Lathcheck checklist › Rule explainers
Downpayment limit: $1,000 or 10 percent, whichever is less
Not legal advice. This page is a plain-English summary for general information. It may be incomplete, and the statute text controls. Not affiliated with, endorsed by, or approved by the Contractors State License Board or any government agency. For advice about your contract, consult a licensed California attorney.
What the statute says
Short quotes and close paraphrases; “…” marks omitted text. Read the full section at the link.
If a downpayment will be charged, the downpayment shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less.
If a downpayment will be charged, the heading “Downpayment” … followed by … “THE DOWNPAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE CONTRACT PRICE, WHICHEVER IS LESS.”
In plain English
- The downpayment can be no more than $1,000 or 10% of the contract price, whichever is smaller. On a $5,000 job that is $500; on a $50,000 job it is $1,000.
- If you take a downpayment, the contract needs a “Downpayment” heading, the amount, and the capital-letter statement above (§7159(d)(8) sets the type size).
- The statute's only stated exemption is in §7159.5(a)(8): a contractor who furnishes a registrar-approved bond or joint control (see the bond exemption page). The statute does not list an exception for special-order materials.
What the checklist looks for
- Compares the downpayment you enter with the lesser of $1,000 or 10% of the price.
- Looks for the “Downpayment” heading and the capital-letter statement when a downpayment is entered.
What it can't check
- Type size and boldness.
- Whether a payment called something else (a deposit or a materials payment) is really a downpayment.
Sources
Open the checklist (runs in your browser; nothing is uploaded).