A contractor took your deposit. Now what?
You hired a contractor for a kitchen remodel, a roof, or a fence, and paid a deposit so they could get started. Weeks later, no work has begun, the contractor has stopped answering, or the job was abandoned halfway.
You may have more options than you think, especially if you act quickly and keep good records. This explainer covers the rules that can limit contractor deposits, how to ask for your money back, and where to turn if the contractor will not respond. It is general information, not legal advice.
KEY TAKEAWAYS
- Some states limit how much a contractor can take up front. In California, a home improvement down payment generally cannot exceed $1,000 or 10% of the contract price, whichever is less.
- Florida requires contractors who take more than 10% up front to apply for permits within 30 days and start work within 90 days after permits issue, unless there is just cause or you agreed otherwise.
- If you signed at home, the FTC’s Cooling-Off Rule may give you three business days to cancel for a full refund.
- A written demand, a card dispute, a licensing complaint, and small claims court are the usual paths to getting money back.
First, check your contract
Your written agreement is the starting point. Look for:
- The start date and completion date, or a schedule of milestones
- The deposit amount and what it was for, such as materials or permits
- The payment schedule and what work each payment covers
- Cancellation and refund terms, including any notice you must give
- The contractor’s license number, business name, and address
If there is no written contract, gather everything that shows what was agreed: texts, emails, estimates, invoices, and payment records.
Rules that can limit contractor deposits
Some states limit how much a contractor can collect up front, or require work to start within a set time. A federal rule also lets you cancel certain sales made at your home.
| Rule | What it says | Who it covers |
|---|---|---|
| California down payment limit | Down payment cannot exceed $1,000 or 10% of the contract price, whichever is less. Later payments cannot exceed the value of work done or materials delivered. | Home improvement contracts in California, unless the contractor provides certain bonds or joint control |
| Florida deposit rules | With more than 10% paid up front, the contractor must apply for permits within 30 days and start work within 90 days after permits issue, unless there is just cause or a written agreement for longer. | Residential work in Florida |
| FTC Cooling-Off Rule | Three business days to cancel, with a refund due within 10 business days after the seller receives your cancellation | Sales made at your home of $25 or more, or at other temporary locations of $130 or more |
Summary as of October 2026. Many other states have their own contractor and home improvement rules. Check your state licensing board or attorney general.
- California: for home improvement work, the down payment generally cannot exceed $1,000 or 10% of the contract price, whichever is less, and later payments cannot exceed the value of the work performed or materials delivered. A contractor who took more may have violated state law.
- Florida: for residential work, a contractor who receives more than 10% of the contract price up front must apply for permits within 30 days and start work within 90 days after the permits are issued, unless there is just cause or you agreed in writing to a longer period. If the contractor does not, you can send a written demand by certified mail, return receipt requested. Misusing the money can be a crime, with penalties that increase with the amount.
- FTC Cooling-Off Rule: if you agreed to the job at your home, or at another location that is not the contractor’s place of business, you may have three business days to cancel. The thresholds are $25 or more for sales at your home and $130 or more elsewhere. The contractor must give you a cancellation notice and refund your payment within 10 business days after receiving your cancellation.
Steps to get your deposit back
- Document the situation. Gather the contract, receipts, bank or card records, and all messages. Photograph the job site if any work was started or materials were delivered.
- Check the contractor’s license. Look up the contractor on your state licensing board’s website. Note the license status and any bond information.
- Send a written demand. Ask the contractor to start the work by a specific date or refund the deposit. List the amount paid, the date, and the contract terms. Send it in a way that gives you proof of delivery. In Florida, use certified mail, return receipt requested.
- Dispute card payments. If you paid by credit card and the work was not provided as agreed, you may be able to dispute the charge with your card issuer. Our explainer on getting refunds when a business does not deliver covers the 60-day dispute window.
- File complaints. Contact your state contractor licensing board and your state attorney general or consumer protection office. Licensing boards can investigate, and some states have recovery funds or require contractor bonds that may help pay consumers.
- Consider small claims court. For many deposits, small claims court is a practical way to recover money without a lawyer. Bring your contract, payment records, written demand, and messages.
- Report possible fraud. If the contractor took money with no intention of doing the work, contact local police. You can also report it to the FTC at ReportFraud.ftc.gov.
How to protect yourself next time
- Verify the contractor’s license, insurance, and bond before signing.
- Get a detailed written contract with start and completion dates and a payment schedule tied to completed work.
- Keep the deposit small, and check whether your state caps it.
- Pay by credit card or check rather than cash, and get receipts for every payment.
- Do not pay ahead of the work. Payments should follow progress.
Frequently asked questions
How much can a contractor ask for as a deposit?
It depends on the state. In California, a home improvement down payment generally cannot exceed $1,000 or 10% of the contract price, whichever is less. Many states have no fixed limit, but a smaller deposit tied to a clear schedule lowers your risk.
What if the contractor never started the work?
Send a written demand to start by a set date or refund the deposit. In Florida, a contractor who took more than 10% up front must apply for permits within 30 days and start work within 90 days after permits issue, unless there is just cause or you agreed otherwise.
Can I cancel a contract I signed at home?
Often, yes. The FTC’s Cooling-Off Rule generally gives you three business days to cancel sales of $25 or more made at your home, with a refund due within 10 business days after the seller receives your cancellation. Some states add their own cancellation rights.
Is it a crime if a contractor keeps my deposit?
It can be. Florida, for example, makes it a crime for a contractor to misuse deposit money and fail to perform, with penalties that increase with the amount. Not every dispute is criminal, though. Many are contract disputes handled through complaints or small claims court.
Where do I complain about a contractor?
Start with your state contractor licensing board, then your state attorney general or consumer protection office. Local building departments can also tell you whether permits were ever pulled for your job.
Sources
- California Business and Professions Code § 7159.5 (home improvement payments)
- Florida Statutes § 489.126 (moneys received by contractors)
- 16 C.F.R. § 429.0, FTC Cooling-Off Rule definitions
- 16 C.F.R. § 429.1, FTC Cooling-Off Rule requirements
More coverage is in our Consumer Rights section. This article is general information, not legal advice. See our Legal Disclaimer. Spot an error? Read our Corrections Policy.
