How much deposit can a contractor take? The state rules, statute by statute

Some states cap the deposit on home improvement work, some attach conditions instead of a cap, and the pages that answer this often disagree. Below are the states we have read the law for, each with a link to the statute and the date we read it (3 October 2026). If your state isn’t here, we haven’t checked it yet.

Last updated: 4 October 2026

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On this page

01The short answer
02The states we checked
03States not on the list
04Deposit wording to paste
05Deposit, progress, special order
06The rest of the job

The short answer

Of the eight states below, six cap the deposit. Two of them (California and Nevada) cap it at $1,000 or 10% of the contract, whichever is less, and four cap it at about one-third. Florida and New York set no cap, but Florida attaches deadlines to a large deposit and New York requires deposits to sit in escrow. These rules are written for home improvement and residential work, and several have exceptions for bonded contractors or special-order materials.

The states we checked against the statute

State	The rule	Statute
CaliforniaCap	$1,000 or 10% of the contract, whichever is less	Cal. Bus. & Prof. Code § 7159.5(a)(3), (a)(5), (a)(8)
FloridaNo cap, a trigger	Above 10%: apply for permits within 30 days and start within 90 days of the permit	Fla. Stat. § 489.126(2)(a)
MaineCap	Down payment no more than 1/3 of the contract price (contracts over $3,000)	10 M.R.S. § 1487(5)
MarylandCap	No more than 1/3 of the contract price at or before signing	Md. Code, Bus. Reg. § 8-617(b)
MassachusettsCap	1/3 of the price, or the cost of special-order materials if that is more	M.G.L. c. 142A, § 2(a)(6)
NevadaCap	$1,000 or 10%, whichever is less, unless a $100,000 consumer bond is on file	NRS 624.970(2)(g); pools and spas NRS 624.940(2)(g)
New YorkNo cap, held in escrow	No cap, but payments before substantial completion go into escrow within 5 business days	N.Y. Lien Law § 71-a(4); Gen. Bus. Law § 771
PennsylvaniaCap	Contracts over $5,000: 1/3 of the price, plus special-order materials named in the contract	73 P.S. § 517.9(9), (10) (Home Improvement Consumer Protection Act)

Each statute read on 3 October 2026.

California

Cap

$1,000 or 10% of the contract, whichever is less

For home improvement contracts: “the downpayment shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less.” After the down payment, the contractor may not ask for or accept payment “that exceeds the value of the work performed or material delivered”, and any payments before completion need a schedule in the contract, in dollars and cents.

The exception: a contractor who furnishes a performance and payment bond, a lien and completion bond, or a bond equivalent or joint control approved by the registrar is exempt from those payment limits.

Source: Cal. Bus. & Prof. Code § 7159.5(a)(3), (a)(5), (a)(8), read 3 October 2026

Florida

No cap, a trigger

Above 10%: apply for permits within 30 days and start within 90 days of the permit

Florida sets no percentage cap. A contractor who receives, as an initial payment, more than 10 percent of the contract price for work on residential real property must apply for the necessary permits within 30 days of the payment (unless the work needs no permit) and start the work within 90 days after the permits are issued. Both periods can be longer if the contractor shows just cause or the customer agreed in writing to a longer period.

Source: Fla. Stat. § 489.126(2)(a), read 3 October 2026

Maine

Cap

Down payment no more than 1/3 of the contract price (contracts over $3,000)

A home construction contract for more than $3,000 in materials or labor must be in writing, signed by both sides, and state the method of payment, “with the initial down payment being limited to no more than 1/3 of the total contract price.”

Source: 10 M.R.S. § 1487(5), read 3 October 2026

Maryland

Cap

No more than 1/3 of the contract price at or before signing

“A person may not receive a deposit of more than one-third of the home improvement contract price before or at the time of execution of the home improvement contract.”

Source: Md. Code, Bus. Reg. § 8-617(b), read 3 October 2026

Massachusetts

Cap

1/3 of the price, or the cost of special-order materials if that is more

For residential contracting agreements over $1,000, which must be in writing: a deposit required before the work starts “shall not exceed the greater of one-third of the total contract price or the actual cost of any materials or equipment of a special order or custom made nature, which must be ordered in advance of the commencement of work.”

Source: M.G.L. c. 142A, § 2(a)(6), read 3 October 2026

Nevada

Cap

$1,000 or 10%, whichever is less, unless a $100,000 consumer bond is on file

For residential improvement work on an owner-occupied single-family home, the contract must state the down payment or deposit, “not to exceed $1,000 or 10 percent of the aggregate contract price, whichever is less.” That limit does not apply if the contractor has filed a $100,000 bond with the State Contractors’ Board solely for the protection of consumers, or has been granted relief by the Board.

Residential pool and spa contracts over $1,000 carry the same $1,000-or-10% limit under NRS 624.940, and residential solar has its own section.

