California Residential Construction Contract (Home Improvement) (2026)

A contract between a homeowner and a contractor for building, remodeling or repair work — scope, schedule, price, payment milestones, change orders, insurance, warranty and the notices your state requires in the contract.

Updated September 2026≈ 9 minReviewed against Cal. Bus. & Prof. Code §§ 7030, 7159 · Cal. Bus. & Prof. Code § 7159 · Cal. Bus. & Prof. Code § 7030

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What you'll get

Sample first page of the Residential Construction Contract (Home Improvement). Your answers fill in the blanks; the clauses required in California are added automatically.

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What this document covers

Owner, contractor and licence number
Project address and full scope of work
Start date and substantial completion date
Fixed price, cost-plus or time and materials
Down payment inside your state's legal cap
Payment milestones tied to the work
Written change-order procedure
Permits, inspections and code compliance
General liability and workers' compensation
Warranty, termination, disputes and the notices your state mandates

California rules that this document follows

Contractor license	Contractors State License Board (CSLB) — A home improvement contract must state the name, business address and license number of the contractor, and every contract must carry the CSLB notice in at least 10-point type (12-point for home improvement and service and repair contracts).Source: Cal. Bus. & Prof. Code §§ 7030, 7159(d)(1)
License number on the contract	Required — the contract must state itSource: Cal. Bus. & Prof. Code §§ 7030, 7159(d)(1)
Written contract required	Above $500.00 — A home improvement contract must be in writing whenever the aggregate contract price of one or more improvement contracts, including all labor, services and materials, exceeds $500.Source: Cal. Bus. & Prof. Code § 7159(b)
Down payment cap	$1,000.00 or 10 percent of the contract price, whichever is less — The down payment on a home improvement contract may not exceed $1,000 or 10 percent of the contract price, whichever is less, and the contract must say so in the schedule-of-payments statement.Source: Cal. Bus. & Prof. Code § 7159(d)(8)
Required notices	CONTRACTORS STATE LICENSE BOARD; DOWN PAYMENT; MECHANICS LIEN WARNING; THREE-DAY RIGHT TO CANCELSource: Cal. Bus. & Prof. Code § 7030(a); § 7159(e)(5)
Right to cancel	3 business days — The owner may cancel a home improvement contract until midnight of the third business day after signing; the statutory notice and cancellation form must be part of the contract.Source: Cal. Bus. & Prof. Code § 7159(e)(6)
Lien notice in the contract	California requires the statutory mechanics lien warning inside the home improvement contract itself.Source: Cal. Bus. & Prof. Code § 7159(e)(4)

Rules current as of 2026-09-14. Statutes change; verify before relying on them.

How to use this Residential Construction Contract (Home Improvement) in California

In California the contract is regulated, not just recommended: A home improvement contract must be in writing whenever the aggregate contract price of one or more improvement contracts, including all labor, services and materials, exceeds $500. (Cal. Bus. & Prof. Code § 7159(b)) This template writes the scope, the dates, the price, the payment milestones and the change-order rule into one document and prints the notices your state requires around it.

Price the job in one of three ways. A fixed price puts the risk of overruns on the contractor and is what most homeowners should ask for. Cost plus a fee makes sense for open-ended renovation, but only with a not-to-exceed number and access to the books. Time and materials suits small repairs where nobody can scope the work in advance. Whatever you choose, the money at signing is capped: $1,000.00 or 10 percent of the contract price, whichever is less (Cal. Bus. & Prof. Code § 7159(d)(8)). Tie the rest to milestones a person can stand in the room and verify — never to a calendar.

Put the licence number on the contract: A home improvement contract must state the name, business address and license number of the contractor, and every contract must carry the CSLB notice in at least 10-point type (12-point for home improvement and service and repair contracts). (Cal. Bus. & Prof. Code §§ 7030, 7159(d)(1)) Ask for a certificate of general liability insurance and, where the contractor has employees, workers' compensation. An uninsured injury on your property is the one construction risk a homeowner cannot fix afterwards.

The contract has to carry the notices California prescribes — CONTRACTORS STATE LICENSE BOARD, DOWN PAYMENT, MECHANICS LIEN WARNING, THREE-DAY RIGHT TO CANCEL — and this template prints each of them. The owner's cancellation right is state law: The owner may cancel a home improvement contract until midnight of the third business day after signing; the statutory notice and cancellation form must be part of the contract. (Cal. Bus. & Prof. Code § 7159(e)(6)) Sign before any work begins, hand the owner a full copy the same day, and collect a lien waiver with every payment.

Frequently asked questions

Does California require a written home improvement contract?

Yes, above $500.00. A home improvement contract must be in writing whenever the aggregate contract price of one or more improvement contracts, including all labor, services and materials, exceeds $500. (Cal. Bus. & Prof. Code § 7159(b))

How big a down payment can a contractor ask for in California?

Yes. California limits the down payment to $1,000.00 or 10 percent of the contract price, whichever is less (Cal. Bus. & Prof. Code § 7159(d)(8)). Taking more is a licensing violation, and the owner can normally recover the excess.

Can I cancel a signed contract in California?

Yes. The owner may cancel a home improvement contract until midnight of the third business day after signing; the statutory notice and cancellation form must be part of the contract. (Cal. Bus. & Prof. Code § 7159(e)(6))

What notices must the contract itself contain in California?

These: CONTRACTORS STATE LICENSE BOARD (Cal. Bus. & Prof. Code § 7030(a); § 7159(e)(5)); DOWN PAYMENT (Cal. Bus. & Prof. Code § 7159(d)(8)(C)); MECHANICS LIEN WARNING (Cal. Bus. & Prof. Code § 7159(e)(4)); THREE-DAY RIGHT TO CANCEL (Cal. Bus. & Prof. Code § 7159(e)(6)). This template prints each of them, using the statutory wording where the statute prescribes the words.

Does the contractor's license number have to be on the contract?

Yes. A home improvement contract must state the name, business address and license number of the contractor, and every contract must carry the CSLB notice in at least 10-point type (12-point for home improvement and service and repair contracts). (Cal. Bus. & Prof. Code §§ 7030, 7159(d)(1)) A contract without it can expose the contractor to discipline and, in some states, make the contract hard to enforce.

Who pays if a subcontractor liens my house after I paid the contractor?

In most states the lien attaches to the house even though the owner paid, which is why this contract makes the contractor pay downstream and deliver a lien waiver with every payment. Collect the waivers before releasing each milestone, and keep the final payment until the last waiver is in hand.

Other names

home improvement contract
residential construction contract
remodeling contract
contractor agreement
general contractor contract
home remodeling agreement
renovation contract
construction agreement homeowner
home repair contract
builder contract

Other states

FormsByState provides self-help document templates and general information, not legal advice. We are not a law firm. For advice about your situation consult a licensed attorney in your state.