The Contractor Took a Big Deposit and Disappeared. Maine's One-Third Rule.

The pattern is familiar. A contractor quotes the job, asks for half up front "to order materials," cashes the check, shows up for a day or two, and then stops answering. The homeowner is out a large deposit and has a torn-up kitchen. The first thing I check is the size of that deposit, because Maine has a rule about it.

The one-third rule

Maine's Home Construction Contract Act applies to any home construction contract for more than $3,000 in labor or materials. Among other things, it requires the contract to be in writing, signed by both sides, and to spell out the payment terms, with the initial down payment limited to no more than one-third of the total contract price.

A contractor who takes half, or all, of the price up front has violated the statute, whether or not the work ever started. That matters for two reasons.

Why it matters

First, a violation of the Act is prima facie evidence of an unfair trade practice under Maine law. That changes the case. An ordinary breach of contract gets you your damages. An unfair trade practice claim, if it succeeds, can also get you your reasonable attorney's fees and costs, which is often the difference between a case that is worth bringing and one that isn't.

Second, the oversized deposit is usually not the only violation. The same contractor who asked for half up front often had no written contract at all, or a one-page proposal with no start date, no completion date, no warranty statement and no change-order terms. Every missing required term is another violation. By the time I finish the statute check, the contractor's position is usually much weaker than they think.

What to do first

Stop paying. Nothing more goes out until there is a written agreement about what happens next.

Put everything in writing. Text the contractor rather than calling, and keep every message. Photograph the state of the work, dated.

Gather the paper. The contract or proposal, every payment with the date and method, every text and email, and any permits that were pulled or weren't.

Send the demand. Maine's Unfair Trade Practices Act requires a written demand for relief at least 30 days before a suit for damages. A demand letter that lays out the specific violations, the amount paid, and the number you'll accept resolves a surprising number of these without a lawsuit. The contractor's lawyer, if they have one, will read the statute too.

If they don't respond, sue. District or Superior Court depending on the amount. The deposit is recoverable, and so is the cost of finishing or redoing the work, with attorney's fees on the table under the unfair trade practices claim.

If you're the contractor

The rule cuts both ways. If you are a contractor reading this, the one-third limit and the written-contract requirements are not optional, and a homeowner who hasn't paid you can use the same violations as leverage against you. A compliant contract protects your payment as much as it protects the homeowner. I review and fix contractor contracts too.

I handle home construction disputes for homeowners and contractors across Maine. This post is general information, not legal advice. More on how these cases go is on the Home Construction Disputes page, or call (207) 373-9302.