Signed in the Driveway. Maybe Not a Contract.
The contractor who shows up first after a wildfire is rarely the one a homeowner would have chosen. He arrives while the smoke is still visible, while the insurance adjuster has not called back, and while the only thing that seems to matter is getting something — anything — moving. People sign in driveways, in church parking lots, at evacuation centers, on the hood of a car.
California anticipated that. Two provisions of the Civil Code treat a contract signed in the first days after a declared disaster differently from every other construction contract in the state: one makes certain of those contracts void, and the other more than doubles the ordinary three-business-day window to walk away. Neither rule is well known. Both matter most in the weeks when a homeowner is least able to research them.
This article explains what those rules say, where they stop, and what other leverage California law gives an owner whose rebuild has gone wrong. It is written with Los Angeles and Ventura County owners in mind, but the statutes are statewide.
The Governor's January 7, 2025 proclamation of a state of emergency for Los Angeles and Ventura Counties remains in effect, as does a separate statewide wildfire-risk proclamation issued March 1, 2025. But the two Civil Code clocks below run from the date of the damage and the date of signature — not from the declaration — so for the January 2025 fires those particular windows closed long ago. They matter for the next fire.
Other rules here have no declaration trigger at all: the deposit limits, the written-contract requirements, the section 7031 unlicensed-contractor remedies and the license bond apply to any qualifying California home improvement contract, disaster or no disaster. Section 7028.16, discussed below, is the exception — it is declaration-triggered.
Is a rebuild contract signed right after a fire even enforceable in California?
Sometimes it is not. Civil Code section 1689.14(a) provides that a home solicitation contract or offer for the repair or restoration of residential premises, signed by the buyer on or after the date the disaster caused the damage but not later than midnight of the seventh business day after that date, is void — unless the buyer, or the buyer's agent or insurance representative, solicited the contract at the appropriate trade premises of the seller.
Void, not voidable. The contract has no force from the beginning.
Three qualifiers do the real work, and dropping any of them gets the answer wrong.
The three qualifiers in section 1689.14
- It must be a "home solicitation contract." Civil Code section 1689.5(a) defines that as a contract for goods or services of twenty-five dollars or more made somewhere other than the seller's appropriate trade premises. A contract negotiated and signed in the contractor's office is not a home solicitation contract, and section 1689.14 does not reach it.
- The seven-business-day clock runs from the damage, not from the signing. The window closes at midnight on the seventh business day after the date the disaster damaged the property. A contract signed on the ninth business day is outside section 1689.14 entirely, whatever else may be wrong with it.
- Who made the first move. The statute's exception turns on where the solicitation was directed, not where the paperwork ended up being signed.
That third point is often the contested question. Section 1689.14(a) provides that a covered contract is not void if solicited by the buyer or the buyer's agent or insurance representative regardless of where the contract is made, and it treats a telephone call from the buyer to the seller's business premises as buyer solicitation whether or not the call responds to an earlier approach. So a homeowner who calls a contractor and then signs at the kitchen table has a contract the statute does not void. A homeowner approached in a parking lot on day three, who signs on the spot, may not.
Section 1689.14(b) defines "disaster" as an earthquake, flood, fire, hurricane, riot, storm, tidal wave, or other similar sudden or catastrophic occurrence for which a state of emergency has been declared by the President of the United States or the Governor, or for which a local emergency has been declared by the executive officer or governing body of any city, county, or city and county. Without a declaration, the section does not apply.
An open question
The statute keys its window to the date of the damage and does not say the declaration must issue before the contract is signed. Declarations often follow the damage by days. No published decision addresses the point.
Section 1689.14 has stood in its current form since 1995.
How long do I have to cancel a wildfire repair contract?
Longer than the cancellation notice on a typical home improvement contract describes — and a compliant disaster repair contract should say so on its face.
The general rule for a home solicitation contract, under Civil Code section 1689.6(a)(1), is cancellation until midnight of the third business day after signing, or the fifth business day after signing where the buyer is a senior citizen.
But section 1689.6(c) provides a separate and longer right: for a home solicitation contract or offer for the repair or restoration of residential premises damaged by a disaster, one that was not void under section 1689.14, the buyer may cancel until midnight of the seventh business day after the buyer signs and dates the contract, unless section 1689.15 applies.
Section 1689.14's seven business days run from the damage. Section 1689.6(c)'s seven business days run from signature. They are different windows measured from different events, and a contract can fall inside one and outside the other.
