Contractor deposit limits by state
Eight states cap the deposit a contractor can take on residential work. California and Nevada allow $1,000 or 10 percent, whichever is less; Maryland, Maine, Massachusetts and Pennsylvania allow one third, with exceptions; Vermont allows half the labor or materials cost; and Ohio allows 10 percent on jobs over $25,000. Twelve more states and DC tie a rule to the deposit instead of a cap, like Florida's permit deadline once you take more than 10 percent. The other 30 set no statewide cap we could find.
8 states cap the deposit. 13 set a rule tied to the deposit, not a cap. 30 set no statewide cap we could find.
Deposit limits by state
Residential and home improvement work. Every row was checked on October 15, 2026 against the source linked in it. Each state name opens that state's license guide.
| State | Statewide cap | What it covers | Source |
|---|---|---|---|
| Alabama | No statewide cap | Alabama sets no deposit limit. Home Builders Licensure Board rules require a written contract signed by both sides that shows the builder's license number. | Ala. Admin. Code r. 465-X-1-.01 |
| Alaska | No statewide cap | Alaska's contractor law has no home improvement contract section and no deposit limit. Contracts must show the contractor's name, address and registration number. | AS 08.18.051 |
| Arizona | No general cap. Pools and spas: 15%. Storm insurance repairs: 50% | Only two kinds of residential work are capped: an in-ground pool or spa for a buyer who lives in the home (15% of the original price at signing), and repair of damage from a catastrophic storm paid through insurance (50% of the contract). Other residential work has no deposit limit. | Ariz. Rev. Stat. 32-1158.01 and 32-1158.02 |
| Arkansas | No statewide cap | Arkansas licenses home improvement and residential building contractors and registers residential roofers, but neither law sets a deposit limit or required contract terms. | Ark. Code Ann. 17-25-501 |
| California | $1,000 or 10% of the contract price, whichever is less | Every home improvement contract with a licensed contractor, at any dollar amount, including pools, spas, solar and landscaping. A contractor who furnishes an approved performance and payment bond or joint control is exempt. | Cal. Bus. and Prof. Code 7159.5(a)(3) |
| Colorado | No general cap. Roofing: payments held in trust until materials arrive | Colorado has no state general contractor license and no general deposit limit. On residential roofing, the contract must say in bold that the roofer holds any payment in trust until materials are delivered or most of the work is done, and the owner can rescind within 72 hours for a full refund of the deposit. | C.R.S. 6-22-103 |
| Connecticut | No statewide cap | Connecticut sets no deposit limit. A home improvement contract is only enforceable if it is in writing, signed, and includes start and completion dates and the cancellation notice. | Conn. Gen. Stat. 20-429 |
| Delaware | No statewide cap | Delaware sets no deposit limit. The Attorney General's home improvement rules (in effect since November 1, 2023) require a written contract with the price, and money a contractor receives on a building contract is held in trust to pay for labor and materials. | 6 Del. Admin. Code 106-3.0 |
| District of Columbia | No cap. No payment before a written contract | Home improvement contracts in the District. No payment may be taken until the deal is in a written contract, and only a licensed home improvement contractor may take money before the work is finished. | 16 DCMR 800.1 and 808.1 |
| Florida | No cap. Over 10% starts permit and start-work deadlines | Any contractor who takes more than 10% of the price up front on residential repair, improvement or construction must apply for permits within 30 days and start work within 90 days after the permits issue, unless there is just cause or the owner agreed in writing to a longer period. | Fla. Stat. 489.126(2)(a) |
| Georgia | No statewide cap | Georgia sets no deposit limit and has no home improvement contract law. A contract for work that needs a residential or general contractor license cannot be enforced by a contractor who did not hold one. | O.C.G.A. 43-41-16 |
| Hawaii | No statewide cap | Licensed contractors doing home construction or improvement must give the homeowner a written contract, signed before any work starts, that states the exact amount due. It sets no deposit limit. | Haw. Rev. Stat. 444-25.5 |
