Know Your Rights Before You Sign

The 10% Deposit Rule

California law caps contractor deposits at $1,000 or 10% of the contract price, whichever is less.

This applies to all home improvement contracts unless the contractor carries a full performance and payment bond.

If an unbonded contractor asks for more, they are breaking the law.

Bus. & Prof. Code §7159(d)(8)
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Your Right to Cancel

If a contractor came to your home to solicit work (you did not contact them first), you have 3 business days to cancel the contract without penalty.

If you are 65 years of age or older, that cancellation period is extended to 5 business days.

The contractor must provide a written notice of this right. If they did not, the contract may be voidable. This applies even if work has already started.

Civil Code §1689.5–1689.14
AB 2471 (seniors 65+)

New Contract Protections (2026)

As of January 1, 2026, California home improvement contracts must include new protections:

• You can now cancel a contract by email, not just by mail or fax
• The contract must include the contractor’s email address for cancellation notices
• The contract must include a phone number you can call for help filling out the cancellation form
• The contract must disclose whether subcontractors will be used

If these disclosures are missing, you can file a complaint with the CSLB.

AB 1327 (Bus. & Prof. Code §7159)

The Written Contract Requirement

Any home improvement project over $500 requires a written contract. A handshake deal does not count.

The contract must include:

• Contractor name, address, and CSLB license number
• Project start date and completion date
• Total price and payment schedule
• Description of work to be performed
• Cancellation notice

A text message is not a contract either.

Bus. & Prof. Code §7159(a)

What To Do If Something Goes Wrong

You have options. Here is where to start.

• File a complaint with the CSLB1-800-321-CSLB (2752) or www.cslb.ca.gov
• Sacramento County DA Consumer Protection(916) 874-6218 or www.sacda.org
• Small Claims CourtFor amounts under $12,500, Sacramento County Small Claims Court
• Non-English negotiationsIf a contractor negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, California law may require a translated contract for certain agreement types. Note: home improvement contracts under Bus. & Prof. Code §7159 are excluded from Civil Code §1632, but you can still request a written translation before signing. Civil Code §1632