Free ADU Tool · California

ADU Payment Schedule Checker

If you pay a builder far ahead of the work and the project stalls, you risk losing that money. Enter the price and payment schedule from your contract, and see whether the down payment and each progress payment follow California's rules before you sign or pay.

CSLB, the state agency that licenses contractors, says building an ADU counts as home improvement, so a written contract and the down payment limit apply. In October 2026 it reported investigating more than 200 complaints across 18 California counties against one former ADU builder, alleging abandoned projects, unpaid subcontractors and payments made ahead of the work. CSLB ADU Fast Facts; CSLB news release #26-02

1. Contract price

Total price in the contract

The full contract amount, not counting finance charges.

2. Payment schedule

Add each payment the way the contract lists it: the amount, what it pays for, and when it comes due.

Payment 1
Amount
What it pays for
What the contract says (optional)
Payment 2
Amount
What it pays for
When it's due
What the contract says (optional)

The sample comes from CSLB's ADU Fast Facts. It replaces the rows above and needs a contract price first.

3. How the builder gets paid

Who pays the builder?

I pay the builder myself (cash, savings or a credit line I draw from)My lender pays the builder in draws as work is doneA lender or finance company pays the builder up front or in a lump sumThe builder arranged the loan or financingI'm not sure

Does the builder say it has a CSLB-approved bond or joint control?

No, or it hasn't come upYes, the builder says it has a CSLB-approved bond or joint controlNot sure

Your results

Enter the contract price to check the schedule.

Results show up here as you fill in the price and payments.

Nothing you type here is saved or sent. It stays on this page and clears when you leave.

General information, not legal advice. This tool explains California rules in plain English. It can't review your contract. For advice about your situation, talk to a California attorney or call the Contractors State License Board (CSLB) at 800-321-2752.

California only. The rules cited here are California law. Oregon, Washington and other states have their own rules, which this tool doesn't check.

The checker flags common warning signs. It can't tell whether a payment matches the work actually done on your site, so compare each payment with what you see before you pay.

California's payment rules for ADU contracts

Business and Professions Code section 7159.5 applies to home improvement contracts between an owner and a contractor. These are the parts that matter most when you're paying for an ADU:

Down payment. It can't be more than $1,000 or 10% of the contract amount, whichever is less (section 7159.5(a)(3)). CSLB adds that there are no exceptions for special-order materials.
A written schedule. If you'll pay before the job is finished, the contract has to list each payment in dollars and cents and say what work, services or materials it covers (section 7159.5(a)(4)).
No paying ahead of the work. Apart from the down payment, a contractor can't ask for or accept more than the value of work performed or material delivered (section 7159.5(a)(5)). The contract also has to say, in bold type: "It is against the law for a contractor to collect payment for work not yet completed, or for materials not yet delivered. However, a contractor may require a down payment."
Loans count too. The same limit "extends to advance payment in whole or in part from any lender or financier" (section 7159.5(a)(5)).
Lien releases. After each payment, the contractor has to get you a full, unconditional lien release for the work paid for if you ask, and you may hold back further payments until you have them (section 7159.5(a)(6)). Track them with the lien release checklist.
Penalties. Breaking the down payment rule or taking payment ahead of the work is a misdemeanor (section 7159.5(b)(1)), and CSLB can discipline the contractor.

Sources: Bus. & Prof. Code § 7159.5; CSLB Terms of Agreement; CSLB Bulletin #22-14.

Does this apply to my ADU?

Usually, yes. CSLB says building an ADU is a home improvement project under the Contractors State License Law. The law defines home improvement to include "adding to" residential property (section 7151), and section 7159.5 covers contracts with any contractor who is licensed or required to be.

The limits may not apply when:

The contractor has a performance and payment bond, lien and completion bond, or a bond equivalent or joint control approved by the CSLB registrar, covering full performance and payment. Section 7159.5(a)(8) lets those contractors take payment before completion. CSLB says these exceptions are noted on its website, so look up the license or call CSLB.
You aren't contracting with a contractor for the work, for example if you buy a factory-built unit straight from a manufacturer or dealer. Other rules may apply, so ask CSLB before paying a large deposit.
The property is outside California.

Sources: CSLB ADU Fast Facts; Bus. & Prof. Code §§ 7151, 7151.2; § 7159.5(a)(8); CSLB Terms of Agreement.

If a loan pays your builder

California's limit on payments ahead of work covers advance payments from a lender or financier, not just money you pay yourself. A loan that sends money to the builder before the work is done raises the same problem as paying it yourself. Safer setups release money in draws as work is finished, with an inspection first, or run it through a joint control: an independent company that holds the money and pays it out.

Before you sign a loan for your ADU

Find out who receives the loan money: you, the builder or a third party.
Ask whether money is released in draws as work is finished, and whether the lender inspects first.
Don't sign anything that sends the whole loan, or a large share of it, to the builder before work is done.
If the builder arranged the financing, read the loan papers yourself and keep a copy of everything you sign.
If a joint control is used, confirm it's approved by the CSLB registrar. The law says the contractor can't have any financial or other interest in it (section 7159.5(a)(8)).
Keep every draw request, receipt and lien release.

Source: Bus. & Prof. Code § 7159.5(a)(5) and (a)(8). Compare loan types in our ADU financing guide.

If your schedule fails the check

Ask the builder to fix the schedule in writing before you sign, or before the next payment.
Check the contractor's license with CSLB, including any bond on file.
If you've just signed, CSLB says you generally have three days to cancel (five if you're 65 or older, seven in disaster areas). That right doesn't apply if the contract was negotiated at the contractor's place of business.
If a contractor asked for or took more than the value of the work done or materials delivered, CSLB asks homeowners to file a complaint.

Sources: CSLB ADU Fast Facts; CSLB Terms of Agreement; CSLB upfront payment notice.

Frequently asked questions

How much can an ADU builder ask for as a down payment in California?

$1,000 or 10% of the contract price, whichever is less. On any contract of $10,000 or more, that means $1,000. The limit is in Business and Professions Code section 7159.5(a)(3), and CSLB says it applies to building an ADU. Contractors with a CSLB-approved bond or joint control covering full performance and payment are exempt.

Can my builder charge for plans and permits before construction starts?

Apart from the down payment, a contractor can't ask for or accept more than the value of work performed or material delivered. CSLB warns homeowners to be careful about paying for plans or permits before work starts. It suggests asking for an accounting of what the plans cost and confirming permit fees with your building department.

Does the down payment limit apply to prefab ADUs?

CSLB says building an ADU is a home improvement project and that homeowners should hire a licensed contractor to build or install one. CSLB doesn't carve out prefab units. If you buy a unit straight from a manufacturer or dealer rather than through a contractor, other rules may apply, so ask CSLB before paying a large deposit.

Does this checker work for Oregon or Washington?

No. It checks California law only. Oregon and Washington have their own contractor rules, which this tool doesn't cover.

Is anything I type saved or sent?

No. The checker runs in your browser. Nothing is stored or sent, and it clears when you leave the page.

Sources

Official California sources, checked October 26, 2026. Laws change, so follow the links for the current text.

Lien Release ChecklistCollect releases before every payment Inspection ChecklistWhat to check and photograph at each stage ADU Financing OptionsHELOCs, construction loans and more ADU Construction LoansHow draws are released during the build