Remodeling contracts, deposits and your right to cancel

If a remodeler signs you up at your home, the FTC's Cooling-Off Rule lets you cancel a job of $25 or more until midnight of the third business day after the sale.¹ The rule also covers a sale of $130 or more at a seller's temporary location such as a hotel, convention center or fairground.¹ Saturday counts as a business day, but Sundays and federal holidays don't.²

Some states give you a right to cancel any home improvement contract, wherever you sign it:

• Connecticut: if you sign a home improvement contract with a remodeler, you can cancel until midnight of the third business day after the sale. That holds wherever you sign it, because the state counts every home improvement contract as a home solicitation sale.^3-4
• New York: if a remodeler signs you up for home improvement work, you can cancel the contract within three business days after signing. The only exception is an emergency you called the remodeler for, when you've signed a waiver.^5-6
• Pennsylvania: if a remodeler signs you up for home improvement work, you have three business days to cancel the contract, wherever you signed it.⁷
• New Jersey: if you sign a home improvement contract with a remodeler, you can cancel it for any reason until midnight of the third business day after you receive a copy, wherever you signed it. The remodeler must refund everything you paid within 30 days of getting your cancellation notice.⁸
• Indiana: if you sign a home improvement contract over $150 with a remodeler, you can cancel until midnight of the third business day after signing, or after your insurer's final decision on the claim if insurance is involved, whichever is later. The remodeler must return your payments within 10 days, keeping only the reasonable value of emergency work you approved in writing.⁹

Some states give more time, or more time to certain buyers:

• Alaska: if a remodeler who solicited you in person or by phone signs you up at your home, a general sales law gives you five business days to cancel a job of $10 or more. It covers any purchase you agree to somewhere other than the seller's place of business.¹⁰
• California: if a remodeler signs you up at your home, you can cancel within three business days, or five if you're a senior citizen, unless you negotiated the contract at the contractor's place of business. For repairs of damage from a declared disaster, you have seven business days.^11-13
• Illinois: if you're 65 or older and a remodeler you didn't invite signs you up at your home, you can cancel within 15 full business days after signing.¹⁴
• North Dakota: if a remodeler signs you up in person at your home, you can cancel a job of $25 or more until midnight of the third business day after you sign. If you're 65 or older, you can cancel a purchase over $50 until midnight of the 15th business day, unless the remodeler's agreement instead promises a full refund for at least 30 days.¹⁵

In these states the home solicitation law covers sales on credit, and the federal rule covers cash sales of $25 or more.¹ In each, you can cancel until midnight of the third business day after signing:

• Alabama: a credit sale under the state's home solicitation law, and a cash sale of $25 or more under the federal rule; the state law counts three business days.^{1, 16-17}
• Colorado: a credit sale under the state law, or a cash sale of $25 or more under the federal rule.^18-20
• Missouri: a credit sale under the state law, or a cash sale of $25 or more under the federal rule.^20-24
• Oklahoma: a credit sale, and the remodeler may keep a cancellation fee of up to 5% of the cash price, never more than the down payment. The state's rule covers only credit sales,^25-26 and a cash sale falls under the federal three-day rule.¹
• South Carolina: a sale on credit, including by credit card or through a lender tied to the sale.^27-28
• Utah: a credit sale solicited face to face at your home or at work, and the remodeler must refund everything. The state's law applies only to those sales,²⁹ and cash sales fall under the federal three-day rule.¹
• West Virginia: a credit sale over $25, solicited away from the seller's fixed place of business,^30-33 and cash sales fall under the federal three-day rule.¹
• Idaho: a job of $25 or more under the state's consumer protection rules, even if you invited the remodeler, and a credit sale solicited at your home under the credit code.^34-36

Some states add time to cancel when work would be paid from an insurance claim:

• Kentucky: if the work will be paid from a property insurance claim, you can cancel until midnight of the fifth business day after your insurer tells you in writing that all or part of the claim isn't covered.^37-41
• Georgia: after a natural disaster the Governor declares, you can cancel a repair contract signed within a year of the disaster until midnight of the fifth business day after your insurer tells you in writing that all or part of the claim isn't covered.^{20, 42-45}

Some states' contractor laws add no right to cancel of their own, so the federal rule is the one that applies when a remodeler signs you up at your home. Maine's home construction contract law is one,^46-47 and so are Ohio's home construction service law⁴⁸ and Washington's contractor disclosure law.⁴⁹ Oregon's contractor law adds a shorter one: if you sign your first written residential contract with a remodeler, you can cancel until midnight at the end of the next business day, unless you both agreed work would start sooner or it has substantially begun.⁵⁰

These are examples from the states whose rules we've read on an official page. Other states' rules aren't in this guide yet, and that doesn't mean they have none. Each state's rules page on this site, such as California's, New York's, Pennsylvania's and Ohio's, says what we've found. Find yours from the home page.

