01Problem
Homeowners pay into a $520 billion remodeling market (Harvard JCHS LIRA, Q3 2026 annual rate) against contractors who control licenses, draws, and mechanic’s-lien clocks. FTC Consumer Sentinel Network Data Book 2024 logged 81,925 “Home Improvement, Repair, and Solar” reports. BBB Scam Tracker Risk Report 2025: home-improvement median loss $1,405 (costliest 10% median $14,050). A kitchen dwarfs California’s $25,000 license bond; unpaid subs can still lien the house after the owner has already paid the GC. California and Nevada cap the down payment at $1,000 or 10%, whichever is less.
02Intake
- Property address, occupancy (owner-occupied vs rental), and job type (ordinary remodel, solar, ADU, disaster rebuild).
- Unsigned bid/contract, change-order form, allowance schedule, and every payment already made (amount, date, method).
- Contractor legal name, DBA, license number, salesperson/HIS registration, entity type.
- Scope, fixed price vs T&M, start/completion dates, who pulls permits.
- Preliminary notices already received; Notice of Completion status; any lien recorded.
- State (CA/NV deposit cap, MD/MA one-third, NY 71-a escrow, FL 10% clocks, PA HICPA).
- Whether a lender, PACE, or solar loan is funding draws.
03Playbook
- 01
Cap the down payment in statute, then negotiate everywhere else. Cal. Bus. & Prof. Code 7159.5(a)(3) and NRS 624.970 (owner-occupied SFR; contracts on/after Oct. 1, 2023): down payment $1,000 or 10%, whichever is less. Maryland BR 8-617: one-third. Massachusetts G.L. c.142A § 2: greater of one-third or actual cost of special-order materials. Pennsylvania HICPA (73 P.S. § 517.9(10), as amended by Act 52 of 2011): on a contract more than $5,000, deposit not over one-third, or one-third plus designated special-order materials. Original 2008 text used $1,000; the $5,000 figure is also the HICPA registration threshold for prior-year work — a different trigger. New York: no percentage cap; Lien Law § 71-a(4) puts pre-completion payments in a NY-bank escrow within five business days or a bond/LOC. Florida: no percentage cap; Fla. Stat. § 489.126: if the initial payment is >10%, apply for permits within 30 days and start within 90 days after permits issue.
- 02
Pay only for value in place. 7159.5(a)(5): except the down payment, the contractor shall neither request nor accept payment exceeding the value of work performed or materials delivered — including lender advances. Violation of (a)(1), (3), or (5) is a misdemeanor ($100–$5,000 and/or up to 1 year). NRS 624.970: payments shall not exceed 100% of value in place except the deposit. “Pay 50% today to order cabinets” before delivery is illegal in CA/NV.
- 03
Collect a waiver from every claimant, not just the GC. A GC’s waiver does not bind a sub who did not sign. California Civil Code 8132 conditional progress, 8134 unconditional progress, 8136 conditional final, 8138 unconditional final. Progress forms use a Through Date, not a through-amount. Never exchange 8134/8138 until the check has cleared — the unconditional form is enforceable even if unpaid. 7159.5(a)(6): owner may withhold all further payments until full and unconditional releases for the portion paid are furnished.
- 04
Run the lien clock on day one. California: most claimants serve a 20-day preliminary notice (Civ. Code 8200). Direct contractor records a lien within 90 days after completion, shortened to 60 days after a recorded NOC (8412); other claimants 30 days after NOC (8414). Owner may record the NOC on or within 15 days of completion (8182). Foreclose within 90 days of recording (8460). Texas residential original-contractor affidavit: 15th day of the third month after the month of completion, termination, or abandonment (Prop. Code 53.052); SB 929 (May 21, 2025) rolls a weekend/holiday deadline to the next business day. Florida claim of lien: 90 days after final furnishing (713.08(5)); Notice to Owner in 45 days if not in privity. New York Lien Law § 10: four months on a single-family dwelling, eight months otherwise. Firing the contractor does not wipe lien rights for work already furnished (Florida 713.08).
- 05
Hold retainage through punch and finals. On a 1–4 story non-mixed-use house, California’s new 5% retention cap (SB 61 / Civ. Code 8811, contracts on/after Jan. 1, 2026) does not apply. Contractual 5–10% retainage is still a negotiation. Existing prompt-pay (8800/8812/8814): owner→GC progress within 30 days; retention within 45 days after completion; 2%/month on amounts wrongfully withheld.
- 06
Change orders in writing before the extra work starts. 7159: a change order is part of the contract only if written, signed, scoped, priced, and schedule-effect stated before that work starts. SB 440 / Civ. Code 8850 (contracts on/after Jan. 1, 2026) has 30-day review / 60-day pay / 2%/month interest — and 8850(o) excludes 1–4 story non-mixed-use residential.
