✎ Fill In Your Information
[Contractor Name]
[Contractor Address]
Property: [Your Property Address]
Contract Date: [Contract Date]
Deposit: [Deposit Amount]
2. California Business & Professions Code Section 7107 - Abandonment of a construction project constitutes a cause for discipline. Your failure to even begin work after accepting payment is abandonment.
3. California Business & Professions Code Section 7159.5 - Diversion of funds received for a construction project without completing the work is grounds for license discipline and civil liability.
4. California Penal Code Section 484/487 - Taking money under false pretenses with no intention of performing the promised work constitutes theft, punishable as a misdemeanor or felony depending on the amount.
5. Breach of Contract - You have materially breached our agreement by failing to perform any work while retaining my payment.
Payment should be made by certified funds (cashier's check or money order) mailed to my address above.
- CSLB Complaint: Filing a formal complaint with the Contractors State License Board for abandonment and fund diversion
- Bond Claim: Filing a claim against your contractor's bond for the full deposit amount
- Civil Lawsuit: Filing suit in Small Claims Court or Superior Court for return of deposit plus additional damages
- Treble Damages: Seeking three times my actual damages under B&P 7160 for willful misconduct
_________________________________
[Your Name]
[Your Address]
- Copy of signed contract
- Copy of payment receipt/canceled check/bank statement showing deposit
- Log of attempted communications (calls, texts, emails)
- CSLB license lookup printout (if applicable)
- Photographs of property showing no work performed
- Contractors State License Board
- [County] District Attorney's Office
- [Surety Company Name] (Contractor's Bond)
📋 Instructions
Before Sending This Letter
- ✓ Gather payment proof - Locate canceled checks, bank statements, credit card receipts, Zelle/Venmo confirmations, or any record of your deposit payment
- ✓ Document communication attempts - Create a log of all calls, texts, emails, and visits with dates, times, and outcomes
- ✓ Take photos of your property - Document that no work has been performed (roof unchanged from before contract)
- ✓ Check contractor's license - Go to cslb.ca.gov to verify license status and get bond/surety information
- ✓ Verify contractor's address - Confirm you have a valid mailing address; check business registration with Secretary of State
California Deposit Limits
🚨 B&P 7159(d)(1) Deposit Limits
California law strictly limits contractor deposits:
- Maximum deposit: $1,000 or 10% of contract price, whichever is less
- If contractor took more, this is an ADDITIONAL violation
- Contractors cannot demand payment until work is performed or materials delivered
How to Send the Letter
⚠ Use Multiple Methods
For deposit theft cases, send the letter via multiple methods to ensure receipt:
- USPS Certified Mail, Return Receipt Requested - Primary method with legal proof
- Email - Send a copy if you have contractor's email
- Text message - Photo of letter with brief message
If Contractor Cannot Be Found
If the contractor has disappeared:
- File a police report for theft immediately - you don't need to send a demand letter first for criminal complaints
- File CSLB complaint - they can help locate the contractor
- File bond claim with surety company listed on CSLB license record
- Check Secretary of State for registered agent addresses
- Consider hiring a skip tracing service for civil lawsuit
⚖ Legal Basis
Taking a deposit and failing to perform work is both a civil wrong and potentially a crime under California law.
B&P Code Section 7159(d)(1) - Deposit Limits
Contractors cannot request a down payment in excess of $1,000 or 10% of the contract price, whichever is less. Any deposit above this limit is itself a violation, regardless of whether work is performed.
B&P Code Section 7107 - Abandonment
Abandonment of any construction project without legal excuse constitutes a cause for discipline. Failing to even begin work after accepting payment is clear abandonment.
B&P Code Section 7159.5 - Diversion of Funds
Diversion of funds received for construction work, without completing the contracted work, is grounds for license discipline. This includes using customer deposits for other purposes.
Penal Code Section 484/487 - Theft
Taking money through false pretenses - such as promising to perform work with no intention of doing so - constitutes theft. Amounts over $950 can be charged as felony grand theft.
B&P Code Section 7160 - Treble Damages
Willful misconduct that damages a homeowner - including taking money without performing work - entitles the victim to three times their actual damages.
