New York's rules for home improvement contracts and deposits
Updated October 30, 2026 · 2-minute read · Old House Sewer Lines
New York requires a written home improvement contract for any job over $500, with a notice of your right to cancel within three business days and protection for your deposit. In Westchester the county goes further and says every project should be in writing and signed by all parties. A sewer repair by a home improvement contractor falls under these rules.
The Attorney General's office spells out the state requirement: consumers must receive a written contract for home improvement work that exceeds $500 (NY AG, Contractors and home maintenance). Westchester's Department of Consumer Protection says all contracts must be in writing for all projects (Choosing a Home Improvement Contractor). Treat the county standard as the working rule here, since a small sewer call can grow once the line is opened.
The three-day right to cancel
The contract must include a consumer notice, in bold print, that you have an unconditional right to cancel until midnight of the third business day after signing. That right can be waived in writing during an emergency, the Attorney General says. A basement filling with sewage is the kind of situation where a contractor may hand you a waiver; read it before signing, and keep a copy. For what to do in the first hours of a backup, see sewage backup in the basement.
Where the deposit goes
Money you pay before the work is finished is protected by statute. Under the state's home improvement law, the contractor must place it in an escrow account at a bank located in New York State within five business days, and tell you where it is held within ten business days. The alternative is a bond posted within ten business days (NY Attorney General). The contract itself must say which option applies.
Westchester adds advice on size and form. The county warns against contractors who demand cash or want more than one-third of the total before work begins. That one-third figure is county guidance, not a statutory cap, but it gives you a clear ceiling to hold any bidder to.
| Rule | Detail | Source |
|---|---|---|
| Written contract | Required over $500; county says all jobs | NY AG; Westchester County |
| Cancellation | Until midnight of the third business day; waivable in writing in an emergency | NY AG; Westchester County |
| Deposit protection | NY bank escrow within 5 business days, location disclosed within 10, or a bond within 10 | NY AG |
| Up-front payment | No cash; no more than one-third before work starts (advice) | Westchester County |
Violations carry a price. The Attorney General lists actual damages plus a $500 penalty for fraudulent statements, and fines from $250 to $2,500 for violating the provisions that protect a customer's payments. Home improvement contractors must also be licensed in Westchester, so a signed contract with an unlicensed firm is a problem from the start; see Westchester plumbing and contractor licences.
A sewer contract should also name the permit and who obtains it. The county says to be suspicious if a contractor asks the homeowner to get it. Which office issues sewer permits varies by town and is covered in sewer repair permits in Westchester. A list of points to pin down in the document itself is in ten questions before signing a sewer job.
Key facts
- State law requires a written contract for home improvement work over $500 (NY AG).
- Westchester says all home improvement contracts should be written and signed (Westchester County).
- You may cancel until midnight of the third business day after signing; the right can be waived in writing in an emergency (NY AG).
- Deposits go into a New York bank escrow within five business days, or the contractor posts a bond within ten (NY AG).
- Payment-protection violations carry fines from $250 to $2,500 (NY AG).