- 07
Know what “bonded” means. CSLB contractor license bond is $25,000 (B&P 7071.6). Bond-claim action: two years after the expiration of the license period during which the act occurred (7071.11). A full performance-and-payment bond covering the contract is the 7159.5(a)(8) path that exempts the down-payment cap. LLC extra in CA: $100,000 worker bond (7071.6.5) plus CGL.
- 08
Stack recovery in the right order. Demand letter → license-board complaint → bond claim on the 7071.11 clock → small claims if under the cap → civil/arbitration → recovery fund after judgment where one exists. California: B&P 7031(b) recovers all compensation paid to an unlicensed person; small claims $12,500 (CCP 116.221). Florida 489.143: Division I/II contracts on or after July 1, 2024, $100,000 / $30,000 per claim within 1 year after the qualifying proceeding. Virginia 54.1-1123: $30,000 per claim / $100,000 per biennium (July 1, 2025). Maryland MHIC Guaranty Fund: $30,000 or amount paid, whichever less, $250,000 aggregate, 3 years, licensed only. CA’s $25k bond is a direct claim; FL’s fund is post-judgment.
- 09
Pay the deposit by credit card when the processor accepts it. Chargeback rights are a private-network remedy, not a substitute for the statutory cap. Final payment waits until punch is 100% complete and unconditional finals are in hand after the check clears.
- 10
25C/25D are 0% on a 2026 install. Both credits ended for property placed in service / expenditures after Dec. 31, 2025 (P.L. 119-21; IRS FS-2025-05 FAQ 7). Paying in 2025 does not preserve 25D if installation is completed after that date.
04Checklists
Contractor payment schedule, lien-waiver and recovery guard
- CA/NV down payment ≤ $1,000 or 10% (lesser); MD/MA ≤ one-third (MA: or special-order cost if greater); PA one-third on contracts more than $5,000
- NY pre-completion funds in 71-a escrow or bonded; FL >10% initial: permit 30 days / start 90 days
- Draws ≤ value in place / materials delivered
- Conditional waivers from GC and every 20-day-notice claimant before the next payment
- No unconditional waiver before funds clear
- Change orders written, priced, signed before extra work
- Retainage held through punch list + finals; NOC within 15 days of CA completion if shortening sub windows
- License-bond vs performance-bond distinguished
- Recovery-fund / 7031(b) / small-claims path calendared
- 25C/25D not used as a 2026 price reduction; deposit by credit card if accepted
- Final payment withheld until 100% complete and 8138-equivalents in hand
05Questions to ask
- Q01
“What is the down payment in dollars, and which statute lets you collect more than $1,000 (CA/NV) or one-third (MD/MA) before work starts?”
- Q02
“List every subcontractor (name, license, classification) and confirm I will get a conditional waiver from each preliminary-notice claimant before the next draw.”
- Q03
“Will you exchange unconditional waivers only after my check has cleared?”
- Q04
“Is this a $25,000 license bond, or a performance-and-payment bond covering the full contract amount?”
- Q05
“Who pulls the permit, in whose name, and what are the start and completion dates?”
- Q06
“What is the unit-price and markup rule for change orders, and will extras be written and signed before that work starts?”
- Q07
“If the initial payment is more than 10% in Florida, confirm the 30-day permit / 90-day start clocks in writing.”
- Q08
“If you are unlicensed for this class of work, confirm you will refund all compensation paid under B&P 7031(b) (CA) or the equivalent.”
- Q09
“Where do I file a bond claim or recovery-fund claim in this state, and what judgment do I need first?”
06Red flags
Cash-only or “pay 50% today to order materials”
GC waiver offered as covering all trades
Unconditional lien waiver handed over with an uncashed check
“I’m bonded” meaning only the $25,000 license bond on a six-figure job
Repeated requests for advances ahead of value in place
Owner must pull the permits
T&M or cost-plus on a CA disaster rebuild
Promising a 30% federal 25C/25D credit on a 2026 install
“Firing him makes the work free” (it does not; liens survive for work furnished)
Verbal extras after “we opened the wall and found rot”
07Scripts
I will not sign or fund this contract as drafted. Cal. Bus. & Prof. Code § 7159.5(a)(3) caps the down payment at $1,000 or 10% of the contract price, whichever is less. On a $50,000 fixed-price kitchen that maximum is $1,000, not $5,000. Send a completed Home Improvement contract that is signed and dated by both of us before any work starts (B&P 7159), with the 12-point down-payment and progress-payment notices, the SB 517 subcontractor checkbox, two Notices of Cancellation, and a schedule that never asks for payment beyond the value of work in place or materials delivered. I will pay $1,000 at signing and later draws only against delivered materials and inspected work, each paired with Civ. Code 8132 waivers from you and every 20-day-notice claimant.
