A home improvement contract covers project scope and materials, contractor licensing (state HIC registration required in many states), payment schedule with deposit caps (California: 10% or $1,000; other states vary), the 3-day right of rescission for door-to-door sales, written change orders, lien-waiver mechanics, permit responsibility, start/completion dates (required contract terms in several states), and workmanship warranty (1 year typical). Many states mandate specific contract language for home improvement work above dollar thresholds ($500 in California).
Home Improvement Contract Template
Reviewed by the Agiled editorial teamUpdated June 2026
Home improvement is the most regulated contract category most homeowners ever sign — and most never know it. A dozen-plus states mandate written contracts...
Part of our free contract template library — 75+ agreements in Word and PDF, ready to customize and sign.
Full template text
HOME IMPROVEMENT CONTRACT
Date: _______________
Project Address: _______________
PARTIES
This Home Improvement Contract ("Agreement") is entered into by and between:
Homeowner: _____________ ("Owner"), residing at _____________
Contractor: _____________ ("Contractor"), with a principal address of _____________, License No. _____________, insured under Policy No. _____________
CLAUSE 1 — DESCRIPTION OF WORK
The Contractor agrees to furnish all labor, materials, equipment, and supervision necessary to complete the following home improvement work at the Project Address ("Work"):
[Describe the complete scope of work here. Reference attached Exhibit A — Plans and Specifications for detailed drawings and material selections.]
The Work shall be performed in a professional, workmanlike manner in compliance with all applicable building codes and regulations.
CLAUSE 2 — CONTRACT PRICE
The total price for the Work is $_____________ ("Contract Price"). The Contract Price includes all labor, materials, permits, and fees except as otherwise noted in this Agreement.
CLAUSE 3 — PAYMENT SCHEDULE
Payments shall be made as follows:
- 10% ($___) upon execution of this Agreement
- 25% ($___) upon completion of demolition and rough framing
- 25% ($___) upon completion of mechanical rough-in (plumbing, electrical, HVAC)
- 25% ($___) upon completion of finish work (drywall, trim, paint, fixtures)
- 15% ($___) upon final completion and Owner acceptance
Payments are due within seven (7) days of the Contractor's written invoice for each milestone. Late payments accrue interest at 1.5% per month.
CLAUSE 4 — PROJECT SCHEDULE
Work shall commence on or about _____________ and shall be substantially complete on or before _____________. Delays caused by weather, material shortages, Owner-requested changes, or events beyond the Contractor's reasonable control shall extend the completion date proportionally.
CLAUSE 5 — CHANGE ORDERS
No changes to the Work, materials, price, or schedule shall be made without a written Change Order signed by both Parties. Each Change Order shall describe the modification, state the price adjustment (increase or decrease), and note any schedule impact. The Contractor shall not perform changed work without a signed Change Order.
CLAUSE 6 — MATERIALS AND SUBSTITUTIONS
All materials shall conform to the specifications in Exhibit A. If a specified material is unavailable, the Contractor shall propose a substitute of equal or greater quality for the Owner's written approval. No substitution shall be made without the Owner's consent.
CLAUSE 7 — PERMITS AND INSPECTIONS
The Contractor shall obtain all required building permits and schedule all inspections. Permit fees are included in the Contract Price unless otherwise stated. The Contractor shall provide the Owner with copies of all permits and inspection results upon request.
CLAUSE 8 — INSURANCE
The Contractor shall maintain general liability insurance ($1,000,000 per occurrence), workers' compensation insurance as required by law, and auto liability insurance. Certificates of insurance shall be provided to the Owner before Work begins. The Contractor shall indemnify and hold harmless the Owner from claims arising from the Contractor's performance of the Work.
CLAUSE 9 — WARRANTY
The Contractor warrants all workmanship for _____________ year(s) from the date of final completion. This warranty covers defects in labor and installation. It does not cover damage caused by the Owner, normal wear and tear, or acts of nature. Manufacturer warranties on materials and equipment shall be passed through to the Owner.
CLAUSE 10 — CLEANUP
The Contractor shall maintain the site in a clean and safe condition during the Work and shall remove all debris, tools, and surplus materials upon completion. The site shall be left in broom-clean condition.
CLAUSE 11 — OWNER RESPONSIBILITIES
The Owner shall provide access to the Project Address, available utilities, and timely decisions on selections and change-order requests. The Owner shall not direct subcontractors or interfere with the Contractor's scheduling.
CLAUSE 12 — DISPUTE RESOLUTION
Disputes shall first be submitted to non-binding mediation. If unresolved within thirty (30) days, either Party may pursue binding arbitration or litigation in the state where the Project Address is located. The prevailing Party shall recover reasonable attorney's fees.
