Your Deposit Is $1,000. Not $20,000. Not $50,000. That Is the Law – and We Put It in Writing.
Sacramento homeowners have learned the hard way what happens when a builder takes big money up front. There is a California law written to prevent exactly that – and most people have never heard of it. Here it is, and here is how we hold ourselves to it.
- $1,000 maximum deposit – in the contract
- You pay for finished work, never promises
- Verify any license free at cslb.ca.gov
- Free written estimates, no obligation
The law most homeowners have never heard of
California Business & Professions Code §7159.5 says a home improvement contractor may not take a down payment larger than $1,000 or 10 percent of the contract price – whichever is LESS.
Read that twice, because the “whichever is less” part is what protects you. On a $200,000 ADU, 10 percent would be $20,000. The law does not allow that. The legal maximum deposit on that project is one thousand dollars. The same statute says that after the deposit, a contractor may not collect money that exceeds the value of work actually performed or materials actually delivered. Your money follows the work. Never the other way around.
So when a builder asks for $15,000, $30,000, $50,000 “to get you on the schedule” or “to order materials” – before a shovel touches your dirt – they are asking you to hand over money the law says they should not be holding. Some of those builders are just sloppy. Some are something worse. Sacramento found out which, recently, on the evening news.
You can read the statute yourself: B&P Code §7159.5 on the California Legislature site.
The Safe Builder Standard: 8 commitments, in writing
This is the standard we hold ourselves to on every project. Bring this list to any builder you talk to – including us – and watch how they react to it.
$1,000 maximum deposit
Exactly what §7159.5 allows and not a dollar more – stated in the contract, not just on a website.
Payments follow finished work
Milestones are tied to work you can stand in front of and inspect. Foundations poured. Walls framed. Never calendar dates, never promises.
A license you can verify yourself
Every California contractor license is public at cslb.ca.gov – status, bond and classification. Ask for the number on the first call and look it up. That goes for us too.
Insurance certificate, delivered
You see current liability coverage before work begins – a certificate in your hand, not a verbal assurance.
Written scope, written changes
The contract says what is included. Anything that changes gets a signed change order with a price BEFORE the work happens. Change-order ambushes are how honest budgets die.
Lien releases with payments
As subs and suppliers are paid, you get releases – so nobody can come after YOUR house for money someone else failed to pass along.
Real numbers after a real site visit
Nobody can price your lot from a phone call. The estimate is free, on-site, and in writing – and if an ADU does not pencil on your property, we say so and leave politely.
No pressure, ever
No “price expires tonight.” No deposit-to-hold-your-spot. A six-figure decision deserves a clear head and an unhurried yes.
Why we publish this
Because trust in this market was broken by people who talked a great game.
In the past two years, Sacramento-area homeowners watched a prominent local ADU company collapse mid-projects – license revoked, founders in bankruptcy, families out their deposits with half-built structures in the yard, as NBC Bay Area reported. In January 2026, another local ADU builder’s license was suspended after its bond was cancelled.
We cannot un-break what happened to those families. What we can do is run our business so the same thing cannot happen to yours: keep your money in your pocket until the work is standing in your yard. That is not generosity. It is the law, followed to the letter – which, it turns out, is rare enough to be a selling point.
The full homeowner education piece is here: How to vet an ADU builder in Sacramento.
Questions homeowners ask about payment safety
Is the $1,000 deposit limit really the law?
Yes. California Business & Professions Code §7159.5 caps the down payment on a home improvement contract at $1,000 or 10 percent of the price, whichever is less. For any ADU project over $10,000 – which is every ADU project – the cap is $1,000. The statute is public on the California Legislature website.
Then why do builders ask for huge deposits?
Some do not know the law. Some use your deposit to finish the previous customer’s job – and when new deposits stop coming, the music stops. Either answer should worry you. A builder with healthy finances does not need your money before doing your work.
How do payments actually work on a project with you?
$1,000 when you sign. After that, payments are tied to completed milestones you can inspect – site work, foundation, framing, rough-in, finishes. Each payment matches work already done or materials already delivered, which is exactly what §7159.5 requires.
What should I check before hiring ANY contractor?
License active at cslb.ca.gov under the same business name on your contract. Insurance certificate. A deposit request of $1,000 or less. Milestone payments tied to work, not dates. Written change orders. Lien releases. References with addresses. If any of those make a builder uncomfortable, you have your answer.
Does the deposit cap make projects slower?
No. Materials get ordered against milestones like on any well-run job. The cap changes who carries the risk between milestones – the builder, where it belongs – not the schedule.
Get a real number from a builder who follows the rules
Free on-site estimate, in writing, with the $1,000 deposit cap stated in the contract. If your lot does not pencil, we tell you that too.