🚨 Criminal vs. Civil Remedies
Deposit theft can be pursued on both criminal and civil tracks simultaneously:
- Criminal: Police report and DA prosecution - contractor may face jail time and restitution order
- Civil: Lawsuit for return of deposit plus damages - you control the case
- CSLB: License discipline - may help pressure settlement but doesn't get you money directly
- Bond Claim: File against contractor's surety for up to $25,000
💡 Unlicensed Contractor?
If the contractor was unlicensed, you have an even stronger claim. Under B&P 7031, unlicensed contractors must return ALL compensation paid - not just the deposit. There's no bond, but criminal prosecution is more likely for unlicensed operators who steal deposits.
💰 Available Remedies
Multiple avenues exist to recover your stolen deposit and hold the contractor accountable.
Return of Deposit
- Full deposit refund - You are entitled to 100% of what you paid
- Excess deposit violation - If they took more than $1,000 or 10%, additional penalties may apply
Enhanced Damages
💰 Treble Damages (B&P 7160)
Taking a deposit and disappearing without performing work is willful misconduct entitling you to THREE TIMES your actual damages.
Example: $5,000 deposit stolen = potential $15,000 recovery.
Contractor's Bond ($25,000)
Licensed contractors must maintain a $25,000 surety bond. For deposit theft:
- Get bond information from CSLB license lookup
- Send written claim to surety company with documentation
- Bond covers return of deposits taken in violation of law
- You may not need a court judgment first for clear deposit theft
Criminal Restitution
If the District Attorney prosecutes and obtains a conviction:
- Court can order restitution as part of sentencing
- Failure to pay restitution can result in additional jail time
- Restitution orders can be converted to civil judgments
Small Claims Court
For amounts up to $12,500:
- No attorney needed
- Filing fee only $75-$100
- Hearing usually within 30-70 days
- Can sue for deposit plus additional damages
✔ Credit Card Chargeback
If you paid by credit card, you may be able to dispute the charge for services not rendered. Contact your credit card company immediately - there are time limits (usually 60-120 days). This can be the fastest way to recover your money.
👥 When to Hire an Attorney
Handle Yourself If:
- Deposit was under $4,000 (treble damages under $12,500 Small Claims limit)
- You have clear documentation (contract, payment proof)
- Contractor's identity and license status are known
- You're comfortable filing police reports and CSLB complaints
- Bond claim is straightforward
Hire an Attorney If:
- Deposit exceeds $4,000 (treble damages exceed Small Claims)
- Part of a larger pattern of fraud (multiple victims)
- Contractor is disputing the facts or threatening you
- Complex corporate structure makes identifying responsible party difficult
- You want to coordinate with criminal prosecution
- Contractor filed or threatened a mechanic's lien
- Multiple contractors or parties are involved
💡 Pro Tip: Concurrent Remedies
You can pursue criminal complaints, CSLB complaints, bond claims, and civil lawsuits simultaneously. They don't cancel each other out. Often the criminal threat is what motivates payment.
Contractor Stole Your Deposit?
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Book $125 Consultation →🚀 Action Steps
Document Everything Immediately
Gather contract, payment proof, all text messages, emails, and call logs. Take screenshots of everything. Create a written timeline of events. Photograph your property showing no work was done.
Credit Card Chargeback (If Applicable)
If you paid by credit card, contact your issuer IMMEDIATELY to dispute the charge for services not rendered. Time limits apply. This can be the fastest recovery method.
Verify License and Get Bond Info
Check CSLB at cslb.ca.gov. Print the license record showing bond/surety company information. If unlicensed, note this - it strengthens your criminal complaint.
Send Demand Letter
Complete the form above, print, sign, and send via Certified Mail. Also email and text a copy. Give a short deadline (10 days) since the contractor already has your money with no excuse.
File Police Report
Don't wait for demand letter response. File a theft report with local police immediately. Provide all documentation. Get a case number for your CSLB complaint and civil case.
File CSLB Complaint and Bond Claim
File online at cslb.ca.gov. Simultaneously send a written claim to the surety company listed on the license. Include all documentation with both filings.
File Lawsuit If Necessary
If no response to demand letter and bond claim is delayed, file in Small Claims Court (up to $12,500) or Superior Court for larger amounts. You can sue for deposit plus treble damages.
⚠ Act Quickly
Contractors who steal deposits often do it to multiple victims. The faster you act, the better your chances of recovering money before they disappear completely or file bankruptcy. Every day matters.