40,000 kitchen is cause for CSLB discipline and, for a violation of §7159.5(a)(3), a misdemeanor. File a complaint with CSLB. The homeowner’s path to money is still a civil claim, a small-claims filing if the amount fits, and, if the contractor is licensed and other conditions are met, a later claim against the Recovery Account — a path this page does not quantify because we did not retrieve the current Recovery Account dollar limits this session. In a declared disaster the criminal fine is the statutory maximum. Do not treat a CSLB complaint as a refund mechanism; treat it as the public-record and licence-discipline step.

Nevada. The same $8,000 on an owner-occupied residential improvement is a contract that does not comply with NRS 624.970 unless the $100,000 consumer-protection bond is on file. NSCB takes the complaint; the Board’s 2025 consumer alert is written for exactly the pattern of a large upfront materials payment followed by silence. The Residential Recovery Fund is a separate, licensed-contractor path.

Maryland, Pennsylvania, Massachusetts, Maine, Ohio. The over-cap deposit is a prohibited act (Pennsylvania), a ground for MHIC penalty (Maryland, up to $5,000 per violation), a c.142A / c.93A problem (Massachusetts), a Chapter 219-A problem (Maine), or a Chapter 4722 unfair or deceptive act with a private right of action (Ohio). In each of those states the attorney general or the licensing programme is the public-record step; small claims or a private lawyer is the collection step. Pennsylvania’s AG has already used “more than one-third” as a pleading fact in 2025.

New York. There is no cap to exceed. The violation, if any, is failing to escrow or bond the money within five and ten business days, or drawing it off-schedule. Civil fines for the payment-protection provisions run $250 to $2,500; the AG can seek restitution; a private plaintiff can add $500 and attorneys’ fees for fraudulent written statements. Ask, in writing, for the bank and the account number. If the contractor will not name a New York bank, that is the finding.

Florida. There is no cap to exceed. The violation is failing to pull permits within 30 days or start within 90 days after an initial payment of more than 10 percent, or taking more than the value of work and then disappearing for 90 days. Section 713.345 (misapplication of construction funds) is a felony scaled to the amount, and a chapter 489 licensee convicted of it faces a mandatory one-year licence suspension under §489.129(1)(r). The Homeowners’ Construction Recovery Fund is post-judgment against a licensed contractor, with its own conditions.

Texas. There is no cap to exceed. The AG’s consumer page tells you not to pay in full, to use a partial-payment schedule tied to completed work, and, on homestead jobs over $5,000, to demand written verification of the construction account. A complaint to the AG is a public record; the AG cannot represent you and says so. A DTPA claim, including treble damages for knowing deception, is a private-lawyer case. TDLR is the right agency if the person who took the money was doing electrical, air-conditioning or mould work; it is the wrong agency for a general remodeler, because Texas does not license that occupation. See states without contractor licensing.

HyreRemodel recommendation, not a source fact: work this in order. Stop further payments. Confirm whether a cap, an escrow duty or a construction-account duty actually applies in your state. File with the licensing board or the attorney general so there is a public record. Then small claims or counsel, depending on the amount. A recovery fund, where one exists, is almost always last — it wants a judgment, a licensed contractor, and a waiting period.

Cities and counties can be stricter than the state — and sometimes are the only rule

New York State has no percentage cap. New York City, and Nassau, Suffolk, Westchester, Putnam and Rockland counties, license home-improvement contractors locally. The New York Attorney General’s fact sheet says so in one sentence, and then sends you to Article 36-A and Lien Law §71-a(4) for the statewide escrow rule that still applies underneath the local licence. A five-borough kitchen and an unincorporated-upstate kitchen share the escrow duty and do not share the licensing office.

Texas has no state general-contractor licence and no state deposit cap. San Antonio and El Paso still register contractors before they will issue a permit, with insurance floors that are city rules, not TDLR rules. Those municipal registrations — 955 of them in our store, all from those two cities — do not travel, and they do not impose a statewide deposit ceiling we retrieved. A Houston kitchen and a San Antonio kitchen are different permit facts; they are the same deposit-statute fact, which is that there isn’t one. The substitute stack is the written contract, the construction account on homestead work over $5,000, the DTPA, and not paying in full. See states without contractor licensing.

HyreRemodel analysis: the municipal overlay is why a state-level “N” in the no-cap table is the beginning of the local question, not the end of it. We did not retrieve a city deposit ordinance in this session and we will not invent one. The building department that will issue the permit is the office that can tell you whether a local rule exists. Ask them, in writing, before you pay the first instalment.

What our seven-state store actually sits under

The HyreRemodel contractor store, measured 2026-09-05, holds 23,756 companies and 22,183 licence records across seven states. An asset resting on that store is titled to those states. The deposit question is a statute question, not a store question; the store is useful only as a picture of which regime the licensed population we actually hold is living under.

