You’re ready to turn your fixer-upper into your dream home. You find a contractor with a decent quote, shake hands, and work gets underway. But weeks later, the scope keeps changing, the costs keep climbing, and you’re not sure where your money is going—or if the work is even legal.
Sound familiar?
In California, home improvement projects are protected by specific laws. Whether you’re remodeling a kitchen or adding an ADU, knowing your rights upfront can save you from legal trouble down the road.
Let’s break down what every homeowner should know before, during, and after hiring a contractor in California.
Written Contracts Are Required for Jobs Over $500
Under California law, any home improvement project costing more than $500 must be documented with a written contract. That’s not a suggestion—it’s a legal requirement under Business & Professions Code § 7159.
The contract must include:
- The contractor’s name, address, and license number
- A detailed scope of work and materials
- The project’s start and estimated completion dates
- A payment schedule
- Change order requirements (in writing)
- Notices about your right to cancel, lien laws, and insurance disclosures
Verbal agreements may feel faster, but they offer little protection if things go sideways. Before anyone swings a hammer, ensure the paperwork is complete and signed by both parties.
You Have the Right to Cancel
For contracts signed in your home or away from the contractor’s usual place of business, you have the legal right to cancel within three business days of signing. This is known as the “cooling-off” period. For California homeowners age 65 or older, that cancellation window extends to five business days.
The contractor must provide you with a written cancellation notice, and any deposit you paid must be returned if you cancel during this time. If they start work early and without consent, you may not be liable for payment.
Down Payments Are Capped
A common red flag is a contractor requesting a large sum of money upfront. California law limits down payments on home improvement projects to the lesser of 10% of the total cost or $1,000—whichever is less.
If you’re quoted $30,000 for a remodel, your initial payment should be no more than $1,000. Anything higher is a violation of state law.
This rule is designed to protect homeowners from financial loss if the contractor walks away or fails to begin the job.
Licensing Is Mandatory
In California, anyone performing construction work over $500 must hold an active contractor’s license issued by the Contractors State License Board (CSLB). That license must match the work being done (e.g., general building, plumbing, electrical).
If a contractor is unlicensed:
- You may not be able to recover damages in court
- They may not legally place a mechanic’s lien on your property
- You can report them, and the CSLB may pursue fines or criminal charges
Before hiring anyone, check their license status through the CSLB’s online portal. You should also verify their bond and insurance information.
Mechanic’s Liens: What You Should Know
Even if you pay your contractor in full, you can still be on the hook if they fail to pay subcontractors or suppliers. This is where mechanics liens come in.
To protect your home from a lien:
- Ask for preliminary notices from subcontractors and suppliers
- Request lien waivers as payments are made
- Don’t make the final payment until all lien releases are in hand
By law, contractors are required to include a warning about mechanics liens in the contract itself. Ignoring that language could cost you.
What Happens When Things Go Wrong?
If your contractor fails to perform, disappears mid-job, or cuts corners, they may be in breach of contract. You may be entitled to:
- Reimbursement for damages
- Cancellation of the agreement
- Enforcement of your consumer rights under the Contractors State License Law
Contractors may also be held liable for misrepresentation, abandoned work, and other unfair practices under California law.
When to Call a Lawyer
At Boyes Legal, APC, we assist homeowners in San Jose and San Francisco in resolving renovation-related disputes before they escalate out of control. If you’re dealing with:
- An unlicensed or nonresponsive contractor
- Overpayments or unfinished work
- Threats of mechanics liens
- Defective workmanship
Our team can review your contract, assert your legal rights, and help you recover what you’re owed. Sometimes, a demand letter from a lawyer is enough to get the contractor back on track. If not, we’re ready to pursue your claim through negotiation or litigation.
Final Checklist: Before You Sign That Contract
✔️ Project over $500? Put it in writing
✔️ License number verified through CSLB
✔️ Deposit ≤ 10% or $1,000
✔️ All required notices included
✔️ Payment tied to work milestones
✔️ You received your cancellation rights in writing
Protect Your Home—and Your Wallet
Home improvement projects should be exciting, not stressful. Whether you’re just starting to plan or stuck in a stalled renovation, Boyes Legal is here to help. Contact us today to schedule a consultation with a California contractor law attorney.