California Home Improvement Contract Requirements

California has some of the most detailed home improvement contract requirements in the country. Under Business and Professions Code Section 7159, every home improvement project over $500 in combined labor and materials requires a written contract with specific provisions. An estimate alone may omit required notices and terms; review the complete agreement before signing.

Missing required contract information can lead to CSLB discipline. Do not assume a paperwork defect automatically cancels your payment obligations; get advice about your specific dispute.

When a Written Contract Is Required

Any home improvement project exceeding $500 in combined labor and materials must have a written contract signed by both parties before work begins. "Home improvement" covers remodeling, repairs, renovations, additions, and modifications to existing residential property, including many ADU conversion projects. Confirm the appropriate contract for your project; new construction and qualifying service-and-repair contracts can involve different rules.

Use a written agreement even for smaller jobs. The $500 home-improvement contract threshold is different from the contractor-licensing threshold.

Required Contract Provisions

Use this overview to review key provisions, then check the full statutory requirements and notices linked below:

The contractor's name, address, license number, and license classification.
The total contract price in dollars and cents.
The start date and estimated completion date.
A description of the work to be performed and the materials to be used.
A payment schedule listing each progress payment in dollars and cents, tied to a specific phase of work. The schedule must describe the type and amount of work in each phase.
The down payment amount, which cannot exceed $1,000 or 10% of the contract price, whichever is less. See our deposit rules guide for details and the approved-bond exception.
A notice about the homeowner's right to cancel the contract, including the cancellation timeframe and method.
A "Notice to Owner" about mechanics' liens. This warns the homeowner that unpaid subcontractors and suppliers can place liens on the property even if the homeowner has paid the general contractor in full.
A statement about whether subcontractors will be used. As of January 1, 2026, under SB 517, contractors must provide subcontractor names, license numbers, classifications, and contact information upon request.

Look Up a Contractor's License

Cancellation Rights

Cancellation periods depend on the transaction: commonly three business days, five for buyers aged 65 or older, and seven for qualifying disaster-repair contracts. Exceptions apply. Check the applicable notice and when you received the signed contract and required notices, rather than counting from a verbal agreement.

As of January 1, 2026, under AB 1327, homeowners can cancel by email in addition to mail or hand delivery. Contractors must include an email address for cancellation notices and a phone number for assistance in the contract.

If the required cancellation notice is missing, contact CSLB or a qualified legal adviser promptly. Do not assume you have an unlimited cancellation period.

Avoid Open-Ended Agreements

Ask for a clear total price, scope and payment schedule before signing. An hourly rate or cost-plus formula alone does not supply those details. Have a California construction attorney review any nonstandard agreement rather than assuming its label determines compliance or enforceability.

For covered projects over $500, get the agreement in writing before work starts. Whether a defective agreement can be enforced is a separate legal question.

Change Orders

If the scope of work changes after the contract is signed, a written change order is required. The change order must describe the additional work, the added cost, and how it affects the payment schedule. Both parties must sign the change order before the additional work is performed.

Verbal change orders are a frequent source of disputes. "The homeowner told me to go ahead" is not sufficient documentation if the added work leads to a payment disagreement.

If Something Is Missing

Ask the contractor to correct missing terms before you sign. Check the required content, notices and formatting rather than judging completeness by page count. For a dispute about an existing agreement, seek advice before cancelling or withholding payment.

Review Business and Professions Code section 7159 and CSLB's Contracting for Success. These references cover requirements beyond this overview.

Compare Before You Commit

Use our printable bid-comparison worksheet to record scope, exclusions, allowances and payment milestones for each bidder. Then follow the license verification guide before signing.

Updated September 19, 2026. Covers contract provisions, cancellation notices and questions to resolve before signing.