How much should a contractor deposit be in California?

California law caps the down payment on a home improvement contract at 10% of the contract price or $1,000, whichever is less (Business & Professions Code §7159). Any contractor demanding more is violating state law.

The cap applies to the initial deposit only. Progress payments after work starts must be tied to completed milestones and cannot exceed the value of work performed plus materials delivered to the site.