CLAUSE 13 — TERMINATION
Either Party may terminate for cause upon fourteen (14) days' written notice if the other Party materially breaches and fails to cure within the notice period. The Owner may terminate for convenience upon written notice and shall compensate the Contractor for Work completed and materials ordered. Upon termination, the Contractor shall secure the site and remove equipment.
CLAUSE 14 — LIEN WAIVERS
The Contractor shall provide lien waivers from itself and all subcontractors with each progress payment. Final unconditional lien waivers shall be provided before the final payment is released.
CLAUSE 15 — RIGHT OF RESCISSION
The Owner may cancel this Agreement within three (3) business days of signing by providing written notice to the Contractor. Upon cancellation, the Contractor shall return all payments within ten (10) business days.
CLAUSE 16 — GOVERNING LAW AND ENTIRE AGREEMENT
This Agreement is governed by the laws of the State of _____________. This Agreement, including all exhibits and Change Orders, constitutes the entire agreement between the Parties. No oral agreements shall modify this Agreement. Amendments must be in writing and signed by both Parties.
SIGNATURES
Owner: ___________________________ Date: _______________
Printed Name: ___________________________
Contractor: ___________________________ Date: _______________
Printed Name and Title: ___________________________
Exhibit A — Plans, Specifications, and Material Selections
- Written contract
- Required above ~$500 in many states
- Deposit cap
- CA: 10% or $1,000, lesser
- Rescission
- 3 days, door-to-door sales
- Warranty
- 1 year workmanship typical
What your home improvement contract should cover
Scope and materials
The work described specifically — locations, materials by type and grade, what's removed and what's protected. 'Upgrade bathroom' is not a scope; 'remove and replace tub/shower unit with [model], retile surround in [tile], replace fixture set [series]' is.
License and registration
The contractor's state license or home-improvement registration number on the contract face — mandatory in most regulating states, and verifiable in two minutes on the state board's site. Unlicensed contractors in license states often can't enforce their contracts or lien the property at all.
Price and payment schedule
Total price, deposit within the state cap, progress payments tied to work milestones (never dates), and final payment on completion. Several states bar payments that exceed the value of work performed — the schedule should visibly track work in place.
Start and completion dates
Approximate start and completion dates are required contract terms in several states (and good practice everywhere), with the standard extensions: weather, change orders, owner delay, concealed conditions.
Right of rescission
The federal 3-business-day cooling-off right for sales made at the home, with the required notice form attached — and longer windows in some states for specific categories (storm repairs, seniors). The clause isn't optional; omitting it extends the cancellation window indefinitely.
Change orders in writing
Scope changes priced and signed before execution. In several states, oral change orders for home improvement are unenforceable by statute — the paper isn't formality, it's the only version that counts.
Permits and code compliance
Contractor obtains permits for work requiring them — and a contractor who asks the homeowner to pull an owner-builder permit is usually evading licensing or insurance problems. Work performed to current code, inspections passed before cover-up.
Insurance
General liability and workers' comp stated with limits, certificates on request. A contractor without workers' comp makes the homeowner the deep pocket when a worker is injured on their property.
Lien rights and waivers
The statutory lien-rights notice where required, conditional waivers with progress payments, and final waivers (contractor and subs/suppliers) with final payment. The homeowner's defense against the unpaid-supplier lien.
Warranty and cleanup
One year workmanship minimum, manufacturer warranties passed through, debris removed and the site broom-clean daily and at completion — with disposal (dumpster, hauling) priced in the contract rather than discovered on the lawn.
Home improvement contract requirements (selected states, 2026)
| Item | Common requirement | Notes |
|---|---|---|
| Written contract threshold | $500 (CA) – $1,000+ | Varies by state |
| Deposit cap | CA: 10% / $1,000 | NV, MD, others vary |
| License number on contract | Required | Most regulating states |
| Rescission window | 3 business days | Door-to-door / home solicitation |
| Start/completion dates | Required terms | Several states |
| Progress payment rule | ≤ value of work done | CA and others |
| Workmanship warranty | 1 year typical | Some states mandate minimums |
Home improvement contract law is state-specific and prescriptive — required clauses, font sizes, and notice forms differ. Check your state contractor board's model contract; this template covers the common structure.
How home improvement contracts work in practice
The door-to-door sale
The crew 'working in the neighborhood' with leftover materials: the highest-risk purchase channel in home improvement, and the one the law regulates hardest. The rescission right exists precisely for this — three business days to cancel, with the notice form the seller must provide (omitting it extends the right indefinitely). The homeowner's checklist before signing anything at the door: license verified on the state board site, local address and references confirmed, no substantial cash deposit, and a night's sleep between pitch and signature. Legitimate contractors survive all four tests without flinching.
