Q: Can my contractor refuse to order countertops, cabinets, etc. if I don't pay for them upfront?
My home remodel is $250k. The contractor is asking for $85k so they can order rough materials upfront. I didn't think they could do that, as the legislation says "IT IS AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET DELIVERED. HOWEVER, A CONTRACTOR MAY REQUIRE A DOWNPAYMENT.” Am I misinterpreting the law? The contractor indicates I am, and the contract clearly states that 40% will be collected before work starts.
A: Certainly. Under California law, contractors cannot demand or receive payment before the work is completed or before the materials are delivered. However, they are allowed to ask for a down payment. The Business and Professions Code specifies that a contractor's down payment for home improvement or repair cannot exceed $1,000 or 10% of the contract price, whichever is less, unless there's a specific exemption. If your contractor is asking for $85k upfront on a $250k project, this exceeds the permissible down payment limit. Your interpretation of the law aligns with California's statutory limitations on contractor down payments. It would be prudent to discuss your concerns with the contractor and consider seeking legal advice if an agreement cannot be reached. Ensuring clarity and compliance with state laws is crucial for both parties.
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