Virginia home improvement contract requirements: what your contract must include, and how much deposit you can take

Published November 3, 2026 · Law checked November 3, 2026

• Free. The download links come by email.
• Deepsel is our product: free estimate, invoice and scheduling software for contractors (scheduling, quotes, invoicing, card payments). The section before the FAQ says where it fits and where it doesn't.
• Not legal advice. Have a Virginia attorney read the template before you use it.

Yes, Virginia requires a written contract for residential work. If you hold a Virginia contractor license, the Board for Contractors requires a legible written contract, signed by you and the homeowner before you start work or take any money, and its regulation lists eleven things that contract must contain.¹ There's no cap on the deposit. The contract only has to state the down payment as a specific amount, though the Board tells homeowners, in a statement you have to make them sign for, that about 10% down is normal, or about 30% when the job needs custom-made items.²

I put every required clause and notice into a free Virginia residential contract template. Get it three ways: make your own copy in Google Docs, download the Word version (.docx), or download the PDF. Pick a format, enter your email and I'll send the links.

This page is for contractors who just got their DPOR license. One contractor on Reddit put the problem well: "just googling a contract and hoping for the best won't get one that's written specifically for the state he works in" (r/Contractor). So here's Virginia's version, with the regulation's own words next to each clause.

Does Virginia's contract rule apply to you?

The rule is in the Board for Contractors regulations, 18VAC50-22-260(B)(8). It makes it a prohibited act for "all those who engage in residential contracting, excluding subcontractors to the contracting parties and those who engage in routine maintenance or service contracts" to work without "a legible written contract clearly specifying the terms and conditions of the work to be performed." Residential contracting means "construction, removal, repair, or improvements to single-family or multiple-family residential buildings, including accessory-use structures." And the timing: "Prior to commencement of work or acceptance of payments, the contract shall be signed by both the consumer and the licensee or the licensee's agent."¹

There's no dollar floor in the rule. It binds licensees, and you need a license for any job over $1,000: Class C up to $30,000, Class B from $30,000 to $150,000, and Class A from $150,000 up, thresholds that took effect July 1, 2025.³ Detached garages, sheds and other accessory structures count. So do apartment buildings.

Electricians, plumbers and HVAC contractors aren't in a separate system in Virginia. They hold the same contractor license from the same Board, with an ELE, PLB or HVA classification and a master tradesman on the license, so the contract rule reaches them exactly as it reaches a remodeler.^3,4 Here's what each license should do:

What a Virginia home improvement contract must include (DPOR's contract requirements)

The list is in 18VAC50-22-260(B)(9): a residential contract must contain "the following minimum requirements."¹ Eleven items, lettered a to k. Here they are in the regulation's words, with where each one sits in the template.

Pick the right price type

Item b is stricter than it looks. For a fixed-price job you state "the total cost of the project." For cost plus, the contract has to identify "the type of cost-plus contract, fee or percentage, and a cap that the total dollar amount cannot exceed," so an open-ended cost-plus job breaks the rule. For time and materials, the regulation asks for "a fixed price for labor that includes wages, overhead, general and administrative costs, and cost of materials."¹ In practice that means a stated labor rate with everything baked into it, materials at cost or cost plus a stated markup, and (my addition, not the regulation's) a not-to-exceed number so the customer knows the worst case.

The statement of protection is now on every contract

This one changed recently, and a lot of older Virginia templates still have it wrong. Until September 1, 2025, item h began "For contracts resulting from a door-to-door solicitation," so only door-to-door contracts needed the signed acknowledgment. The Board struck those words; the final rule says the change will "expand the requirement for a contractor to obtain the signed acknowledgment of receipt of department statement of protection."⁵ Now every residential contract needs it.

The statement is a two-page sheet from DPOR, revised in April 2025. It says it "may be reproduced but not altered," so the template reproduces it word for word as Appendix C.² Check DPOR's site for a newer version before each big job. Your customer will read the deposit numbers on it, which matters for the next section.