The contract should reflect this. Business and Professions Code section 7159(e)(6) requires the familiar "Three-Day Right to Cancel" notice — except for contracts in specified categories, including one negotiated at the contractor's place of business — and section 7159(e)(7) requires a separate "Seven-Day Right to Cancel" notice on any contract written for the repair or restoration of residential premises damaged by a sudden or catastrophic event for which a state, federal, or local emergency has been declared. A disaster repair contract carrying only the three-day notice is not compliant — and in any event the printed notice cannot shorten the section 1689.6(c) right. The Contractors State License Board tells consumers the same thing in its disaster rebuilding guidance: in most cases, in a disaster area, you have up to seven business days to cancel without penalty.
Section 1689.15 is a narrow carve-out. It addresses service and repair projects meeting the requirements of Business and Professions Code section 7159.10 — a category section 7159.14(a) caps at $750 — and extinguishes cancellation rights once the buyer has a compliant signed contract and the licensee has in fact commenced the project. A full rebuild is not a service and repair contract, so section 1689.15 will rarely decide anything on a fire rebuild.
How much of a deposit can a contractor ask for after a disaster?
For a home improvement contract, Business and Professions Code section 7159.5(a)(3) is explicit: if a downpayment will be charged, it "shall not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever amount is less."
One thousand dollars is the ceiling on a home improvement contract of any size. Section 7159(b) defines that term as an agreement between a contractor and an owner or tenant for performing home improvement work where the aggregate contract price exceeds $500, and section 7159(d) requires the contract to be in writing and signed before work begins. Whether a ground-up reconstruction of a total-loss residence is a home improvement contract or instead new residential construction is a threshold question worth asking early, because the answer determines whether the deposit cap, the written-contract requirements and the bond beneficiary rules below apply at all.
A companion rule matters as much: under section 7159.5(a)(5), except for the downpayment, the contractor "shall neither request nor accept payment that exceeds the value of the work performed or material delivered." Payment follows work, not the other way around. Section 7159(d) separately requires the written contract to carry the contractor's name, address and license number, the contract price, a project description, the downpayment and progress payment terms, and approximate start and completion dates.
There is a real exception, and it is the one contractors cite. Section 7159.5(a)(8) exempts a contractor who furnishes a performance and payment bond, a lien and completion bond, or a bond equivalent or joint control approved by the registrar covering full performance and payment, from paragraphs (3), (4) and (5) — the downpayment cap, the progress payment schedule, and the payment-not-exceeding-value rule. Such a contractor may accept payment prior to completion. So a contractor asking for twenty-five percent up front on a $900,000 reconstruction is describing what would be a violation unless that exception applies. Ask whether an approved bond or joint control is actually in place, and ask for proof.
What if the contractor turns out to be unlicensed?
This is where California law gives a homeowner the strongest statutory leverage, and it is worth knowing before rather than after.
Business and Professions Code section 7031(a) bars an unlicensed contractor from bringing or maintaining any action to collect compensation for work requiring a license, regardless of the merits. Section 7031(b) goes further: a person who used the services of an unlicensed contractor "may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract."
In White v. Cridlebaugh (2009) 178 Cal.App.4th 506, the Court of Appeal held that "all compensation paid" means exactly that — unlicensed contractors are "required to return all compensation received without reductions or offsets for the value of material or services provided." In that case the owners both retained the completed work and recovered the compensation paid. Whether that outcome is available in a given case depends on the licensure facts and on the limitations period below. This is Court of Appeal authority; the California Supreme Court has not reviewed section 7031(b) disgorgement.
Two limits deserve equal billing.
The substantial compliance door is narrow
Section 7031(e) provides that the doctrine does not apply at all to a person who has never been duly licensed as a contractor in this state. For someone previously licensed, a court may find substantial compliance only if it is shown at an evidentiary hearing that the person:
- had been duly licensed as a contractor in this state prior to performance;
- acted reasonably and in good faith to maintain proper licensure; and
- acted promptly and in good faith to remedy the failure upon learning of it.
The elements are conjunctive. In American Building Innovation LP v. Balfour Beatty Construction, LLC (2024) 104 Cal.App.5th 954, the Court of Appeal found them unmet where the contractor had made repeated false declarations to the Board and waited nearly three years to resolve the insurance premium dispute underlying the coverage lapse that suspended its license. The California Supreme Court construed the neighboring provisions in MW Erectors, Inc. v. Niederhauser Ornamental and Metal Works Company, Inc. (2005) 36 Cal.4th 412, holding that section 7031(a) requires licensure at all times during performance though not at the moment of contracting, and that substantial compliance is unavailable to a contractor never licensed in California before performance began.
