If you are asked to make a down payment or deposit when contracting for home improvements, that could be a bad sign. By California Law, it is illegal for a contractor to accept more than $1,000 or 10%, whichever is less. Chances are, a company or individual who asks for money up front, is not well established and most likely someone you don't want to do business with because it is too risky.
After over 32 years of contracting in construction and home improvements, I am still surprised to hear of smart people who write large checks to contractors before any goods or services are provided. Very often, it is a sign of an unethical contractor who could leave you you high and dry.
Some of the issues to be concerned with are:
- Lack of proper insurances
- Shoddy workmanship
- Damage to your home or personal belongings
- Trades and vendors not being paid
- Mechanics liens filed on your property
- Non code compliant work
- No permits or inspections
- Abandonment of your project
There are plenty of reputable home improvement professionals to choose from who have integrity and you can trust. Home remodeling is to large of an investment to take a financial risk. I suggest ruling out any firm that gives you the bad sign of asking for a deposit.
For more information about California Contractor laws, visit www.cslb.ca.gov/Consumers/HireAContractor/ContractsAndBindingAgreements.asp or www.bbb.org/sandiego/news-events/lists/home-improvement-and-living-tips/
Before you sign a contract, always ask for references and check out online customer reviews.