Three rules that sit around the contract

• Give the customer "a fully executed copy of the contract" before work starts (B)(10).
• Keep "a complete and legible copy of all documents relating to that contract, including the contract and any addenda or change orders" for five years (B)(11).
• Change orders must be written and "signed by both the consumer and the licensee or the licensee's agent" (B)(31). A text that says "go ahead with the extra outlet" isn't one.

One more worth knowing: stopping work for 30 days or more without a good reason is "abandonment" under (B)(14), and the Board treats it as a prohibited act.¹ That's why the delay clause in item e matters. It's your record that a stalled job was weather or a supplier, and not you walking away.

Virginia contractor deposit law: how much you can take and how to hold it

"Are you allowed legally to charge that much deposit?" is a question contractors ask a lot (r/GeneralContractor). In Virginia, legally, yes. I found no cap. The only deposit rule in the Board's regulations is item c: the contract must include "a specific statement on the amount of the down payment."¹ I checked the whole Board for Contractors chapter for "down payment," "deposit," "escrow" and "advance," the licensing statutes, the Home Solicitation Sales Act and the Consumer Protection Act, and none of them sets a limit.⁴

What Virginia does instead is tell your customer what to expect. The Statement of Consumer Protections, the sheet they now sign for, says: "The Board for Contractors recommends that the initial downpayment be about 10% of the total cost of the contract, unless the job requires custom made items, in which case the Board recommends a downpayment of about 30% of the total contracted cost."² DPOR's consumer guide goes further: "Consider an initial deposit of no more than 10% down or $1,000, whichever is less," and no more than 30% for custom-made items or special orders.⁶ A 50% ask isn't illegal. It just reads badly next to a page the state handed your customer.

When you can take it

Not before the contract is signed by both of you. The regulation says the contract is signed "prior to commencement of work or acceptance of payments."¹ If the customer signed at home, they can still cancel for three business days, and you return every payment within ten days if they do (more on that below).

How to hold it

Virginia doesn't require an escrow or trust account for homeowner deposits. It does tell you what the money is for. Under Va. Code 43-13, a contractor who, "with intent to defraud," uses money paid under a construction contract "for any other purpose than to pay persons performing labor upon or furnishing material" for that job, while those people are still owed, is guilty of larceny. Spending the job's money on something else before paying what the job owes is "prima facie evidence of intent to defraud."⁷ The Board's own list of prohibited acts includes "the retention or misapplication of funds paid, for which work is either not performed or performed only in part."¹

And there's a criminal rule for taking a deposit and not doing the job. Va. Code 18.2-200.1 treats as larceny an advance obtained "with fraudulent intent" on a promise to build or repair, where the contractor fails to perform and fails to return the advance "within fifteen days of a request to do so sent by certified mail."⁸ The fraud element is what turns a late job into a crime, but a certified letter from a customer asking for their deposit back is a letter to answer the same week.

The simple version: keep the job's money for the job. A separate bank account for customer deposits makes that easy to prove.

Setting the payment schedule

Tie every payment after the deposit to something the customer can see. A $24,000 bathroom remodel in the template's format:

For a kitchen with $14,000 of custom cabinets on a $48,000 contract, the Board's 30% guideline gives you $14,400 down, enough to order the cabinets without floating them. List those cabinets in Appendix A as custom so the customer can see why the number is higher. An HVAC replacement is usually stock equipment, not custom-made, so 10% down and the bulk of the price on install day fits the Board's numbers.

Cancellation: Virginia's three-day rule and the FTC Cooling-Off Rule

Two laws give a customer three days to back out, and both care about where the customer signed. Here's how they compare:

Here's the rule I'd follow. If the customer signs anywhere other than your shop or office, give them the cancellation notice and wait three business days before you start. Virginia's version has a sting: if you did work before a valid cancellation, "the seller is entitled to no compensation."¹² And until you hand over a compliant notice, the customer can cancel "in any manner and by any means," with no deadline running.¹¹ Lie about why you're at the door (say, a "free inspection" that's really a sales visit) and the window becomes 30 days.¹²

The FTC rule has a narrow exception for a repair visit the customer asked for, but only for "the buyer's personal property," and anything extra you sell on that visit is back in.¹⁰ Work on the house itself isn't clearly inside it. Virginia's "prior negotiations" exclusion is broader than the FTC's, but the FTC rule applies in Virginia anyway. So the notice goes in.

