RenoBinderExpect to pay some money before work starts. Never pay all of it up front. Beyond that, the right amount depends on where you live and on the contract, and some states set a firm limit.
What consumer agencies say
- FTC: "Don't pay the full amount for the project up front." Some states limit the down payment, so check with your state or local consumer agency, and "never make the final payment until the work is done and you're satisfied with it" (FTC).
- Connecticut Department of Consumer Protection: pay deposits with a traceable method like a credit card, or a check made out to the name on the contractor's registration. Never pay deposits in cash or through peer-to-peer apps such as Venmo, PayPal, or Cash App. Demanding full payment up front is a red flag. Connecticut suggests splitting payments into three parts: (1) the deposit and initial material costs, (2) halfway through, and (3) after completion. Get a receipt after each payment (CT DCP).
- Texas Attorney General: expect to pay part of the cost before work begins, but don't pay in full until the work is complete and you've inspected it. Don't sign a certificate of completion until the work is finished and the site is cleaned up (Texas AG).
Example: California's down payment cap
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Start a free planCalifornia law limits a home improvement down payment to $1,000 or 10% of the contract amount, whichever is less. After that, payments can't exceed the value of work performed or materials delivered. If there are progress payments, the contract must include a schedule of payments in dollars and cents that names the work each payment covers (Cal. Bus. & Prof. Code § 7159.5). There is a narrow exception for contractors with a blanket performance and payment bond on file with the state board, and the CSLB says these are rare (CSLB).
So on a $40,000 California remodel, the down payment is capped at $1,000, not $4,000.
Other states have their own rules. Look up yours with your state's contractor licensing board or attorney general before you sign.
Tie each payment to something you can see
A payment schedule should say what has to be done before each payment is due, not just the date. For example:
| Payment | Due when | What you check first |
|---|---|---|
| Deposit | Contract signed | Within your state's limit; traceable payment |
| Progress 1 | Demo and rough-in done, inspection passed | Inspection sign-off |
| Progress 2 | Cabinets/tile installed | Work matches the contract and change orders |
| Final | Punch list complete, site clean | You've inspected it and you're satisfied |
(Illustrative structure, not a legal template. In California, the schedule must be in dollars and cents, tied to specific work.)
Ask for lien releases
If the contractor doesn't pay subcontractors or suppliers, you can end up with a lien on your home. Texas's AG warns that you can be responsible even though you didn't contract with them directly (Texas AG). In California, after each payment you can ask for a full, unconditional release of lien claims for the work you paid for, and you can withhold further payments until you get it (BPC § 7159.5(a)(6)).
Keep the paper trail
Save the contract, every change order, every invoice, and every receipt in one place. You'll need them for disputes and warranty claims, and possibly later for taxes (see tracking remodel receipts).
RenoBinder tracks planned, committed, and paid for every line of your budget, so you can see before each draw whether the payment matches the work done.
Free for one room. Receipt forwarding, a partner seat, exports, and more rooms come with the Project Pass.
Track payments in a free plan →General information, not legal advice. Payment and lien rules vary by state.
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