The mid-size project with progress payments
A $20,000 window replacement or siding job: big enough for progress payments, small enough that nobody involves lawyers. The structure that keeps it honest: deposit at the state cap, a payment at material delivery (materials on site, verifiable), a payment at substantial completion, and a 10% holdback for the punch list. Each payment against a one-page invoice describing work in place — which several states require anyway. The homeowner who pays ahead of the work has converted their contractor into an unsecured borrower; the schedule exists so that never happens.
The unlicensed bid that's 30% cheaper
The discount has contents: no license bond, no workers' comp (the homeowner's homeowner's-insurance problem when someone falls), no permit (the home-sale problem in five years), and — in strict-license states like California — no enforceable contract and exposure to disgorgement (unlicensed contractors can be made to refund everything paid, but the work they did badly is still in the walls). The license check takes two minutes on the state board site and is the single highest-value diligence act in home improvement. The 30% was never a discount; it was the price of the protections removed.
Mistakes that weaken a home improvement contract
Skipping the license check
Two minutes on the state board site verifies license, bond, and complaint history. Hiring unlicensed in a license state forfeits board recourse, the bond, and often any insurance response.
Large cash deposits
Deposit caps exist because prepayment is where homeowners get hurt. Pay the capped deposit by card or check, then pay only for work in place — never ahead of it.
No dates in the contract
A contract without start and completion dates can't be late. Approximate dates with the standard extensions are required in several states and meaningful everywhere.
Verbal everything
Oral scope, oral changes, oral warranty — none of it survives a dispute, and in some states oral change orders are void by statute. The writing requirement protects whoever insists on it.
Final payment before punch-out
The contractor's motivation to return for the sticking door leaves with the last check. Hold 10% to a written punch list's completion — the industry's standard, because it works.
How to use this template
- 01
Download the home improvement contract template in Word or PDF.
- 02
Verify the contractor's license on your state board site; put the number in the contract.
- 03
Define scope and materials specifically, with start and completion dates.
- 04
Set the payment schedule: capped deposit, milestone payments, 10% holdback.
- 05
Attach the rescission notice and set change orders to writing-only.
- 06
Add permits, insurance, lien waivers, and warranty terms, then sign.
Skip this template if…
- Whole-home builds — a residential construction contract with draw schedules and builder's-risk terms governs ground-up work.
- Emergency mitigation (water, fire) — restoration work runs on insurance-coordinated mitigation authorizations with their own regulatory regime.
FAQs
When is a written contract required for home improvement?
In many states, above surprisingly low thresholds — $500 in California, with a dozen-plus states requiring written home improvement contracts with prescribed clauses, license numbers, and notice forms. Even where not mandated, the written contract is what preserves lien rights for contractors and board recourse for homeowners.
How much deposit can a contractor ask for?
Less than most ask: California caps it at 10% or $1,000 (whichever is less), Nevada and Maryland cap by formula, and several states bar payments exceeding the value of work performed. Where no cap applies, 10–33% is customary — and substantial prepayment is the most reliable predictor of home-improvement loss.
What is the 3-day right of rescission?
A federal cooling-off rule: contracts signed at your home (door-to-door solicitation) can be cancelled within three business days, and the contractor must provide the cancellation notice form — omitting it extends the right indefinitely. Some states extend the window for storm-repair contracts and senior homeowners. It exists because the doorstep is where pressure works best.
Should I check a contractor's license?
Always — it's a two-minute search on the state contractor board site showing license status, bond, classifications, and complaint history. In license states, unlicensed contractors often can't enforce contracts or record liens, carry no bond, and trigger no insurance — and homeowners can be liable when uninsured workers are injured on their property.
How should home improvement payments be scheduled?
Capped deposit, progress payments tied to verifiable work milestones (never calendar dates), and a 10% holdback released when the written punch list is complete. Several states legally require payments not to exceed work performed. Exchange lien waivers with each payment on larger jobs — they're the proof subs and suppliers were paid.
What warranty should home improvement work carry?
One year on workmanship is the floor; some states mandate minimums and some trades customarily give more (roofing workmanship 2–10 years). Manufacturer warranties on products pass through separately and may need registration. Get both in writing with the procedure for warranty calls — the paper is what makes year-eleven-month callbacks happen.
Pair it with the contractor invoice template
The contract sets the terms — the invoice collects on them. Free download with the right line items pre-filled.
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