California (4,820 CSLB records) and Nevada (3,494 NSCB records) are Regime 1: a $1,000-or-10% ceiling on the home-improvement or residential-improvement deposit. Arizona (4,932 ROC records) is Regime 4 for an ordinary remodel and Regime-1-adjacent only for pools and storm repair. Florida (7,130 DBPR / CILB records) is Regime 4 with a 10% start-work clock. Texas (955 municipal records) is Regime 4 with no state GC licence. Utah (703 DOPL records) is Regime 4 with a 5% retainage cap that is not a deposit cap. North Carolina (149 NCLBGC records) is Regime 4, and most of a typical remodel never meets the $40,000 licence trigger.

HyreRemodel analysis: a low North Carolina count in our store is consistent with a high licensing threshold, not evidence that North Carolina contractors do not take deposits. A Texas municipal registration is not evidence that Texas has a deposit cap. We will not compute a “typical deposit” from licence records. The records tell you who is licensed. The statute tells you what they may take.

Licence records in the HyreRemodel store by issuing authority, measured 2026-09-05, annotated with the deposit regime we verified. The bar is a research-effort picture, not a market size, and not a typical-deposit statistic.

Disciplinary_actions in this snapshot is populated only for Utah. An empty disciplinary field in another state is missing retrieval, not a clean record, and is not a finding about deposits.

States we have not verified — and will not guess

Secondary round-ups commonly add Alaska, Alabama, Arkansas, Colorado, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Virginia, West Virginia and Wyoming to a “no cap” list, and they occasionally move Tennessee, South Dakota or Rhode Island into a one-third column. Those pages disagree with each other. We did not retrieve a primary source that lets us put those states in either table this session.

What we attempted, so the gap is specific: Alaska’s construction-contractor statutes (AS 08.18) were retrieved on the licensing and bonding side (bond amounts, insurance floors) and did not, in the pages we opened, state a deposit ceiling. Oregon’s ORS 701 was not retrieved. Virginia’s Board for Contractors consumer pages were not retrieved. Michigan’s residential-builders statute was not retrieved. Tennessee and South Dakota appear as one-third states in some secondary tables; we will not copy that without the session law. Hawaii’s §444-25 (Payment for goods and services) was blocked to this environment; we recorded only §444-25.5, which is a disclosure-and-written-contract section, not a cap.

HyreRemodel analysis: an honest nineteen-row pair of tables plus a named gap is more useful than a fifty-row table whose last thirty rows were copied from one another. States will be added as each is retrieved and dated. Until then they are unverified, which is not the same as uncapped.

Method

Research question: which US states set a numerical ceiling on the initial deposit a contractor may take on a residential remodeling or home-improvement contract, what that ceiling is, what the contract must say about later payments, what the penalty is, and what substitute rule (escrow, construction account, start-work clock, written-contract statute, recovery fund) exists in states that have no ceiling.

For each candidate state we identified the statute that would cap a home-improvement deposit if anyone did, retrieved that statute from the legislature’s official display or from the licensing board or attorney general restating it on their own site, and recorded the text together with the retrieval date. A state was recorded as having a cap only where that text sets a dollar figure, a percentage, or both. A state was recorded as having no cap only where we retrieved the home-improvement or contractor-contract statute (or the regulator’s consumer page describing payment rules) and it does not contain a numerical ceiling. We do not infer a cap from a blog, and we do not infer the absence of a cap from a failed search.

Worked examples hold the job constant ($40,000 kitchen; $8,000 deposit; no pool; no disaster; no cost-plus; no performance bond) and apply the retrieved rule. Those figures are HyreRemodel calculations from the statute, not measured job costs and not a quote.

Requirements were recorded in three states, not two: verified at the primary source, verified not present at the primary source, and not verified. An unchecked cell is never rendered as a “no.” Arizona’s pool and storm-repair caps are recorded as exceptions, not as a general remodel cap. Connecticut’s and New Jersey’s one-third figures are recorded as agency recommendations, not as statutes, because the contract statutes we retrieved do not contain them.

Store-derived counts come from the HyreRemodel contractor verification store, measured 2026-09-05 from files on disk. Texas records are stored against municipal authorities and are labelled as such. Disciplinary fields are populated only for Utah in this snapshot. Store counts are not used to compute a typical deposit.

No claim on this page is taken from a contractor-directory round-up. During research, published “deposit limit by state” tables disagreed on New Jersey, Connecticut, New York, Arizona, Florida, Texas, Ohio’s dollar threshold, Pennsylvania’s $1,000-versus-$5,000 trigger, and whether Nevada’s cap survives a $100,000 bond. Those disagreements are the reason the method refuses to paper over a missing statute.