For a true emergency (a burst pipe, no heat in January), Appendix E of the template is a blank page for the customer to write the waiver in their own words. Don't pre-print it. The FTC wants it in the customer's handwriting.

Item g asks for "the cancellation rights of the parties," which is broader than the three-day right. So Section 8 also says when the customer can end the contract later (you don't fix a problem after written notice, or you stop work for 30 days) and when you can (they stop paying, or block access), and how the money is settled either way.

The Recovery Fund notice, liens and the new roofing rules

The Virginia Contractor Transaction Recovery Fund

Item k requires a statement that the fund exists, with contact details for claim information.¹ The fund is paid for by contractor assessments. A homeowner who wins a court judgment against a licensed contractor for "improper or dishonest conduct" on their residence, and can't collect, can claim up to $30,000 per transaction. "Mere breach of contract" doesn't qualify.¹³ The template's Section 15 names DPOR's Recovery Fund Office: 9960 Mayland Drive, Suite 400, Richmond, VA 23233, (804) 367-1559, RecoveryFund@dpor.virginia.gov.¹³

Mechanics' liens

Virginia doesn't require a lien notice in the homeowner contract. I found nothing in the regulation or the lien statutes that asks for one. The rules that matter to you come after the work.¹⁴

• A general contractor records a memorandum of lien no later than 90 days from the last day of the month in which you last worked, and no later than 90 days after the job is finished or stops. You also file a certificate that you mailed a copy to the owner. The memorandum can't include work more than 150 days before your last day on the job.
• If the building permit for a one- or two-family home names a mechanics' lien agent, notify that agent within 30 days of starting work, or your lien covers only work after the notice.
• You can't sign away your lien rights in the contract before you start. Such a clause is "null and void."
• No license, or the wrong class: no lien.

If a customer hasn't paid, the Virginia mechanics lien guide has the steps, every deadline and a demand letter.

Section 12 of the template tells the customer, in one plain sentence, that an unpaid contractor may record a lien.

Roofing contracts from January 1, 2027

Virginia's new Residential Property Owners Protection Act takes effect January 1, 2027.¹⁵ It bans paying, waiving or rebating an insurance deductible on an owner-occupied home, and it adds two things to every residential roofing contract. The first is a notice that you won't offer rebates, gifts or deductible help in exchange for a roof inspection or an insurance claim. Leave it out and the homeowner "may void the contract within 10 days after execution." The second is a fixed paragraph, in bold 14-point type on the owner's signature page, telling them to check with their insurer before signing. If the contract is signed within 180 days of a declared state of emergency covering the home, another 14-point paragraph lets the owner cancel within 10 days, or by the official start of work if that comes first. The template has all three, marked roofing only. Violations count under the Consumer Protection Act.

Arbitration and insurance

Neither is required in a Virginia residential contract. The template keeps disputes in the local courts and includes an optional insurance line, because customers ask. If you want an arbitration clause, have your attorney write it.

What happens if your contract is wrong

• License discipline. A missing item is a violation of the Board's regulations, and DPOR's statement lists "failure to include required elements within a contract" as an example.² The Board can fine you up to $2,500 per violation,¹⁶ and order remedial education, probation, suspension or revocation.
• Consumer Protection Act claims. A violation of the Home Solicitation Sales Act is a prohibited practice under the Virginia Consumer Protection Act. So is "any other deception, fraud, false pretense, false promise, or misrepresentation."¹⁷ The customer can sue for actual damages or $500, whichever is greater, up to three times actual damages or $1,000 if the violation was willful, plus attorney's fees.¹⁷
• Lost pay on a cancelled home sale. No notice, no deadline: the customer can cancel any time, and you're entitled to no compensation for work done before a valid cancellation.^11,12
• No license at all. Contracting without the license, or without the right class, is a Class 1 misdemeanor with fines of up to $500 a day. The contract "shall not be enforceable by the unlicensed contractor" unless you substantially performed in good faith and didn't know a license was required (a lapsed license counts against you on that point), and you lose your lien rights.^18,14
• Criminal exposure for the money: Va. Code 18.2-200.1 for an advance taken with fraudulent intent and not returned, and 43-13 for job funds spent elsewhere while the job's bills are unpaid.^8,7