The deadline is short and unforgiving
In Eisenberg Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction Company, Inc. (2020) 53 Cal.App.5th 1201, the Court of Appeal held that a section 7031(b) disgorgement claim is governed by the one-year limitations period in Code of Civil Procedure section 340(a) for an action upon a statute for a penalty or forfeiture, that the claim accrues when the unlicensed contractor completes or ceases performance, and that "the discovery rule does not apply to section 7031(b) claims." A homeowner who learns two years later that the contractor was never licensed may have no disgorgement claim left. If there is any reason to doubt a license, check it now through the Contractors State License Board's public license lookup.
Our overview of California real estate litigation deadlines covers how these periods interact with contract and defect claims.
Separately, section 7028.16 makes unlicensed contracting a wobbler when it involves repairs or improvements to a structure damaged by a natural disaster for which the Governor has proclaimed a state of emergency under Government Code section 8625, or for which the President has declared an emergency or major disaster. It is punishable by a fine up to $10,000 or imprisonment for 16 months, two years or three years, or both; or by a fine up to $1,000 or up to a year in county jail, or both. The statute also provides that a person who used the unlicensed contractor's services "is a victim of crime regardless of whether that person had knowledge that the contractor was unlicensed," which matters for restitution.
Can a contractor raise the price because of the disaster?
Penal Code section 396(c) restricts it. For 180 days following the proclamation or declaration of the emergency, a contractor generally may not sell or offer to sell repair or reconstruction services, or services used in emergency cleanup, for more than 10 percent above the price charged immediately before the declaration. A local declaration can start a clock separate from a state or federal one. Section 396(g) allows the prohibition to be extended for additional periods. A violation is a misdemeanor punishable by up to one year in county jail, a fine of up to $10,000, or both.
The cap is not absolute, but the exception is narrower than it first appears. A higher price is permitted where the increase is directly attributable to additional costs the contractor itself incurred — supplier costs, labor — and even then the price may be no more than 10 percent above the contractor's cost plus the markup it customarily applied before the emergency. That documentation is the fight, and it is worth demanding in writing at the time rather than reconstructing it later.
What if the contractor takes the deposit and disappears?
Three routes, none complete on its own.
The license bond
Every licensee must maintain a contractor's bond of $25,000 under Business and Professions Code section 7071.6(a). Section 7071.5(a) makes a homeowner contracting for home improvement on the homeowner's personal family residence, damaged as a result of a violation of the Contractors License Law, a beneficiary of that bond, and the structure favors that homeowner: section 7071.6(b) caps the surety's aggregate liability on claims by other beneficiaries at $7,500, reserves the proceeds above $7,500 for section 7071.5(a) beneficiaries, and preserves their ability to claim the full measure of the bond.
But the bond is an aggregate, not a per-claim amount — section 7071.11(a) distributes an insufficient bond pro rata among all claimants, which against a contractor who abandoned twenty jobs at once means very little each. Section 7071.11(c) sets a two-year period for bond actions. Under paragraph (1) it runs from expiration of the license period during which the act or omission occurred, not from discovery; under paragraph (2), if the license was inactivated, canceled or revoked, the two years instead run from the date the license would have expired had that not happened. A contractor who takes deposits and disappears often falls into the second category. Identify that date early.
Board discipline
Section 7107 provides that "abandonment without legal excuse of any construction project or operation engaged in or undertaken by the licensee as a contractor constitutes a cause for disciplinary action," and section 7108 does the same for diversion of funds or property received for a specific project, or failure substantially to account for their use. Both are framed as grounds for discipline by the Contractors State License Board. They are not, on their face, private causes of action, and we are not aware of published California authority holding that they create one. A Board complaint is still worth filing — it can produce discipline and is a predicate for some bond claims — but it is not a substitute for a civil case.
The civil claim
Breach of contract remains the workhorse, often alongside claims for fraud or conversion depending on what happened to the money. If subcontractors or suppliers went unpaid while the general was paid, liens may already be recorded against a property that no longer has a house on it; our article on mechanics lien deadlines on a stalled project explains how those clocks run when work stops. Our contract disputes and construction defect claims pages describe how we approach these matters.
What changed for California rebuilds in 2025 and 2026?