Under B&P 7159.5(a)(6) I am withholding further payment until you furnish a full and unconditional release from every potential lien claimant for the portion already paid. Send Civ. Code 8132 (conditional progress) now, listing Through Date [date] and the check number. I will exchange 8134/8138 unconditional forms only after that check has cleared. Preliminary notices already in my file: [list]. A recorded Notice of Completion is going in within 15 days of completion (Civ. Code 8182). A waiver signed only by the general contractor does not bind a sub who did not sign.
You were not duly licensed in the required classification at all times during this job. Under B&P 7031(b) I demand return of all compensation paid, totaling $[X], within 14 days. Under 7031(a) you may not sue to collect. I am filing with CSLB and, if unpaid, will proceed in court (small claims up to $12,500 under CCP 116.221, or unlimited civil).
08Tools
Callable over MCP once connected. Your agent passes the inputs and gets structured results back.
contractor_deposit_cap_checkerDeposit-cap checker- Legal maximum down payment on a home-improvement contract: CA/NV lesser of $1,000 or 10%; MD one-third; MA one-third or special-order cost; PA one-third on contracts over $5,000; FL 10% trigger for permit/start deadlines; NY escrow reminder. Returns the overage and statute.
waiver_and_lien_clockWaiver-and-lien clock- Who can still record a mechanics' lien and by when — CA (90 days after completion; with a notice of completion: 60 days for the GC, 30 for subs), TX (15th day of the third month after completion, residential), FL (90 days after last furnishing), NY (4 months single-family, 8 months otherwise) — and which waiver to collect with this draw (CA statutory conditional/unconditional progress or final forms).
contractor_recovery_path_pickerRecovery-path picker- Next filing and cap when a contractor takes your money: CA unlicensed → disgorgement of everything paid (B&P § 7031(b)); CA licensed → $25,000 license bond; FL recovery fund after judgment ($100,000 / $30,000 by division); VA fund $30,000 per claim / $100,000 biennium; MD guaranty fund lesser of $30,000 or amount paid ($250,000 aggregate, licensed only).
09Formulas & rules
- CA/NV down payment. (\min($1{,}000,\ 0.10 \times \text{price})). $50,000 kitchen: 10% = $5,000; cap = $1,000. $6,000 paint job: cap = $600. $150,000 addition: still $1,000. Asking $5,000 (10%) on the $50,000 kitchen is a 7159.5 misdemeanor. Legal path: $1,000 down; $18,000 when $18,000 of cabinets are on site; later draws ≤ value in place; retainage through punch + 8138s.
- MD/MA one-third. $60,000 job → $20,000. MA: if special-order materials cost $25,000, the cap is $25,000. NY: the same $20,000 must sit in 71-a escrow or be bonded.
- PA $5,000 trigger (current § 517.9(10)). $4,999 job: no statutory one-third cap. $6,000 job: cap = $2,000, or $2,000 plus designated special-order materials. A $50,000 kitchen: cap = $16,667 (one-third), unlike CA’s $1,000.
- FL 10% clock. $50,000 contract, $5,001 initial payment → permits due in 30 days, start due 90 days after permits. $5,000 even is at the 10% line; the statute triggers on more than 10%.
- Lien clocks worked. CA, no NOC: completion Monday June 15, 2026 → GC records by September 13, 2026. NOC recorded June 20 → GC August 19; subs July 20. TX residential complete in March 2026 → affidavit June 15, 2026. FL last furnishing March 1 → claim of lien May 30, 2026. NY single-family last item June 15, 2026 → notice of lien by October 15, 2026 (four months).
- Recovery caps. FL 489.143: $100,000 / $30,000 per Div I / II claim on contracts on/after July 1, 2024; file within 1 year after the qualifying proceeding. VA 54.1-1123: $30,000 per claim / $100,000 biennium (July 1, 2025). MD MHIC: lesser of $30,000 or amount paid; $250,000 aggregate; 3 years; licensed only. CSLB bond claim: 2 years after the license period ends (7071.11).
- FTC Cooling-Off (in-home close, 16 CFR Part 429): 3 business days, Saturday counts, refund within 10 business days. CA 1689.6: 5 days if 65+; 7 days after a declared disaster.
