A contractor who takes your money and vanishes has likely committed fraud. California law provides criminal and civil remedies. Here is exactly what to do, in order.
California Penal Code §532 (theft by false pretenses) applies when someone takes money through false promises. California Business and Professions Code §7160 (home improvement fraud) applies when contractors take excessive deposits or abandon home improvement projects — and carries civil penalties of three times your actual damages.
File a police report with your local police department or sheriff's office. Bring your contract, payment records, and a written timeline. Even if police do not immediately investigate, a police report creates an official record that strengthens your civil case and may be required by your bonding company.
If the contractor is licensed, file a CSLB complaint at cslb.ca.gov right away. The CSLB can suspend the contractor's license and may facilitate recovery through their bond program. See our CSLB complaint guide.
Look up the contractor's license on cslb.ca.gov and find their bonding company. California contractor bonds are currently $25,000 minimum. See our bond claim guide.
If the contractor can be located, send a formal demand letter first. Then pursue a civil lawsuit for actual damages plus, if fraud is proven, treble damages under Business and Professions Code §7160.
Under Business and Professions Code §7031, you can recover all money paid to an unlicensed contractor regardless of whether any work was performed. See our unlicensed contractor guide.
When a contractor takes your money and disappears, you have two parallel paths available and you should run both at the same time:
The criminal path: Police report → District Attorney referral from CSLB → potential Penal Code §532 prosecution. You cannot control the criminal timeline, but a police report and CSLB referral create pressure and an official record. If the contractor is criminally charged or convicted, that record dramatically strengthens your civil case.
The civil path: Demand letter → CSLB complaint + bond claim → civil lawsuit under BPC §7160 for treble damages. This path is within your control and can proceed regardless of what happens criminally.
Under BPC §7160, you can recover your actual losses (money paid, cost to complete the project with another contractor, consequential damages) plus up to the same amount again — effectively double recovery at minimum. In cases of serious fraud, courts have awarded triple the actual damages. Add attorney fees if your contract includes a fee-shifting clause, and your total recovery can be substantial relative to what you originally lost.
A contractor claiming they "ran out of money" does not eliminate your legal rights — it changes the theory slightly. Running out of money and abandoning a project is still breach of contract and may still qualify as willful failure to complete under BPC §7160 (which does not require intent to defraud from the beginning). The practical question is whether there are assets to collect from. Bay Legal PC can investigate the contractor's financial situation as part of the legal strategy.
Yes. A contractor cannot escape liability by changing their business name or forming a new company. Legal remedies include piercing the corporate veil (when the new entity is a sham continuation of the old one), personal liability (when the contractor operated as a sole proprietor), and fraudulent transfer claims (when assets were moved to avoid the judgment). These are complex legal theories that require an attorney.
Bay Legal PC handles construction disputes throughout California. Tell us about your situation and we'll be in touch promptly.
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