How much is a California contractor legally allowed to take as an up-front deposit on a home improvement job?

If you hired a contractor for home improvement work in California and paid a deposit before any work began, there's a hard statutory ceiling on how large that deposit was ever allowed to be. Under Business and Professions Code section 7159, most home improvement contracts cap the down payment at $1,000 or 10% of the total contract price, whichever amount is smaller. This cap applies regardless of what the contractor told you was "standard" or what you agreed to in writing, since it's set by statute rather than by contract terms.

If your contractor collected more than that legal ceiling, say $8,000 up front on a $40,000 remodel where the cap would have been $1,000, that overage is a distinct, standalone violation you can raise in a demand letter and in your claim, separate from any dispute about whether work was ever performed. It's worth noting this violation exists independent of whether any work happened at all, an unlicensed contractor asking for 50% upfront "because that's how it's done" has already broken the law before a single tool was picked up.