Your state decides how much deposit you can take on a roof. California caps it at $1,000 or 10% of the contract, whichever is less, while Florida and Massachusetts allow more under conditions and Texas regulates what you do with the money once you have it. Wherever you work, size the deposit to the material you have to order before the crew arrives, and tie every later payment to delivered material or finished work.
An owner on r/Roofing chasing a late invoice asked other owners: “Do you take deposits? If so, what percentage?” Below are four states’ rules and the federal cancellation rule. Elsewhere, look up your state’s home improvement contract law before you set a number.
California caps the deposit at $1,000 or 10%, whichever is less
Under Business and Professions Code §7159.5, the down payment on a home improvement contract can’t go above $1,000 or 10% of the contract amount, whichever is less. The contract has to be in writing and state the full price in dollars and cents.
After the down payment, you can’t ask for or accept money ahead of the work done or material delivered, including advance money from a lender. Each payment before completion needs a scheduled dollar amount tied to the work or materials it covers. After each payment the homeowner can ask for an unconditional lien release for the work paid for, and hold back the next payment until you hand it over.
Breaking these rules is a misdemeanor with a fine of $100 to $5,000, up to a year in county jail, or both, and it is cause for discipline against your license. If the job sits in an area under a governor’s state of emergency or a presidential disaster declaration, the court must impose the maximum fine, which matters for storm work.
A contractor who posts a bond covering the whole job, such as a performance and payment bond, is exempt from the cap and the draw rules. Without one, write the down payment as a dollar figure inside the cap and list each draw against a named stage of the job.
Florida allows more than 10% if permits and work start on time
Florida sets no cap on the deposit itself, and the rule in Florida Statutes §489.126 applies whether or not you hold a license.
A contractor who takes more than 10% of the price up front on residential work must apply for permits within 30 days and start work within 90 days after the permits issue. The exceptions are just cause or the homeowner’s written agreement to longer periods.
If you miss those dates, the homeowner can send a certified-mail demand to pull permits, start work or refund, and doing none of the three within 30 days lets a court infer you had no just cause.
A contractor holding more money than the work done also can’t let 90 days pass with no work, unless the contract sets another period. The penalty grows with the money involved. Below $1,000 it is a first-degree misdemeanor, and from there up to $20,000, where a typical roof deposit lands, it is a third-degree felony. Intent can be shown from when you spent the money as well as when you took it.
When a special-order roof will take longer than those deadlines, write the longer start date into the contract and have the homeowner sign it.
Massachusetts allows a third up front, or more for special-order materials
Massachusetts General Laws chapter 142A §2 caps a home improvement deposit at one-third of the contract price or the actual cost of special-order or custom materials that must be ordered early to keep the job on schedule, whichever is greater. The chapter covers residential contractors working on owner-occupied homes.
The contract must carry a payment schedule with each payment in dollars, and you can’t demand the final payment until the work is finished to both sides’ satisfaction. On a custom order, keep the supplier’s invoice in the job file, since that cost is what lets you take more than a third.
Texas treats the deposit as trust money for that job
Under the Texas Construction Trust Fund Act (Property Code chapter 162), payments on a contract to improve Texas property are trust funds, and the contractor who receives them is the trustee. On a written contract over $5,000 to improve a residential homestead, the money goes into a bank account whose statement calls it a “construction account.” Nearly every full replacement on an owner-occupied home clears that line.
You also keep a record of each deposit and payment out, a per-job record of costs charged to the owner, and the invoices behind them. Skipping the account or the record is a Class A misdemeanor on its own.
Knowingly spending trust money without first paying the job’s subs and suppliers is misapplication. At $500 or more it is a Class A misdemeanor, or a third-degree felony with intent to defraud. Using one job’s deposit to pay another job’s shingle bill is the pattern the law targets. Spending it on that job’s own costs is a defense.
Insurance jobs add two rules. Texas makes the homeowner pay the deductible, and a roofing contract of $1,000 or more paid from a claim must say so in 12-point bold. Promising to waive, absorb, rebate or credit the deductible without the insurer’s consent is a Class B misdemeanor, so a deposit sized to the deductible and quietly credited back later is exactly what the law bans. The receipt also matters to the homeowner, since an insurer may withhold recoverable depreciation until it sees proof the deductible was paid.
At the back end, the owner must hold back 10% of the price during the job and for 30 days after completion. Open a construction account for Texas residential deposits, and schedule your last payment for day 31.
A sale signed at the kitchen table can be cancelled for three business days
The FTC’s Cooling-Off Rule lets a buyer cancel a sale of $25 or more made at their home until midnight of the third business day, and you then have 10 business days to refund. The FTC has the rule up for review on its regulatory agenda. If you order materials on that deposit before the window closes and the homeowner cancels, you carry the cost.
Rep pay runs into the same window. One owner on r/RoofingSales pays reps their full commission when the deposit comes in, which means paying on money you may have to send back. California goes further and requires a salesperson’s commission to be paid in step with the payment schedule. Pay commission after the cancellation window closes, or split it across the draws. How to Pay Roofing Sales Reps: 10/50/50, Profit Splits and Draws covers the splits themselves.
A bigger deposit won’t collect the final payment
A Georgia roofer on r/Contractor wrote about an out-of-state owner: “He paid half of the cost as the deposit upfront.” He finished the roof, the owner refused to pay the rest, and he filed a mechanic’s lien. Another owner on r/Roofing took a deposit to order Grand Manor shingles ahead of a price increase, and the homeowner paid slowly until the supplier forced delivery.
The payment schedule and your lien rights collect the balance. In Texas, a lien on a homestead needs a written contract signed before any labor or material goes on, signed by both spouses if married and filed with the county clerk. Lien steps differ by state, so confirm yours with an attorney before a job depends on them. More on chasing late money is in Roofing Cash Flow: Depreciation Checks, Final Payments and Liens.
Put the deposit and every draw in the contract as dollar figures
Fill in your amounts and stages:
- Deposit at signing: $______ (within your state’s cap), covering [materials to be ordered, supplier, expected order date].
- Cancellation: Buyer may cancel until midnight of the third business day after signing. Deposit refunded within 10 business days of notice. No materials ordered before that window closes.
- Permits and start: Permit application by [date]. Work starts by [date]. (Florida, deposit over 10%: homeowner initials here to agree to longer periods.)
- Payment 2: $______ due on [delivery of named materials].
- Payment 3: $______ due on [named stage of work].
- Final payment: $______ due on completion. (Texas residential: 10% due 30 days after completion.)
- Insurance jobs: The homeowner is responsible for the deductible. The contractor will not waive, absorb, rebate or credit any part of it.
- Lien releases: Contractor provides an unconditional lien release for the work covered by each payment on request.
The rest of the contract is in Roofing Contract Template: The Clauses a Residential Roofing Contract Needs.
Check these before you take the next deposit
- Look up your state’s cap, and write the deposit as a dollar figure.
- Tie every later payment to delivered material or finished work.
- Order nothing until the three-day cancellation window closes.
- In Texas, put residential deposits in a construction account and record each payment out by job.
- On insurance work, never credit the deductible back.
A clean contract protects the jobs you sign; the next question is whether nearby homeowners find you on Google Maps. Open the free Google Maps heatmap, pick your Google profile and a search, and in a few minutes you’ll see your rank at 49 points around your office.