Running the Business · Part 3
Case: the deposit that became a citation
A plumber replaces a water heater and a pressure regulator for a retired customer, does excellent work, takes a $900 deposit on a $2,900 job because "that's what everyone does," and starts the same afternoon. The customer's daughter, who manages her mother's money, reads the contract that night, sees the 12-point boldface line that says the deposit may not exceed $1,000 or 10 percent, does the arithmetic, and files a complaint. The work was never the issue. This case walks the three violations that were on the paper before the first fitting was cut, what the investigator asked for, what the citation cost, and the version of the same afternoon that produced a happy customer and a clean license record.
What the full lesson covers
- The legal maximum deposit on a $2,900 contract was $290. The contractor took $900. The contract itself, in 12-point boldface, told the customer the rule.
- Starting work the afternoon of signing, without the section 1689.13 emergency waiver, ran through the customer's right to cancel, which was five business days because she was a senior citizen.
- The 7159.5 violation is a misdemeanor and a citation; the contract defects are cause for discipline; the customer's own contract is the evidence for both.
- The investigator did not ask about the quality of the heater. The investigator asked for the contract, the receipt, and the dates.
- The lawful version took the same afternoon and no more risk: a $290 deposit or none, payment on completion, and either a scheduled start after the cancellation window or a proper emergency waiver.
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More lessons in Contracts and Getting Paid
- 1The home improvement contract (B&P 7159): every required element, the exact notices, and the three-day right to cancel
- 2The deposit cap: $1,000 or 10 percent, whichever is less, and progress payments that cannot exceed the work. CSLB's most common citation
- 3Service and repair contracts (B&P 7159.10): when the short form applies, what it must say, and how a service call falls out of it
- 4Subcontracts with GCs: the twelve clauses to read, what to strike, and what to negotiate
- 5Change orders: written, signed, before the work. Every time. Why verbal ones end in CSLB complaints
- 6Mechanics liens I: the 20-day preliminary notice. Miss it, lose your rights
- 7Mechanics liens II: recording deadlines, the 90-day foreclosure clock, the four statutory release forms, stop payment notices, and payment bonds on public work
- 8Collections: demand letter, lien, small claims, attorney. When each is worth it, and the one thing that makes all of them impossible
- 9Taking payment: cards, ACH, checks, cash, financing partners, and getting every dollar into the right account
- 10Case: the job that went unpaid. Where the contractor lost lien rights and how to have kept them
- 11Case: the deposit that became a citationYou are here
- 12Case: the change order that was never written
- 13Template: the home improvement contract, with every B&P 7159 notice verbatim
- 14Template: the service and repair contract (B&P 7159.10), one page, with the notices verbatim
- 15Template: the change order, one page, signed before the work
- 16Template: the 20-day preliminary notice, with the proof-of-notice declaration
- 17Template: the four statutory lien waiver and release forms (Civil Code 8132 to 8138), verbatim
- 18Template: the demand letter, homeowner version and general contractor version
- 19Template: the subcontract review checklist. Twelve clauses, three boxes each