| Idaho | No statewide cap | Idaho sets no deposit limit. Before a residential contract over $2,000, a general contractor must give the homeowner a signed disclosure of their rights, including the right to require a surety bond. | Idaho Code 45-525 |
| Illinois | No statewide cap | Illinois sets no deposit limit. Home repair and remodeling work over $1,000 needs a written contract with the total cost before work starts, and the customer must get the state's consumer rights pamphlet. | 815 ILCS 513/15 |
| Indiana | No cap. The contractor signs before any down payment | Indiana sets no deposit limit on home improvement contracts, but the contractor must sign the contract, agreeing to all of its terms, before the homeowner signs and before any down payment can be required. | IC 24-5-11-11 |
| Iowa | No statewide cap | Iowa has no home improvement contract law and no deposit limit. Contractors register with the state, and storm and fire repair contractors must have the customer sign a notice of contract rights. | Iowa Code 103A.71 |
| Kansas | No statewide cap | Kansas has no state general contractor license or deposit limit. A roofing contractor may not abandon a job without legal grounds after a deposit has been paid. | K.S.A. 50-6,133 |
| Kentucky | No cap. Insurance-paid jobs: no advance payment during the cancel window | Kentucky has no general deposit limit. On work to be paid from a property insurance claim, the contractor may not require any advance payment until the owner's cancellation period has run: 5 business days after the insurer says all or part of the claim is not covered. | KRS 367.626(2)(a) |
| Louisiana | No statewide cap | Louisiana sets no deposit limit. A contract for licensed work must state the price and be signed by all parties, and no work may begin before it is. | La. R.S. 37:2159 |
| Maine | One third of the contract price | Home construction contracts over $3,000 to build, remodel or repair a home of 3 or fewer units, electrical, plumbing and heating work included. Both sides can opt out in writing if the contractor first explains the homeowner's rights. | 10 M.R.S. 1487(5) |
| Maryland | One third of the contract price | Home improvement contracts under the Maryland Home Improvement Law. The limit is on the deposit taken before or at signing, and no payment of any kind may be taken before the contract is signed. | Md. Code, Bus. Reg. 8-617 |
| Massachusetts | One third of the price, or the cost of special order materials if greater | Residential contracting over $1,000 on an existing owner-occupied home of 1 to 4 units: remodels, repairs, additions and demolition. Building a new home is not covered. | M.G.L. c. 142A, s. 2(a)(6) |
| Michigan | No statewide cap | Michigan sets no deposit limit. Licensed residential builders must put every agreement and change in writing, and diverting money received for one project to another use is a ground for discipline. | MCL 339.2411 |
| Minnesota | No statewide cap | Minnesota sets no deposit limit. Every agreement between a licensed residential contractor and a customer must be in writing, signed and dated, and state the price or how it is figured. | Minn. Stat. 326B.809 |
| Mississippi | No statewide cap | Mississippi sets no deposit limit. Licensed residential builders and remodelers must tell the buyer in writing, at signing, whether they carry liability insurance. | Miss. Code Ann. 73-59-9 |
| Missouri | No statewide cap | Missouri has no state general contractor license, no home improvement contract law and no deposit limit. On work paid from a property insurance claim, the owner can cancel within 5 business days of a coverage denial, and the contractor must return deposits within 10 days. | RSMo 407.725 |
| Montana | No statewide cap | Montana's contractor law has no home improvement contract section and no deposit limit. Contractors moved from registration to licensing on January 1, 2026, and misappropriating a client's funds is unprofessional conduct. | MCA 37-45-301 |
| Nebraska | No statewide cap | Nebraska's contractor registration law has no contract rules and no deposit limit. On jobs paid from insurance, the owner can cancel and the contractor must return deposits within 10 days. | Neb. Rev. Stat. 44-8603 |
