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California home improvement contract and payment rules
Source: California HVAC Help (californiahvachelp.com), part of the Local Help Stations network (localhelpstations.com). Last updated November 2, 2026.
- A home improvement contract is required when the total price is over $500 (B&P 7159).
- The down payment may not exceed $1,000 or 10 percent of the contract price, whichever is less.
- It is against the law for a contractor to collect payment for work not yet completed or materials not yet delivered.
- You can cancel within three business days of getting the signed contract, five business days if you are a senior citizen, or seven business days for repairs after a declared disaster. The contractor must refund within 10 days of your cancellation notice.
- The contract must include the contractor's license number.
(source: California Legislature)
CSLB says there must be a written contract for all home improvement projects over $500 in combined labor and materials costs, and the down payment should never exceed 10 percent of the contract price or $1,000, whichever is less. (source: Contractors State License Board)
Small service calls ($750 or less)
- A service and repair contract is $750 or less, you called the contractor, and the contractor sells only what is needed to fix that problem (B&P 7159.10).
- No payment is due, and the contractor may not accept any, until the work is completed.
- The contractor must offer you any parts replaced during the service call.
- You may be charged only one service charge, including any trip charge or inspection fee.
(source: California Legislature)
On this site: Do I need a permit to replace an AC or furnace in California? · California energy code testing for AC changeouts · Mini-split permits in California · HVAC permit costs in California cities · HVAC work that needs no permit in California cities · Can I do my own HVAC work in California? · When does a California contractor need a license? · California home improvement contract and payment rules · How to check a California contractor and complain · Cities · FAQ · Sources
Sources
- California Legislature (California Legislative Information): Business and Professions Code 7159 (home improvement contracts) (checked November 2, 2026)
- Contractors State License Board (CSLB): Contracts and Binding Agreements (checked November 2, 2026)
- California Legislature (California Legislative Information): Business and Professions Code 7159.10 (service and repair contracts) (checked November 2, 2026)
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