Where is my deposit supposed to sit in New York State?

Answers (1)

1. LE

   LokalMatch EditorialLokalMatch editorial

   Answered September 24, 2026

   In escrow, unless the contract said otherwise and you agreed to it. New York requires the home improvement contract to tell you that the contractor is legally required to deposit all payments received before completion in accordance with subdivision four of section 71-a of the Lien Law — which is the escrow provision.

   The contract itself has to be in writing and signed by all the parties, and it applies once the aggregate price for labor, services and materials exceeds five hundred dollars. That catches almost every job worth arguing about.

   Inside that writing there must also be a schedule of progress payments showing each payment as a sum in dollars and cents, and identifying the stage of completion it corresponds to. Not percentages against a vague milestone. A figure, and the state of the work it buys.

   And the contract must tell you that you may cancel until midnight of the third business day after the day you signed. If none of those things appear in what you were handed, you are not looking at a compliant New York home improvement contract, and that is worth raising in writing before the next payment leaves your account.

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Sources

Where the facts on this page come from.

1. 1

   General Business Law section 771: Contract provisions — New York State Senate (accessed September 24, 2026)

2. 2

   General Business Law section 770: Definitions — New York State Senate (accessed September 24, 2026)