If you decide to cancel, do it in writing before the deadline, follow any steps the contract or the cancellation form gives, and keep a copy and proof of when you sent it. In some states the seller has to give you the forms. In North Carolina, for example, a seller making a sale of $25 or more at your home, or anywhere other than its place of business, must give you a completed contract or receipt that states your right to cancel and two cancellation forms, and tell you about the right out loud.^51-52

Some states require a written contract above a dollar amount, and list what it has to say:

• Connecticut: a home improvement contract for work over $200 isn't valid or enforceable against you unless it's in writing and signed by both of you, with the entire agreement, the date, the contractor's name, address and registration number, a notice of your right to cancel, and start and completion dates. Changes must be in writing and signed too.³
• California: a home improvement contract over $500 must be written and legible, with the contractor's license number, a description of the work and materials, a payment schedule, start and completion dates, and notices of your right to cancel.^11-13
• New York: a home improvement contract over $500 must be written and signed, with the contractor's details, the dates, the work and materials, and notices about liens, deposits and canceling.^5-6
• Pennsylvania: a home improvement contract for work over $500 can be enforced only if it's written and signed, with the contractor's registration number, the dates, the work, materials and specifications, the price, the down payment, any subcontractors, insurance and a notice of your right to cancel.⁷
• Massachusetts: a contract over $1,000 must be written, with the parties, the contractor's registration number on the first page, start and completion dates, a detailed description of the work and materials, the price, a payment schedule, signatures and the notices the law requires.^53-54
• Arizona: a contract over $1,000 must be in writing and state the contractor's name, license number and address, the owner and job address, the dates, a description of the work, the total price with taxes, any deposit and progress payments, and the notice about complaints to the Registrar of Contractors.^55-56
• Maine: a home construction contract over $3,000 must be written and signed, with the parties, the location, the dates, the total price, how you'll pay, a description of the work, a warranty the law sets, and clauses on resolving disputes and on change orders.^46-47

Other states don't require a written contract for every job. Florida doesn't require one for residential work, but a contract for residential repair, improvement or construction over $2,500 must include the Homeowners' Construction Recovery Fund statement and the construction lien law notice, signed and dated by the owner.^57-59 Alaska's contractor registration law doesn't require one either.^{10, 60}

Wherever you live, you can ask for the whole job in writing before you sign or pay anything.

Some states limit how much a contractor can take before the work starts:

Other states set rules without a fixed limit:

• Florida: there's no cap, but a contractor that takes more than 10% up front on residential work must apply for permits within 30 days and start work within 90 days after the permits are issued.^{59, 66}
• New York: there's no set amount, but payments made before the work is finished must be held in trust or escrow, or the contractor must post a bond or letter of credit.^5-6
• Oregon: there's no cap, but a contractor who takes a deposit of more than 50% of the price on a home improvement and then fails to do the work can be put on probation.⁵⁰
• Kentucky: there's no general limit, but for work paid from a property insurance claim, the contractor can't require any payment in advance until your five business days to cancel have run out.^{40, 67}
• Arizona: there's no general limit, but on a storm damage repair contract tied to an insurance claim, the down payment can't be more than 50% of the contract.^55-56

Some states' contractor laws set no deposit limit at all, such as Connecticut's Home Improvement Act³ and Illinois's Home Repair and Remodeling Act.¹⁴ Where there's no limit, the amount is whatever you agree to, so ask how much the contractor wants up front and when the rest is due, and put that payment schedule in the contract.

Whatever your state requires, you can ask for a contract that says:

• The contractor's legal name, address and phone, and the license or registration number. The verify guide shows where to check it.
• The work, room by room, and the materials, by brand and model where there is one.
• The total price, the deposit, and what each later payment is for and when it's due.
• The start and finish dates, and what happens if they slip.
• Who gets any permit. The permit guide covers what some state rules say.
• That any change to the work or the price will be written and signed by both of you before it's done.
• Your right to cancel, and how to use it.

Keep a signed copy of the contract and every change. If you're still pricing the job, the cost guides for kitchens, cabinets and countertops, bathrooms and tub-to-shower conversions show published ranges, and the timeline guide covers how long a remodel takes.

When you're ready, you can ask for quotes from remodelers near you.