Homeowner Protection · San Francisco
By Solid Bay Construction SF | Updated 2026
How you pay for a renovation matters almost as much as what you're paying for. California law puts specific limits on down payments, and a well-structured payment schedule is one of the simplest ways to protect yourself if a project runs into trouble.
Under California Business and Professions Code §7159, a licensed contractor cannot request a down payment larger than $1,000 or 10% of the contract price, whichever is less — with limited exceptions. If a contractor asks for 30% or 50% upfront on a standard remodel, that's a legal red flag worth stopping and questioning before signing anything.
After the limited down payment, the rest should be tied to completed, verifiable milestones — not calendar dates. A reasonable structure for a full renovation might look like:
The key principle: you should never be more than one milestone "ahead" of the work actually completed. If a contractor is asking for the next payment before the current phase has passed inspection, that's worth pausing on.
It's standard and reasonable to hold back a final 5–10% of the contract until the punch list — the small, cosmetic fixes identified at final walkthrough — is fully resolved. This gives the contractor a real incentive to finish those last details promptly rather than treating them as optional.
Pay by check or bank transfer rather than cash, keep every invoice and receipt, and confirm in the contract exactly what "complete" means for each milestone before you agree to the schedule — vague milestone language is where payment disputes usually start.
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