I found nothing in the regulation that voids a licensed contractor's contract for a missing item. The penalty runs through your license and the customer's consumer-law claims, which is reason enough to get it right.

The free Virginia residential contract template

Plenty of new contractors start where one carpenter on Reddit did: "I got Chat GPT to write me up a contract template" (r/Carpentry). A generic template won't have the Recovery Fund notice, the signed acknowledgment of DPOR's statement, or a price section in the three shapes the regulation names. This one has every item from a to k, in the order a homeowner reads it:

• Page 1: your name, address, license number, class and specialties, the owner, the project address, and where the contract was signed.
• The work, start and estimated completion dates, the price with the three contract types, and a payment schedule with the down payment as a dollar amount and a percent (default 10%).
• The delay clause, change orders in writing signed by all parties, the permits assurance, cancellation rights of both sides, a workmanship warranty, insurance, the lien sentence, disputes, and the five-year records promise.
• The Recovery Fund statement and the DPOR acknowledgment, then the "BUYER'S RIGHT TO CANCEL" statement in bold immediately above the signatures, with the roofing paragraphs for roofers.
• Appendix A, specified materials. Appendix B, the Notice of Cancellation in two copies. Appendix C, DPOR's Statement of Consumer Protections. Appendix D, a change order. Appendix E, the handwritten emergency waiver page.

It's built for residential jobs. Commercial work for a business owner needs different paper. Copy it in Google Docs, or download the Word file or the PDF.

Where Deepsel fits

Deepsel is the field service software I build, and it handles the quote that comes before this contract. You write the quote with options (good, better, best), and a shop-wide terms text is copied onto every quote, so your Virginia clauses can sit there. The customer approves online and signs on screen, and you can set an optional deposit, as a percent or a fixed amount, that they pay by card when they approve; it's credited on the final invoice. On Pro, a Virginia contract written from this page is built in. Attach it to the estimate, and the customer reads it on the quote page, with the Recovery Fund notice, the cancellation forms and the DPOR statement, and signs it when they approve; your saved signature goes on when you send, and you both get the signed copy to print or save as PDF. Template, not legal advice. Have it reviewed for your business. Free covers 30 estimates and 30 invoices a month for your whole team, with scheduling and dispatch, quotes, invoicing, card payments, and customer and equipment records; Pro is $29 a month with unlimited estimates and invoices (pricing). What it won't do: Deepsel doesn't know Virginia law. The terms text alone won't add the Recovery Fund notice or the cancellation forms, and Deepsel won't stop you from setting a 50% deposit. Without the contract, paste the clauses into your terms and attach the DPOR statement; either way, the checking is still yours.

Frequently asked questions

Is it normal for a contractor to ask for 50% down in Virginia?

It's legal, because Virginia sets no cap on the down payment. It isn't what the state tells homeowners to expect. The DPOR Statement of Consumer Protections, which every residential customer now signs for, recommends about 10% of the total, or about 30% when the job needs custom-made items, and DPOR's consumer guide goes lower: 10% or $1,000, whichever is less. Ask for 50% and the homeowner will hold it up against that sheet. Ten percent down, with progress payments tied to finished milestones, gets signed faster.

At what contract amount does a contractor in Virginia need a license?

Over $1,000. Since July 1, 2025, a Class C license covers single jobs over $1,000 and under $30,000, Class B covers $30,000 up to $150,000, and Class A covers $150,000 and up. The classes also have yearly totals ($250,000 and $1 million). Electrical, plumbing and HVAC contractors also need a master tradesman on the license.