10State variation
- AB 2622 (Jan. 1, 2025): unlicensed exemption $1,000 if no permit and no employees; 7159 writing remains $500. SB 517 (Jan. 1, 2026): subcontractor checkbox. SB 61 / 8811 and SB 440 / 8850 (Jan. 1, 2026) exclude 1–4 story non-mixed-use residential.
- CSLB bond still $25,000. WC no-employee exemption delayed to Jan. 1, 2028 (SB 1455). 25C/25D ended Dec. 31, 2025.
- Nevada $1,000/10% since Oct. 1, 2023. Maryland one-third still in force (2026 HB 1499 to raise to one-half did not pass).
- Florida recovery-fund $100,000/$30,000 for contracts on/after July 1, 2024. Virginia $30,000/$100,000 as of July 1, 2025. Texas SB 929 (May 21, 2025): ch. 53 weekend/holiday deadlines roll to the next business day.
- PA HICPA deposit: current § 517.9(10) trigger more than $5,000 (Act 52 of 2011). AG FAQ matches. Registration threshold is also $5,000 of prior-year work. No nationwide FTC/HUD down-payment cap. NJ one-third remains unverified.
11Community tactics
- Lien waivers on every draw from every sub. Verified — CA 8132 et seq. A GC waiver does not bind a non-signing sub.
- Final payment only at 100% complete; deposit via credit card. Partly — final-until-complete is sound; the card is a network remedy. CA/NV still cap the deposit at $1,000/10%.
- Pay in thirds by credit card. Partly — MD/MA/PA use one-third as the cap. In CA/NV a 33% start on a $50,000 kitchen ($16,667) is illegal; the cap is $1,000.
- File a bond claim through the license board; “easier than small claims.” Partly — CA $25,000 license bond is a direct claim (7071.11). FL recovery fund needs a qualifying judgment first (489.143).
- Firing a contractor does not wipe Florida lien rights. Verified — Fla. Stat. § 713.08; lawyer reel (@montesinolaw) matches the statute.
- Red flag: someone who keeps asking for advances. Verified against 7159.5(a)(5) / NRS 624.970.
12Fact-check notes
- CFPB, FMCSA, Pennsylvania Insurance Department, NBC News, and ProPublica pages: none cited in last30days for this skill.
- URLs work this round: B&P 7159.5 ($1,000/10%; value in place); NRS 624.970 (Rev. 4/15/2026); PA OAG HICPA FAQ (search Oct. 30, 2026; deposit on projects more than $5,000; attorneygeneral.gov SSRF-blocked, text from search snippets); Act 132 § 9(10) current trigger more than $5,000, “((10) amended July 7, 2011, P.L.262, No.52)”; Fla. 489.143 $100k/$30k; Fla. 489.126 >10% 30/90; Va. 54.1-1123 $30k/$100k; MD MHIC $30k/$250k.
- Reddit
.../1w0ecc6/failed to fetch; tactics from round2-last30days checked against statute. $52,883 broken-arm X story, Connecticut deposit rule, New Mexico spot-delivery: not used.
13Tools to implement
Show the tool specifications
- Deposit-cap checker. Inputs: state, contract price, special-order materials cost, occupancy, initial payment. Logic: CA/NV min($1,000, 10%); MD 1/3; MA max(1/3, special-order); PA 1/3 on contracts more than $5,000; FL flag if initial >10%; NY escrow reminder. Output: legal max, overage, statute cite. Sources: B&P 7159.5; NRS 624.970; MD BR 8-617; G.L. c.142A § 2; Fla. Stat. § 489.126.
- Waiver-and-lien clock. Inputs: state, completion date, NOC date if any, list of prelim-notice claimants, draw amount, through-date. Logic: which statutory waiver form; who must sign; CA 90/60/30; TX 15th of third month; FL 90 days; NY 4/8 months. Output: who is unpaid, who can still lien, which form to collect today. Source: CSLB mechanics’ lien / waivers.
- Recovery-path picker. Inputs: state, licensed yes/no, amount paid, judgment yes/no. Logic: CA 7031(b) if unlicensed; CA $25k bond; FL fund post-judgment $100k/$30k; VA $30k/$100k; MD $30k/$250k. Output: next filing, deadline, cap.
14Sources
- 01
- 02
- 03
- 04
- 05
- 06
- 07
- 08
- 09
- 10Home Improvement Consumer Protection Act (Act 132 of 2008, § 9(10) as amended)legis.state.pa.us
Pennsylvania General Assembly; $5,000 deposit trigger (Act 52 of 2011)
Demand evidence F3×P5×S4 = 60; r2 §15 “Nobody told me about lien waivers until a subcontractor called about money I had already paid” (r/FirstTimeHomeBuyer, 333 pts)