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A contractor deposit should hold the job and cover early materials. It's not a blank check.

So how much should you pay before work starts? There's no single nationwide number, and plenty of roundups still tell Florida homeowners they have a 10% cap that the statute does not actually create. California's down payment rule is much stricter.

Skip to the recovery steps if the money is already gone. The cheap fix, if you still have a choice, is a smaller first payment on a credit card to a licensed company.

How much deposit can a contractor legally ask for?

Federal agencies don't set a nationwide contractor deposit cap. Your state statute, the written contract, and your payment method are what actually control the money.

California is the cleanest consumer rule. For home improvement contracts, Business and Professions Code 7159.5 limits the down payment to 10% of the contract price or $1,000, whichever is less. That $1,000 ceiling bites on big jobs. On a $40,000 roof, 10% would be $4,000, but the lawful down payment is still $1,000.

Florida does not work that way. New York does not print a simple 10% or 33% ceiling in its consumer guidance either.

State What the law actually does
California Home improvement down payment: 10% of the contract price or $1,000, whichever is less
Florida No deposit ceiling. After a first payment over 10%, Florida Statute 489.126 generally requires the contractor to start work within 90 days
New York Jobs over $500 need a written contract. New York Attorney General home improvement guidance says progress payments must reasonably match the work, materials, or project costs

Plenty of states have no percentage cap at all. An oversized deposit can still be a warning even when it isn't, by itself, illegal.

Read your own state's licensing board page. A neighbor's rule does not apply to your job.

Florida's 10 percent figure is a trigger, not a cap

Turns out the "Florida caps deposits at 10%" line mixes up two different ideas.

Section 489.126 starts to matter once the contractor has already taken more than 10% of the contract price. After that, the contractor is expected to begin work within 90 days, unless the contract sets another period. Taking the money and performing no work in that window can be a crime. A 30% kitchen deposit is not automatically unlawful just because it beats 10%. Thirty percent can be lawful. Ghosting after thirty percent is the problem.

The 90-day failure looks different if you canceled, or if you broke the contract. The statute cares who caused the stall.

Signs you are funding a disappearing contractor

Pressure and payment method tell you more than a logo.

People get stuck because the bid was the lowest of three, the person sounded busy in a reassuring way, and the deposit ask arrived with this now-or-never tone that made it feel rude to pause and check a license number, which is exactly the pause that would have helped.

Just walk away from that urgency.

Watch for these:

One red flag is a maybe. Stack three and you should stop.

Can they keep a non-refundable deposit?

Thing is, that label is not magic.

If the contract says the money covers custom materials, and those materials were ordered, you may not get every dollar back just because you changed your mind. That's still a costs fight. If no permit was pulled, no materials showed up, and the texts went quiet, "non-refundable" is a thin reason to keep the whole check. Boards and small-claims judges look at whether work started.

Get any refusal in writing.

What to do if a contractor took the deposit and disappeared

Move while the paper trail is fresh.

  1. Save everything. Keep the contract, invoices, canceled checks, card statements, texts, emails, photos of any work, and a call log with dates.
  2. Send a written demand. Use certified mail or another method that proves delivery. State the amount, the date paid, what was promised, and a clear deadline such as 10 days. Cite your state's rule if you have one, including California's down-payment cap or Florida's duty to start work.
  3. File with the state licensing board. A licensed contractor has a credential to lose. An unlicensed one still belongs in the complaint file.
  4. Dispute the charge if you paid by credit card. Fair Credit Billing Act disputes are time-sensitive. Many issuers want them soon after the charge appears, often within 60 days of the statement.
  5. Report the pattern. File with your state attorney general and through FTC ReportFraud. A Better Business Bureau complaint can add public pressure. It does not replace a board filing or a court case.
  6. Consider small claims. Dollar limits vary by state and county. You usually don't need a lawyer. Bring the demand letter and proof they never performed.
  7. Talk to police if it looks like theft, not a slow unfinished job. A fight over leftover punch-list work is not the same as someone who took money and vanished.

Don't send "just a little more" to lure them back. That often makes the loss worse.

Why the payment method decides the fight

A credit card still leaves a billing-dispute path.

Debit, wires, cash, and app payments to a personal name leave you fewer tools, and some leave you none. That gap shows up much later.

The card-versus-cash choice decides whether you still have a dispute path, and to be honest that's the fork most people only notice after the contractor is gone. You see it once they're gone.

If they won't take a credit card or a check to the licensed business, treat that as data. Progress payments tied to visible work beat one fat deposit.

Check this before any money leaves

Do these before you pay:

Three bids help. The cheapest bid with the biggest deposit is not a bargain.

FAQ

How much can a contractor legally ask for up front? It depends on the state and the type of job. California home improvement down payments are limited to 10% or $1,000, whichever is less. Florida does not cap the percentage. New York wants a written home improvement contract over $500 and progress payments that reasonably match the work. In New York City and several downstate counties, those contractors also need a local license. New York also describes escrow accounts or a surety bond so advance payments are used for the job or returned.

What if they take the deposit and never show? Send a demand, complain to the licensing board, dispute a card charge if you still can, then use small claims if the amount is worth the filing fee.

Can a contractor refuse a refund? They can refuse. That refusal is stronger if the contract is clear and they actually incurred costs or started work. It's a poor shield for a no-show.

Is small claims worth it? If the amount fits your court's limit and they ignored a written demand, it's a common next step. Check the local cap first.

If the money is already gone, send the demand letter this week and run a license lookup the same day. Do both before you wait on a promised callback. If you haven't paid yet, verify the license and put a modest first payment on a credit card, in writing, at an amount your state actually allows. Don't overpay that first bill.