Guides · Published 2026-10-21 · Updated 2026-10-24 · By David Linda, Founder

A contractor took my deposit in Colorado. What now?

You paid a deposit, the start date came and went, and now the contractor isn't answering. It happens more often than it should. Here's what Colorado law gives you, step by step, a demand letter you can adapt, and how to avoid it next time.

First, figure out which situation you're in

Late but reachable. The contractor answers but keeps pushing the date. This is usually a scheduling or cash-flow problem, and a firm written deadline often fixes it.
Gone quiet. No answers for a week or more. Move to the written demand below right away, and check the business's status (see "Check the business today").
Never intended to do the work. A fake name, a disconnected phone, other homeowners with the same story. That may be a crime as well as a broken contract. Add a police report to the steps below.

1. Put everything in writing now

Gather the contract, estimate, texts, emails, receipts and the payment record (check, card or app). Then send the contractor a short written demand. Email plus a mailed letter is a good habit, and certified mail gives you proof of delivery. You'll need this paper trail for anything that follows.

A demand letter you can adapt

On [date], I paid you $[amount] as a deposit for [work] at [address], under our agreement dated [date]. Work was to begin on [date]. It has not begun, and I have not heard from you since [date].

Please either begin work by [date, about 10 days out] or refund my deposit of $[amount] by that date. If I don't hear from you, I plan to file a claim in small claims court and complaints with the Colorado Attorney General and [the licensing body].

[Your name, phone, email]

Keep it factual and calm. A judge may read it later.

2. If it was a roofer, Colorado's roofing law helps

Residential roofing contracts in Colorado must include specific protections (C.R.S. 6-22-103):

You can rescind within 72 hours of signing and get your full deposit back.
The roofer must hold your payment in trust until materials are delivered to your home or most of the work is done.
If insurance is paying and the claim is denied, you can cancel within 72 hours of the written denial, and the roofer must return payments within 10 days, minus work actually performed (C.R.S. 6-22-104).

If your contract is missing these terms, point that out in your demand letter.

3. Know the construction trust fund law

Under C.R.S. 38-22-127, money you pay a contractor on a construction or remodeling project is held in trust for the subcontractors, workers and suppliers on that job. Using it for something else can count as theft under the statute. This law mainly protects the people who should have been paid from your money, so ask a Colorado attorney how it applies to your situation.

A related risk: if your contractor took your money but didn't pay a supplier or subcontractor, that supplier may be able to file a mechanic's lien on your home. Ask for lien waivers when you make payments on a bigger job.

4. Check the business today

Before you spend money on a lawsuit, find out what you're dealing with:

Secretary of State. Search the business name on the Colorado Secretary of State business database. Note the exact legal name, the registered agent (who can receive court papers) and the status. Of the Colorado contractor profiles where we've matched a Secretary of State record, 865 were in good standing, 311 were delinquent and 269 had been dissolved, voluntarily or administratively. A delinquent or dissolved status doesn't prove wrongdoing, but it changes who you sue and how you collect.
License. For an electrician or plumber, check the state license with DORA. For a roofer or general contractor, check with the city or county that licensed them. A license that lapsed or was never issued is useful evidence. PPRBD, for example, says a license expired for more than six months is administratively revoked.
Other homeowners. Search the business name with words like "deposit" or "complaint." A pattern matters to the Attorney General and the police.

5. Small claims court, up to $7,500

Colorado small claims court handles cases up to $7,500, not counting interest and costs (Colorado Judicial Branch; C.R.S. 13-6-403). You can file for a larger amount, but you can only collect $7,500, and you can't split a bigger claim into several cases. You generally file in the county where the contractor lives or has a regular place of business. There's no jury, and if you win, collecting is up to you. That's why the Secretary of State check matters: it tells you the exact legal entity to name.

6. File complaints where they count

Colorado Attorney General: file a consumer complaint at StopFraudColorado.gov. Patterns of complaints are how the state spots repeat offenders.
Licensing body: for an electrician or plumber, the DORA State Electrical Board or State Plumbing Board, which take complaints against licensees. For a roofer or general contractor, the city or county building department that licensed them, such as Denver Community Planning and Development or PPRBD in Colorado Springs.
Police: if the contractor took money with no intention of doing the work, a police report may be appropriate.
Your bank or card issuer: if you paid by card, ask about a dispute promptly. Dispute windows are limited, and checks, cash and payment apps usually offer much less protection.

How much deposit is reasonable?

For roofing, Colorado's roofing statute requires the trust language and the 72-hour cancellation right above. For other home improvement work, we didn't find a general Colorado statute that sets a maximum deposit. That's a practical question more than a legal one. A deposit that covers materials ordered for your job is normal. A large deposit for labor that hasn't started is a risk. If you're unsure what applies to your job, ask the Attorney General's office or a Colorado attorney.

Ways to lower the risk: tie payments to milestones (materials delivered, rough-in inspection passed, final inspection passed), pay by card where you can, and never pay in full before the work is done.

Next time: ask for the report before you pay

Most deposit disappearances share warning signs: no license where one is required, no permit history, a business name that doesn't match the license, a delinquent or dissolved Secretary of State record, or a pattern of complaints. Before you pay a deposit, ask the contractor for their verified HomeProFax report. It shows those records on one page. A contractor with a solid record can share it in a minute, and one who won't is worth a second look.

General information based on Colorado statutes and court guidance as of October 24, 2026. Secretary of State figures: HomeProFax Colorado profiles with a matched business record, as of October 24, 2026. This is not legal advice. For your specific case, talk to a Colorado attorney.

Common questions

Can I get my deposit back from a roofer in Colorado?

Colorado roofing contracts must allow you to rescind within 72 hours of signing for a full deposit refund, and the roofer must hold your payment in trust until materials are delivered or most of the work is done. If your insurer denies the claim, you can also cancel within 72 hours of the written denial.

What is the small claims limit in Colorado?

$7,500, not counting interest and costs. You can file for more but can only collect $7,500.

Where do I report a contractor who took my money in Colorado?

File a consumer complaint with the Colorado Attorney General at StopFraudColorado.gov, and with the body that licensed the contractor: DORA for electricians and plumbers, or the city or county building department for roofers and general contractors.

Is there a legal limit on contractor deposits in Colorado?

We didn’t find a general Colorado statute capping home improvement deposits. Roofing deposits must be held in trust and are refundable within 72 hours of signing. Ask the Attorney General’s office or an attorney about your situation.

How can I avoid losing a deposit next time?

Before you pay, ask the contractor for their verified HomeProFax report and check the license, permit history, business registration and any discipline flags it shows.

Sources

Official pages we checked for this guide. Rules change, so confirm with the agency before you rely on them.

More Colorado guides

All HomeProFax.com guides · Colorado contractors