You
What is the legal deposit limit for California contractors?
S
California Business and Professions Code § 7159(d) caps the down payment on home improvement contracts at 10% of the contract price or $1,000, whichever is less. The cap applies to most residential improvements, including remodels, room additions, roofing, HVAC, and similar work. A contractor who collects $5,000 up front on a $20,000 contract has violated the statute. The customer is entitled to refund of the excess deposit. The contractor faces CSLB enforcement and possible license discipline.
You
What does the attorney letter actually do?
S
Three things at once. First, it puts the contractor on notice of the § 7159 violation and demands a refund of the excess deposit and any unearned portion of the down payment. Second, it lays out the parallel tracks (CSLB complaint, civil litigation, mechanic's-lien response if liens have been filed) so the contractor sees the full exposure. Third, it cites the contractor's license-bond as the recovery source if the contractor refuses to pay (CSLB-licensed contractors must maintain a $25,000 license bond and a $1,000 disciplinary bond is sometimes layered). Most contractors refund or restart the project once the letter arrives.
You
How does a CSLB complaint work alongside the letter?
S
The Contractors State License Board complaint runs as a parallel track to the attorney letter. CSLB investigates contractor conduct (license violations, abandonment, fraudulent practices, deposit violations) and can suspend or revoke the license. The CSLB complaint also opens the path to recovery from the contractor's license bond. The attorney letter and the CSLB complaint are stronger together: the letter creates settlement pressure with the contractor directly; the CSLB complaint creates regulatory pressure that contractors take seriously because their livelihood depends on the license.
You
What happens if the contractor is unlicensed?
S
Unlicensed contractor work in California is a disgorgement case. Bus. & Prof. Code § 7031(a) bars an unlicensed contractor from recovering compensation for any work that required a license, and § 7031(b) allows the customer to recover all compensation already paid to the unlicensed contractor, regardless of the quality of the work. This is the most powerful remedy in the contractor-dispute toolkit. The demand letter cites § 7031(b) and demands full refund of every dollar paid. If the contractor refuses, the lawsuit recovers everything.
You
Can the contractor file a mechanic's lien against my home?
S
Yes, contractors can record mechanic's liens under Civ. Code § 8400 et seq. for unpaid amounts. The lien has to be recorded within specified time limits and the underlying work has to have been actually performed. A contractor who took your deposit and walked away cannot validly lien for work not performed. If a lien has been filed, the demand letter addresses release of the lien as part of the resolution and the lawsuit (if filed) includes a slander-of-title or wrongful-lien count. California's preliminary 20-day notice requirement also gives leverage when the contractor failed to serve it.
You
What is the home-improvement-contract documentation requirement?
S
Bus. & Prof. Code § 7159 requires written home improvement contracts that contain specific elements: contractor name, license number, contract price, description of work, payment schedule that matches the work schedule, a notice of cancellation, a Notice to Owner, and the down-payment-cap disclosure. A contract missing required elements is voidable at the customer's option in some circumstances. Even where the customer chooses to enforce, missing disclosures provide leverage in the demand letter and underlying litigation.
You
How fast does this usually move?
S
Two to six weeks for most matters. The attorney letter gets a response within ten to fifteen business days of certified-mail receipt. CSLB complaints take longer (CSLB investigation runs months) but the existence of the complaint and the threat of license action drives short-term settlements. Contractors who are committed to staying in business resolve these matters quickly because the CSLB record follows them. Contractors who have already abandoned the license (or who never had one) get the lawsuit and the bond claim.
You
Does the contract's arbitration clause matter?
S
Yes, but California contractor contracts have several specific arbitration limitations. CCP § 1281.97 requires the drafting party to pay arbitration fees on time or waive the right to arbitrate. CCP § 1284.3 voids certain pre-dispute arbitration clauses in consumer contracts where they are unconscionable. § 7159 itself has disclosure requirements that interact with arbitration. The demand letter addresses whichever clause is in your contract and lays out whether the consumer's path is court, AAA arbitration, or another forum.
You
What is the statute of limitations on contractor disputes?
S
Four years for written contracts (CCP § 337), three years for fraud-based claims with the discovery rule (CCP § 338), three years for statutory violations (CCP § 338(a)), and two years for negligence claims (CCP § 339). Construction defect claims have their own limitations regime under CCP § 337.15 (latent defects, 10-year statute of repose) and § 337.1 (patent defects, 4 years). For deposit disputes specifically, the four-year written-contract window usually applies and is rarely the binding constraint.
You
Can I recover attorney fees in a contractor dispute?
S
If the contract has an attorney-fee clause, yes under Civ. Code § 1717 (and the clause runs reciprocally regardless of which side it nominally favors). § 7159 itself does not contain a fee-shifting provision, but if you bring claims under Bus. & Prof. Code § 17200 (unfair competition based on § 7159 violations), the § 17200 framework allows fees under certain conditions. The demand letter quantifies the fee exposure to the extent the contract or the legal theory supports it.
You
Do you handle construction-defect cases?
S
Construction-defect litigation (latent defects discovered after project completion) is its own specialty with statutory pre-suit processes under Civ. Code § 895 et seq. (the right-to-repair act for residential construction). I handle the front end (intake, statutory notice, demand letter) and refer out the expert-driven defect litigation. Deposit disputes, abandonment cases, unlicensed-contractor disgorgement, and pre-litigation contractor disputes are squarely in my work.