Does a handyman need a contractor's license in Virginia?

For any job over $1,000, yes. The threshold counts the value of the whole contract or project, so splitting one job into small invoices doesn't get under it. Working without the license is a Class 1 misdemeanor with fines of up to $500 a day, and the unlicensed contractor usually can't enforce the contract or file a mechanics' lien to get paid.

What are the new laws affecting contractors' contracts in Virginia?

Three recent ones. July 1, 2025: new license class thresholds ($1,000, $30,000 and $150,000). September 1, 2025: the signed acknowledgment of DPOR's Statement of Consumer Protections, once required only for door-to-door sales, is required on every residential contract. January 1, 2027: roofing contracts must carry two new notices about insurance claims and deductibles, and a roofing contract signed within 180 days of a declared state of emergency can be cancelled within 10 days, or by the start of work if that comes first.

What is the Virginia Contractor Transaction Recovery Fund?

A fund paid for by contractor assessments, not taxes. It can pay a homeowner who won a court judgment against a licensed contractor for improper or dishonest conduct on their home and can't collect it, up to $30,000 per claimant per transaction. A plain breach of contract doesn't qualify. Your contract has to tell customers the fund exists and how to contact the Board for claim information.

Do HVAC tune-ups and service calls need the full written contract?

Probably not. The written-contract rule excludes 'those who engage in routine maintenance or service contracts,' though the regulation doesn't define the phrase. A tune-up, a maintenance-plan visit or a routine service call likely fits. A system replacement, a new install or a remodel doesn't. When the job has a real price tag, use the full contract.