Several recent statutes change the rebuild landscape. Their effective dates differ, one is not yet operative, and one was signed days before this article was written.
| Statute | Effective | What it reaches |
|---|---|---|
| AB 238 (Stats. 2025, ch. 128), as amended by AB 1847 (Stats. 2026, ch. 242) | Sept. 22, 2025; amendment approved and filed Sept. 15, 2026 | Forbearance a borrower may request on a loan secured by four or fewer residential units, on hardship due directly to the one wildfire disaster the statute names. AB 1847 adds an uninhabitability requirement. |
| SB 625 (Stats. 2025, ch. 548) | Jan. 1, 2026 | Deed, instrument and governing-document restrictions on substantially similar reconstruction after a disaster — void only where the rebuild meets the section 4752(c)(3) size, height and footprint conditions. Also architectural review deadlines. |
| AB 818 (Stats. 2025, ch. 534) | Jan. 1, 2026 | Permit decisions on a complete application for certain temporary replacement dwellings, where a disaster caused a declared local emergency. |
| AB 253 (Stats. 2025, ch. 487) | Oct. 10, 2025 | An applicant's option to retain a licensed third-party professional when an agency's plan check runs past 30 business days. Statewide, not disaster-only. |
| SB 676 (Stats. 2025, ch. 550) | Effective Jan. 1, 2026 — operative Jan. 1, 2027 | Shortened judicial review of qualifying wildfire recovery projects. It exempts nothing from CEQA, and it is not available yet. |
The table is a locator, not the rule. Each entry carries conditions and exceptions set out in the sections below.
Mortgage forbearance (AB 238, as amended by AB 1847)
AB 238 was an urgency statute effective September 22, 2025, adding the Mortgage Forbearance Act at Civil Code sections 3273.20 through 3273.30. A borrower on a residential mortgage loan secured by property improved by four or fewer residential units, who experiences a financial hardship due directly to the wildfire disaster identified in the statute — the January 7, 2025 Governor's proclamation and the January 8, 2025 federal declaration covering the Eaton and Palisades fires and straight-line winds (DR-4856-CA) — may request forbearance, and a covered servicer receiving a request meeting the statute's conditions is required to offer it. Forbearance runs in an initial period of up to 90 days, extended in 90-day increments only at the borrower's request. Under section 3273.23(g), no late fees may be assessed and no default rate of interest charged during forbearance.
AB 1847 narrowed who qualifies
AB 1847 (Stats. 2026, ch. 242), approved and filed September 15, 2026, extends the maximum forbearance from 12 months to 24, moves the request deadline from January 7, 2027 to January 7, 2029, and adds a requirement that the borrower affirm the property securing the loan is uninhabitable due to the wildfire disaster. That last change matters: a borrower whose home survived but whose income did not appears to have qualified under AB 238 as originally enacted and would not under the amendment.
HOA obstacles to rebuilding (SB 625)
Effective January 1, 2026. Civil Code section 4752 makes void and unenforceable any covenant, restriction or condition in a deed, contract, security instrument or other instrument, and any governing-document provision, that prohibits substantially similar reconstruction of a residential structure destroyed or damaged in a disaster — subject to conditions in section 4752(c)(3), among them an interior livable square footage no greater than 110 percent of what existed before the damage, a height no greater than either 110 percent of the prior height or 100 percent of what the governing documents allow (whichever is greater), and an exterior footprint that either matches the destroyed structure's location and exterior dimensions or keeps setbacks of at least four feet from the side and rear lot lines.
Under section 4752(b) a court must award reasonable attorney's fees to the owner of a separate interest in the development who prevails in an action to enforce the section. Section 4766 adds architectural review deadlines, all in calendar days: 30 days from receipt to rule on completeness (an application not acted on is deemed complete), 45 days from completeness to approve or return revision comments, and 60 days from a written appeal for a final determination.
Temporary structures and plan check (AB 818, AB 253)
AB 818, effective January 1, 2026, adds Government Code section 65946.1, which requires a local agency to approve or deny a complete application within 10 business days of receipt for a building permit for certain temporary replacement dwellings on residential property destroyed or rendered substandard by a disaster resulting in a declared local emergency.
AB 253 was an urgency statute effective October 10, 2025, adding Health and Safety Code section 17960.3. Where an agency's estimated review timeframe exceeds 30 business days, or no compliance determination issues within 30 business days of the application being deemed complete, an applicant may retain a licensed third-party professional and the agency must then act within 10 business days of that report. It is statewide, not limited to disaster areas, and section 17960.3(h) repeals it January 1, 2036.
Expedited CEQA litigation that is not yet available (SB 676)
Sometimes described as current law. It adds Public Resources Code section 21168.6.2, and although the statute took effect January 1, 2026, the operative provision applies only on and after January 1, 2027. It shortens judicial review of qualifying wildfire recovery projects; it does not exempt any project from CEQA, and as of the date of this article it is not available to any rebuild project.