| Nevada | $1,000 or 10% of the contract price, whichever is less | Contracts with a residential contractor for work on an owner-occupied single-family home, signed on or after October 1, 2023. Pool, spa and residential solar contracts carry the same cap in their own sections. It does not apply to a contractor who has filed a $100,000 consumer protection bond with the Board. | NRS 624.970(2)(g) |
| New Hampshire | No statewide cap | New Hampshire has no home improvement contract law and no deposit limit. A buyer in a home solicitation sale of $150 or more can cancel until midnight of the third business day. | RSA 361-B |
| New Jersey | No statewide cap | New Jersey sets no deposit limit. Home improvement contracts over $500 must be in writing and signed, and the homeowner can cancel for any reason within 3 business days and get the money back within 30 days. | N.J.A.C. 13:45A-16.2 |
| New Mexico | No statewide cap | New Mexico sets no deposit limit. Abandoning a contract, or converting money paid for a contract, as found by a court, is a ground for license discipline. | 14.5.8.8 NMAC |
| New York | No cap. Deposits go into escrow within 5 business days | Home improvement contracts over $500. Payments received before the work is substantially complete must go into an escrow account at a New York bank within 5 business days, unless the contractor gives the owner a bond, indemnity contract or letter of credit instead. | N.Y. Gen. Bus. Law 771(1)(e) and Lien Law 71-a(4) |
| North Carolina | No statewide cap | North Carolina has no home improvement contract law and no deposit limit. A general contractor license is required at $40,000 or more. | N.C. Gen. Stat. 87-1 |
| North Dakota | No statewide cap | North Dakota sets no deposit limit, but willfully abandoning a job after taking payment is construction fraud. Abandonment arises if work does not start within 60 days of the agreed start date, or 90 days from the contract date if none was set. | NDCC 43-07-02 |
| Ohio | 10% of the contract price (75% of a non-returnable special order item) | Home construction service contracts over $25,000 on a one to three family home, with a supplier who carries at least $250,000 of liability insurance. Since September 20, 2024 that includes remodels and repairs, not only new homes. Cost-plus contracts and construction loan draws are outside the cap. | Ohio Rev. Code 4722.04 |
| Oklahoma | No statewide cap | Oklahoma has no state general contractor license or deposit limit. Registered roofers must use a written contract with the cancellation terms the roofing act requires, and abandoning a roofing job after taking a deposit is ground for a complaint. | 59 O.S. 1151.7 |
| Oregon | No cap. Over 50% puts your license at risk if you do not perform | Oregon sets no deposit limit, but if a contractor takes more than 50% of the price on a home improvement and then fails to do the work, or fails to refund within 10 days of a reasonable demand, the CCB can put the contractor on probation. | ORS 701.312 |
| Pennsylvania | One third of the price, plus special order materials | Home improvement contracts over $5,000 on a private residence. The limit is one third of the price, or one third plus the cost of special order materials named in the contract. New home construction is not covered, and home improvement retailers that post a letter of credit are exempt. | 73 P.S. 517.9(10) |
| Rhode Island | No statewide cap | Rhode Island sets no deposit limit. Work over $1,000 needs a written contract with the board's consumer disclosures and a mechanic's lien notice. | R.I. Gen. Laws 5-65-3 |
| South Carolina | No general cap. Insurance roofing: no payment until the cancel window ends | South Carolina has no deposit limit, except on residential roofing paid from an insurance claim: the contractor may not require any payment until the homeowner's cancellation period has run (5 business days after the insurer says all or part of the claim is not covered), apart from emergency work the homeowner approved in writing. | S.C. Code 40-59-25(C) |
| South Dakota | No statewide cap | South Dakota has no state general contractor license or deposit limit. On storm damage roofing, the owner can cancel within 72 hours, and the contractor must return payments for work not done within 10 days. | SDCL 37-24-51 |
