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California home improvement contract requirements

In California, a job over $500 needs a written contract, and the CSLB is specific about what goes in it.

Published November 4, 2026 · by Settle

Quick answer

California requires a written contract for any home improvement job over $500. According to the Contractors State License Board, it must be legible and explain the customer's right to cancel, describe the work and materials, include a written payment schedule where payments don't run ahead of the work, keep the down payment to $1,000 or 10% (whichever is less), give a completion date, say who pulls permits, and identify you with your business address and license number. Changes need a signed change order before the work changes.

The checklist

  1. In writing, for any job over $500. Legible, easy to understand, and telling the customer about their right to cancel.
  2. Your identity: business name, business address and contractor license number.
  3. The work: what will be done, how, who does what, and the materials, including model numbers.
  4. A written payment schedule. Apart from the down payment, no payment can be more than the value of the work done and materials delivered.
  5. Down payment: no more than $1,000 or 10% of the contract price, whichever is less.
  6. Permits: who will get them.
  7. A completion date.
  8. Warranties on labor and materials, in writing.
  9. Cleanup and debris removal, and any special requests.
  10. Change orders: any change in writing, signed by you and the customer before the work changes.
  11. Everything you agreed to. If it was promised, it should be in the contract.

Swimming pool contracts also need a plan and scale drawing with shape, dimensions, construction and equipment specifications. The contract law (Business and Professions Code § 7159) also sets required notices and wording; CSLB's consumer guide Terms of Agreement walks through them.

Where an estimate fits

A quick estimate is how most jobs start, but on a California home improvement job over $500 the signed contract has to carry everything above. Many contractors send the estimate first, then turn the approved version into the full contract with the payment schedule, dates and notices added.

Common mistakes

  • Taking 30% or 50% up front. The cap is $1,000 or 10%, with no exception for special-order materials. Use a progress payment when materials are delivered instead. See the deposit limit calculator.
  • Billing ahead of the work. Progress payments can't exceed the value of work done.
  • Verbal changes. A change without a signed change order is a dispute waiting to happen. Use a change order template.

In Settle

Settle writes the estimate, shows your license number and the deposit on it, and records when the customer approves. It doesn't produce a full California home improvement contract with the statutory notices, so use the approved estimate as the scope and price inside a contract that meets the checklist above.

When is a written contract required in California?

For home improvement projects over $500, per the CSLB.

What is the maximum down payment in California?

$1,000 or 10% of the contract price, whichever is less, excluding finance charges.

Do change orders have to be in writing in California?

Yes. The CSLB says changes must be made with a written change order signed by the customer and contractor before the change.

This guide is general information, not legal advice.

Sources

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