Guide · California home improvement
Progress payments: the two-minute check
Everyone asks about the deposit. Few people read the payment schedule, and that is where jobs go wrong: a lawful deposit followed by oversized "progress" payments leaves your money far ahead of the work.
Rule 1: the schedule must be specific
If a home improvement contract has payments before the work is complete, it must include a "Schedule of Progress Payments." Each payment must be stated in dollars and cents and say what work, services, materials and equipment it covers (BPC 7159(d)(9), 7159.5(a)(4)). The contract must also carry this statement in bold type:
"The schedule of progress payments must specifically describe each phase of work, including the type and amount of work or services scheduled to be supplied in each phase, along with the amount of each proposed progress payment. IT IS AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET DELIVERED. HOWEVER, A CONTRACTOR MAY REQUIRE A DOWNPAYMENT."
A schedule that says "50% at start, 40% midway, 10% at the end" falls short twice: percentages instead of dollars, and no described phases.
Rule 2: payments may never exceed the value delivered
Apart from the down payment ($1,000 or 10% of the price, whichever is less), a contractor "shall neither request nor accept payment that exceeds the value of the work performed or material delivered" (BPC 7159.5(a)(5)). Breaking that rule is a misdemeanor, with a fine of up to $5,000, up to a year in county jail, or both (7159.5(b)(1)).
Note "material delivered." Cabinets sitting in your garage are value a payment can cover. "Half up front for materials" that have not been ordered, let alone delivered, is the opposite.
The check
Read the schedule one line at a time and ask after each payment: if the contractor disappeared the morning after this payment cleared, would I have paid only for what is now at my house?
A $40,000 kitchen, in the shape that fails:
- $4,000 "deposit" (the limit is $1,000)
- $16,000 when demolition starts (demolition is not $16,000 of value)
- $16,000 when cabinet installation starts (ahead again)
- $4,000 at completion
The same kitchen, in a shape that passes:
- $1,000 down payment
- $6,500 when demolition and rough plumbing and electrical are complete
- $12,000 when the cabinets are delivered to the house
- $11,500 when cabinets and counters are installed and the appliances are in
- $9,000 at the end: punch list done, permits signed off, lien releases in hand
Every line is a described phase, in dollars, paid after the value exists.
Two things that change the picture
- The bond exception. A contractor who furnishes a performance and payment bond, or another bond or joint control approved by CSLB, covering the whole job is exempt from the down payment limit and from these payment rules (7159.5(a)(8)). It is rare; a blanket bond shows on the contractor's CSLB record.
- Lien releases before the next payment. After any payment you may ask the contractor for unconditional lien releases for the work you paid for, and withhold all further payments until they arrive (7159.5(a)(6)). Build it into the rhythm: payment clears, release arrives, next phase starts. See mechanics liens.
Keep a real final payment, large enough that finishing the punch list is worth the contractor's trip back.
Check your payment schedule, free
Paste the quote or contract. We read each payment in the schedule and point out any that come before the work they pay for, a down payment above the limit, and a schedule that does not add up to the price, along with the contractor's live CSLB record. No account is needed. Already signed and paying? Project Guard ($39 once for one project, 90 days, no renewal, refundable any time in those 90 days) checks each payment before you make it.
General information about California law, not legal advice. Checked against the official text on November 3, 2026. Sources: BPC 7159, BPC 7159.5, CSLB home improvement contracts guide.