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In California, the state limits advance payment at the time of contract signing to 10% of the total estimated job cost or $1,000, whichever amount is lower! All payments thereafter are supposed to be made for work performed or for materials delivered to the job site.
Avoid Paying Builders up Front This is fair but it's better to eliminate any risk by purchasing it yourself. If goods are made bespoke to order, such as a timber frame, then it's reasonable for the manufacturer to ask for a large payment upfront.
A Responsible Managing Officer (RMO) under California law is an individual who is a bona fide employee of the applicant for a contractor's license, and is actively engaged in the classification of work for which that responsible managing employee is the qualifying person on behalf of the applicant. California
RMO Rules: An Overview of Responsible Managing Officers of California Construction Companies. Businesses and individuals in the construction industry require a license when engaging in projects where the total cost in labor and materials is $500 or more.
Stage payments are a part of having building work done and a figure of 30 -40% in advance of work is to be expected and fully justified.
Under California law, a contractor can require a down payment of $1,000 or 10 percent of the total cost, excluding finance charges, whichever is less.
As the homeowner who is commissioning the project, it's reasonable to withhold at least 10% as your final payment. Avoid paying in full upfront, and definitely avoid paying anything before the contractor has evaluated the project in person.
According to the CSLB website, to qualify to receive a Contractor's License, you must be at least 18 years old and have the necessary construction business management experience (including experience in field supervision) or be mentored by an existing RMO.
Contractors cannot ask for a deposit of more than 10 percent of the total cost of the job or $1,000, whichever is less. (This applies to any home improvement project, including swimming pools.) Stick to your schedule of payments and don't let payments get ahead of the completed work.
Data source tooltip for average base salary. The average salary for a general contractor is $33.09 per hour in California and $14,062 overtime per year.