Sources

1. 18VAC50-22-260, Board for Contractors Regulations, "Filing of charges; prohibited acts," subsections B 8 (written contract; "residential contracting"; signed "prior to commencement of work or acceptance of payments"), B 9 a to k (minimum contract contents), B 10, B 11, B 14, B 16 and B 31. law.lis.virginia.gov, current through Virginia Register Vol. 41 Iss. 25 (eff. September 1, 2025), read November 3, 2026.
2. Department of Professional and Occupational Regulation, "Statement of Consumer Protections," revised 4/29/2025, effective 07/01/2025 - "The Board for Contractors recommends that the initial downpayment be about 10% of the total cost of the contract, unless the job requires custom made items, in which case the Board recommends a downpayment of about 30%"; lists "failure to include required elements within a contract" as a violation; "may be reproduced but not altered." dpor.virginia.gov, read November 3, 2026.
3. Code of Virginia § 54.1-1100, definitions of Class A, B and C contractors (thresholds of $1,000, $30,000 and $150,000; amended 2025, cc. 127, 133) and the master tradesman requirement for electrical, plumbing and HVAC contractors. law.lis.virginia.gov, read November 3, 2026. License required: § 54.1-1103(A), law.lis.virginia.gov.
4. 18VAC50-22, Board for Contractors Regulations, full chapter: definitions of the ELE, PLB, HVA, HIC, RBC and ROC classifications and specialties; searched for "down payment," "deposit," "escrow" and "advance" (the only down-payment rule is 18VAC50-22-260 B 9 c). law.lis.virginia.gov, read November 3, 2026.
5. Virginia Register of Regulations, Vol. 41 Iss. 25 (Final), 18VAC50-22, Board for Contractors Regulations, July 28, 2025 - the amendments "expand the requirement for a contractor to obtain the signed acknowledgment of receipt of department statement of protection"; struck "For contracts resulting from a door-to-door solicitation" from 260 B 9 h. register.dls.virginia.gov, read November 3, 2026.
6. DPOR, "Consumer Guide: Hiring A Contractor" - "Licensed contractors are required by law to provide a written contract for residential work, signed by both parties"; "Consider an initial deposit of no more than 10% down or $1,000, whichever is less. Unless the job requires custom-made items or special orders, in which case an initial down payment should be no more than 30% of the total value of the contract." dpor.virginia.gov, read November 3, 2026.
7. Code of Virginia § 43-13, "Funds paid to general contractor or subcontractor must be used to pay persons performing labor or furnishing material." law.lis.virginia.gov, read November 3, 2026.
8. Code of Virginia § 18.2-200.1, "Failure to perform promise for construction, etc., in return for advances." law.lis.virginia.gov, read November 3, 2026.
9. Virginia Home Solicitation Sales Act, Code of Virginia § 59.1-21.2 (definition of "home solicitation sale"; exclusions for cash sales under $25 and sales "made pursuant to prior negotiations between the parties") and § 59.1-21.3 (three business days; emergency exception; waivers otherwise void). 59.1-21.2, 59.1-21.3, read November 3, 2026.
10. FTC Cooling-Off Rule, 16 CFR 429.0 (definitions: $25 at the buyer's residence, $130 elsewhere; emergency and repair exclusions; business day) and 429.1 (the statement, the Notice of Cancellation in duplicate, oral notice, refund within 10 business days). 429.0, 429.1 (Cornell LII copy of the eCFR), read November 3, 2026.
11. Code of Virginia § 59.1-21.4, "Receipt or written agreement" - the "BUYER'S RIGHT TO CANCEL" statement in bold ten-point type, the notice of cancellation form, use of the federal form, and cancellation "in any manner and by any means" until the seller complies. law.lis.virginia.gov, read November 3, 2026.
12. Code of Virginia § 59.1-21.5 (refund within ten days), § 59.1-21.6 ("the seller is entitled to no compensation" for services performed before cancellation), § 59.1-21.7 (thirty days to cancel after a misrepresented solicitation) and § 59.1-21.7:1 (violations are prohibited practices under § 59.1-200). 59.1-21.5, 59.1-21.6, 59.1-21.7, 59.1-21.7:1, read November 3, 2026.
13. Virginia Contractor Transaction Recovery Act, Code of Virginia § 54.1-1118 ("improper or dishonest conduct" does not include "mere breach of contract"), § 54.1-1120 (claimant's residence; judgment required) and § 54.1-1123 ($30,000 per claimant per transaction). 54.1-1118, 54.1-1120, 54.1-1123; DPOR, "Contractor Transaction Recovery Fund" (Recovery Fund Office address, phone and email), dpor.virginia.gov. All read November 3, 2026.
14. Code of Virginia § 43-3 (lien for $150 or more; advance waivers by a general contractor "null and void"; no lien without a valid license or the proper class), § 43-4 (memorandum within 90 days from the last day of the month of last work; certification of mailing to the owner; 150-day look-back) and § 43-4.01 (mechanics' lien agent named on the building permit; 30-day notice). 43-3, 43-4, 43-4.01, read November 3, 2026.
15. Residential Property Owners Protection Act, Code of Virginia §§ 59.1-617 to 59.1-620 (2026, cc. 657, 658), effective January 1, 2027 - deductible rebates banned; the anti-rebate notice ("the residential property owner may void the contract within 10 days after execution"); the 14-point insurance statement; the 10-day emergency cancellation for roofing contracts; enforcement under the Consumer Protection Act. law.lis.virginia.gov, read November 3, 2026.
16. Code of Virginia § 54.1-202, monetary penalty "which shall not exceed $2,500 for each violation." law.lis.virginia.gov, read November 3, 2026.
17. Virginia Consumer Protection Act, Code of Virginia § 59.1-200 A 14, A 19 (Home Solicitation Sales Act) and A 46 (unlicensed contracting), version effective November 1, 2026; § 59.1-204 (actual damages or $500; treble or $1,000 if willful; attorney's fees). 59.1-200, 59.1-204, read November 3, 2026.
18. Code of Virginia § 54.1-1115, "Prohibited acts" - Class 1 misdemeanor; up to $500 per day; contract "shall not be enforceable by the unlicensed contractor" except for good-faith substantial performance without actual knowledge; failure to renew creates "a rebuttable presumption of actual knowledge." law.lis.virginia.gov, read November 3, 2026.