The September 2026 package that carried AB 1847 was reported to include further wildfire measures on smoke-damage testing standards, a presumption about the origin of smoke damage in fire zones, and a broader statewide forbearance program. Chapter numbers and codified text for those other bills were not available when this article was written, so confirm them before relying on them.
What is still unsettled?
Two things should be said plainly.
Sections 1689.14 and 1689.6(c) are thinly interpreted. We located no published California appellate decision construing either the void-contract rule for disaster repair solicitations or the seven-business-day disaster cancellation right. That is unusual for statutes of this age and consequence, and it cuts both ways: there is no appellate gloss narrowing them, and none confirming how a court will apply the buyer-solicitation exception to, for example, a text message exchange or a referral from an insurance adjuster.
Whether a particular agreement is a "home solicitation contract," or a "home improvement contract," is fact-intensive. Where the first contact came from, who initiated it, where the signing occurred, and whether the work is a repair or a ground-up rebuild can each change the result. Preserve the evidence — call logs, texts, business cards, the photograph of the truck in the driveway — before memories and phones are replaced.
Common questions
Does the seven-business-day cancellation right apply to every contract I sign after a fire?
No. It applies to a home solicitation contract or offer for the repair or restoration of residential premises damaged by a disaster, under Civil Code section 1689.6(c), and only where the contract was not void under section 1689.14 and section 1689.15 does not apply. It runs until midnight of the seventh business day after you sign and date the contract, not from the date of the fire. A different seven-business-day period, in section 1689.14, is measured from the date the disaster caused the damage. If the contract was negotiated and signed at the contractor's own place of business, neither the seven-day nor the general three-business-day right in section 1689.6 may apply, though the contract remains subject to the other written-contract and notice requirements of Business and Professions Code section 7159.
Is my rebuild contract void just because I signed it a few days after the fire?
Not automatically. Under Civil Code section 1689.14(a), a home solicitation contract for repair or restoration signed within seven business days of the damage is void unless the buyer, the buyer's agent, or the buyer's insurance representative solicited it at the appropriate trade premises of the seller. If the buyer solicited it, the contract is not void regardless of where the contract is made, and the statute treats a telephone call you placed to the contractor's business premises as your solicitation. No published California decision has yet applied this exception, so the facts of the first contact matter.
How much can a contractor require as a down payment on a California home improvement contract?
Business and Professions Code section 7159.5(a)(3) limits the downpayment to one thousand dollars or 10 percent of the contract amount, whichever is less. A contractor who furnishes a performance and payment bond, a bond equivalent, or a joint control approved by the registrar is exempt from that limit under section 7159.5(a)(8). Whether a total-loss rebuild is a home improvement contract at all is a separate threshold question.
Can I get my money back if the contractor was not licensed?
Business and Professions Code section 7031(b) allows a person who used an unlicensed contractor to recover all compensation paid for work requiring a license, and in White v. Cridlebaugh (2009) 178 Cal.App.4th 506 the Court of Appeal held that recovery is not reduced or offset by the value of the work performed. That is Court of Appeal authority, and a contractor who was previously licensed may raise substantial compliance under section 7031(e). The deadline is short: Eisenberg Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction Company, Inc. (2020) 53 Cal.App.5th 1201 applied the one-year period in Code of Civil Procedure section 340(a), running from when the contractor completed or ceased performance, with no delayed discovery rule.
Can a contractor charge more than usual because of the disaster?
Penal Code section 396(c) generally prohibits a contractor from charging more than 10 percent above the pre-declaration price for repair or reconstruction services, or services used in emergency cleanup, for 180 days following the declaration, subject to extension under section 396(g). An increase directly attributable to additional costs the contractor incurred is permitted, but even then the price generally may not exceed 10 percent above the contractor's cost plus the markup it customarily applied before the emergency.
Talk to us
ROMO Law Group handles real estate and construction contract disputes throughout Southern California. If you are trying to work out whether a rebuild contract binds you, whether a deposit was lawfully taken, or what is left of a claim against a contractor who walked, we are glad to look at the documents.
This article is general information about California law as of September 2026 and is not legal advice. It does not create an attorney-client relationship. Statutes and case law change, and how they apply depends on the specific facts. Anyone facing a specific dispute should consult a lawyer about their own circumstances.
Related reading: our article on mechanics lien deadlines on a stalled project and our reference on California real estate litigation deadlines.
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