| Tennessee | No statewide cap. One third in the 9 home improvement counties | Tennessee's home improvement law caps the deposit at one third of the price on residential jobs over $3,000, but it applies only in the counties that adopted it: Bradley, Davidson, Hamilton, Haywood, Knox, Marion, Robertson, Rutherford and Shelby. The cap does not apply if the contractor furnishes a qualifying bond, or if, after written notice of the right to withhold payment until completion, the owner chooses to pay early or agrees to a payment schedule. | Tenn. Code Ann. 62-6-510(12) |
| Texas | No cap. Homestead jobs over $5,000: deposits go in a construction account | Texas sets no deposit limit. On a written contract over $5,000 to improve a residential homestead, the contractor must keep the owner's payments in a bank account the statements call a construction account, and construction payments are trust funds for the subs and suppliers. | Tex. Prop. Code 162.006 |
| Utah | No statewide cap | Utah sets no deposit limit. The written contract with the owner must explain what the owner has to do to be protected from liens under the Residence Lien Recovery Fund Act. | Utah Code 38-11-108 |
| Vermont | Half the labor cost or half the materials price, whichever is greater | Contracts with a maximum price by contractors registered under 26 V.S.A. chapter 106, which covers residential jobs over $10,000. On time and materials with no maximum price, the deposit is whatever you negotiate. Licensed electricians and plumbers are outside the chapter. | 26 V.S.A. 5509(c) |
| Virginia | No cap. Contract signed first, with the down payment stated | Licensed contractors on residential work. The written contract must be signed before work starts or any payment is taken, and it must state the down payment and the progress payment schedule. | 18VAC50-22-260(B)(9) |
| Washington | No statewide cap | Washington sets no deposit limit. On residential jobs of $1,000 or more (four units or fewer), the contractor must give the customer a signed disclosure notice before starting work. | RCW 18.27.114 |
| West Virginia | No statewide cap | West Virginia sets no deposit limit. Licensed work of $10,000 or more needs a written contract with the cost and payment schedule, and a home improvement contract may not make the homeowner forfeit the deposit on cancellation. | W. Va. Code 30-42-10 |
| Wisconsin | No cap. Prepayments need a written contract and go only to that job | Wisconsin sets no deposit limit, but any home improvement contract that takes payment before the work is complete must be in writing, and that money may be used only for materials and services for that job. | Wis. Admin. Code ATCP 110.02(10) and 110.05(1) |
| Wyoming | No statewide cap | Wyoming has no state general contractor license or deposit limit. On exterior storm damage repairs, the owner can cancel within 3 business days and the contractor must return all payments within 3 days. | W.S. 40-12-705 |
This page is general information, not legal advice. We checked every row on October 15, 2026 against the statute, regulation or agency page linked in it. Laws change, courts decide what the words cover, and cities and counties can add their own rules. Before you set a deposit on a real contract, confirm the rule with your state's licensing board or consumer protection office, or ask a lawyer.
Why some states cap deposits
A cap limits what the homeowner can lose
A deposit cap limits how much a homeowner has paid before any work is done. If the job never starts, the loss is the deposit, not the whole job.
Most states use the contract instead
Where there is no cap, the protection is paperwork: a written contract that names the deposit and the payment schedule, and a right to cancel. Virginia, for one, requires the residential contract to state the down payment and to be signed before any payment is taken.
Some rules turn on the size of the deposit
Florida does not cap the deposit, but a contractor who takes more than 10 percent must apply for permits within 30 days and start work within 90 days of the permit. Oregon can put a contractor on probation for taking more than half and then not doing the work.
Special order materials are the usual exception
Massachusetts lets the deposit cover special order or custom materials when they cost more than a third of the price, and Pennsylvania adds special order materials named in the contract on top of its one third. Ohio allows up to 75 percent of a special order item that cannot be returned.