Source: NRS 624.970(2)(g); pools and spas NRS 624.940(2)(g), read 3 October 2026

New York

No cap, held in escrow

No cap, but payments before substantial completion go into escrow within 5 business days

New York sets no deposit cap for home improvement contracts. Instead, payments received before the work is substantially complete must be deposited within five business days in an escrow account at a bank located in New York, unless the contractor posts a bond, contract of indemnity or irrevocable letter of credit with the owner. The written contract has to tell the customer about this (General Business Law § 771).

Source: N.Y. Lien Law § 71-a(4); Gen. Bus. Law § 771, read 3 October 2026

Pennsylvania

Cap

Contracts over $5,000: 1/3 of the price, plus special-order materials named in the contract

No payment of any kind before the contract is signed. For a home improvement contract with a total price over $5,000, the deposit may not exceed one-third of the contract price, or one-third plus “the cost of special order materials that will be ordered, as designated in the written contract.”

The threshold in the current text is $5,000, not the $1,000 some summaries repeat. A home improvement retailer that posts an irrevocable letter of credit with the state’s consumer protection bureau, and meets the section’s other conditions, is exempt from the deposit limit.

Source: 73 P.S. § 517.9(9), (10) (Home Improvement Consumer Protection Act), read 3 October 2026

States not on the list

We have not checked the other states yet, and we don’t guess. Before you set deposit terms, look up your state’s contractor licensing board or the home improvement section of the state code. Search for “deposit”, “down payment” and “home improvement contract”. When we read another state’s statute, it goes on this page with its link and date.

Deposit wording you can paste into an estimate

A deposit line works best when it says four things: the amount, what it pays for, what happens if the job is cancelled, and when the rest is due. Fill in the blanks, and keep the amount inside your state’s rule above.

Deposit wording

Deposit: $____ due when you approve this estimate.

What it covers: reserving your start date of ____ and ordering ____.

If you cancel: before materials are ordered, the deposit is refunded in full within __ days. Special-order materials already ordered (listed above) are not refundable.

Balance: $____ due ____ (on completion / per the payment schedule below).

Keep it plain. No threats, no late-fee warnings in the deposit line, and nothing that contradicts your state’s rules or any cancellation right your customer has. If your state requires specific contract language, that language goes in too.

Deposit, progress payments and special-order materials

Deposit (down payment): the money taken when the contract is signed, before work starts. This is what most of the caps above limit.
Progress payments: payments as stages of work are done. California requires them to be scheduled in the contract and not to exceed the value of the work performed or material delivered.
Special-order materials: custom items that must be ordered before work starts. Massachusetts and Pennsylvania treat them separately from the one-third limit, as described above.

Where this fits with the rest of the job

The deposit is one line of the estimate: see how to write a contractor estimate for the rest of it, and the text that asks for the deposit. Getting the customer to the estimate starts with not missing their call: see how to forward only unanswered calls and what to text when you miss one. Looking for the jobs themselves? LeadHunter USA lead alerts send you local posts from people asking for your trade.

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Quotes with a deposit line, sent by text and approved on the customer’s phone, are coming in the business line LeadHunter USA is testing, along with invoices you mark as paid and a Google review request when the job is done.

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Questions

Common questions

How much deposit can a contractor ask for?

It depends on the state. Of the states we have read the statute for, California and Nevada cap it at $1,000 or 10% of the contract, whichever is less; Maine, Maryland and Pennsylvania (contracts over $5,000) cap it at one-third; Massachusetts allows one-third or the cost of special-order materials if that is more. Florida and New York set no cap but attach conditions. Check your own state before you set your terms.

What is the California contractor deposit limit?

For a home improvement contract, the down payment may not exceed $1,000 or 10% of the contract amount, whichever is less (Business and Professions Code 7159.5(a)(3)). After that, payments may not run ahead of the work performed or material delivered. Contractors who furnish a qualifying performance and payment bond or joint control approved by the registrar are exempt.

Does Florida limit contractor deposits to 10%?

No. Florida has no cap. If a contractor takes more than 10% of the contract price as the initial payment on residential work, the contractor must apply for permits within 30 days and start the work within 90 days after the permits are issued, unless there is just cause or the customer agreed in writing to longer (Florida Statutes 489.126(2)).

Can I ask for more deposit when I have to special-order materials?

In some states the law says so directly. Massachusetts allows the actual cost of special-order or custom materials that must be ordered before work starts, if that is more than one-third. Pennsylvania allows one-third plus the cost of special-order materials designated in the written contract.

My state is not on this list. What should I do?

Look up your state contractor licensing board or the home improvement section of your state code before you set deposit terms. We list only states whose statute we have read ourselves, and we will add more the same way.

Is this legal advice?

No. It is the text of each statute, summarized for contractors and linked so you can read it yourself. Rules have exceptions (bonds, retailers, types of work), so read the linked section for your state.

Sources · checked 3 October 2026