How to ask for a deposit the right way
- Look up your state before you price the job. Find your state in the table and read what the rule covers. Several caps apply only to work on an existing home, only above a contract size, or only to some trades, so check whether your job is in or out.
- Write the deposit into the estimate as a dollar figure. Put the deposit and the rest of the payment schedule on the estimate, tied to stages of the work: a deposit at signing, progress payments at milestones, the final payment at completion. The client sees what is due and when before they sign.
- Keep progress payments behind the work. California and Nevada do not let payments after the deposit run ahead of the work performed. Where that is not the law, billing each stage after it is done still means the client has only paid for work they can see.
- Say what happens to the deposit if the job is canceled. Spell out when the deposit is refundable and what it has already paid for. Under the federal Cooling-Off Rule, a sale of $25 or more that a seller makes in person at the buyer's home gives the buyer 3 business days to cancel, and many states add their own cancellation rights on top.
- Collect the deposit when the client signs. Ask for the deposit in the same step as the signature, so the job is booked and paid for at once. In Maryland, Pennsylvania, Virginia and the District of Columbia, no payment may be taken before the contract is signed anyway.
Put the deposit in the estimate, collect it at signature
The deposit is on the estimate
Set it as a dollar amount, or as a deposit line at the top of the payment schedule, such as 30 percent deposit, 40 percent at rough-in and 30 percent at completion. Staxen will not save a deposit bigger than the estimate total, and the schedule has to add up to 100 percent.
The client signs and pays on one link
Eddie texts the estimate from your business number. Your client opens it on their phone, signs, and gets a Pay deposit button on the same page: card, or bank transfer if ACH is on in your Stripe account. No app and no login for them.
No Stripe yet, still on record
If you have not connected Stripe, the signed estimate shows the deposit as due by check or cash, and Staxen tells you it is owed. Connect Stripe later and the Pay deposit button shows up the next time the client opens the link.
You set the amount, not Staxen
Staxen does not check your deposit against your state's rule. Look up your state in the table above, then set a deposit at or under its cap.
Frequently asked questions
How much can a contractor ask for as a deposit in California?
On a home improvement contract, no more than $1,000 or 10 percent of the contract price, whichever is less, under Business and Professions Code 7159.5. On a $25,000 kitchen that is $1,000. After the down payment, payments may not run ahead of the work done or materials delivered. A contractor with an approved performance and payment bond or joint control is exempt.
Which states limit contractor deposits?
Eight states cap residential or home improvement deposits: California, Nevada, Maryland, Maine, Massachusetts, Pennsylvania, Vermont and Ohio. Arizona caps only pool and storm insurance repair jobs, and Tennessee's one third limit applies only in the nine counties that adopted its home improvement law. Each rule has its own scope, so read your state's row.
Can a contractor ask for 50 percent up front?
In most states, yes, if the contract says so, because there is no statewide cap. Not in the eight capped states. In Florida a deposit over 10 percent starts a 30 day clock to apply for permits, and in Oregon taking more than half and then not doing the work can put your license on probation.
Do deposit limits apply to new home construction?
Often not. The Massachusetts and Pennsylvania caps cover work on existing homes and leave out building a new one. Ohio's 10 percent cap covers new homes and remodels over $25,000, and Maine's covers building, remodeling and repair. Check the scope in your state's row before you rely on it.
Does a contractor have to keep the deposit in a separate account?
In New York, yes: money taken before the job is substantially complete goes into an escrow account at a New York bank within 5 business days, unless the contractor gives the owner a bond or letter of credit. Texas requires a construction account on homestead jobs over $5,000, and Colorado roofers hold payments in trust until materials arrive or most of the work is done.
Can Staxen collect the deposit when my client signs?
Yes. Put the deposit on the estimate as a dollar amount or as a deposit line in the payment schedule. Your client signs on their phone and, with Stripe connected, pays the deposit on the same page. Staxen is $59 per month per AI employee, or $149 per month for all three, and the first 7 days are free in the app.