Contractor payments in Washington: disclosures, liens, bonds

Contractor payments in Washington depend less on how the customer pays and more on whether your paperwork lets you collect when they don't. Two sections of the contractor registration law decide that. RCW 18.27.114 says a covered contractor can't bring a lien claim without proving it gave the customer a disclosure statement, and RCW 18.27.080 says an unregistered contractor can't sue to collect at all. Get those two right first; deposits, draws, card payments and ACH debits come after.

This guide is for remodelers, roofers, electricians, plumbers, HVAC shops and builders working in Washington. It follows a job from signing to the last draw, with the lien dates, bond and sales tax that sit around it. We checked each rule on October 17, 2026, on the Legislature's RCW and WAC pages and on the Department of Labor and Industries (L&I) page about liens.

What has to happen before a Washington contractor takes the first payment?

Two things: a current registration, and on most jobs, a signed disclosure statement. Both protect your ability to collect later, which makes them payment documents as much as licensing ones.

Registration comes first. Under RCW 18.27.080, anyone acting as a contractor can't bring or maintain a court action to collect pay for work that requires registration, or for breach of such a contract, without alleging and proving it was registered when it contracted. A court can find substantial compliance, but only if L&I had the required registration information on file and the contractor kept a current bond and insurance in force the whole time. A lapsed bond or insurance policy can cost you that fallback.

Then the disclosure statement. RCW 18.27.114 applies to repair, alteration or construction of four or fewer residential units or accessory structures when the bid or contract price totals $1,000 or more, and to commercial buildings priced from $1,000 up to less than $60,000. It doesn't cover public contracts under chapter 39.04 RCW or work for another contractor. You give the customer the statement, keep a signed copy for at least three years, and produce it if L&I asks. The same section requires you to tell the customer if your registration expires or is suspended or revoked before the work is done.

Timing matters. L&I's rule WAC 296-200A-300 lists failing to give a proper disclosure statement before beginning the project among the violations that can bring a citation. The practical fix is to hand it over at the signing table, with the contract, before you run the deposit. One exception helps service businesses: the same rule says a service company doesn't need a disclosure statement before taking payment for a service call unless a bid or contract is in place.

How should a Washington contractor set deposits and progress payments?

By the stages of the work, written into the contract with dollar amounts. None of the Washington rules in this guide sets a deposit percentage, which is a real difference from California, where the down payment on home improvement work is capped at $1,000 or 10% of the price, whichever is less (CSLB). Freedom to set the deposit isn't a reason to take a big one. A deposit far ahead of the work is the payment most likely to turn into a dispute.

Take a made-up $58,000 kitchen remodel at a house in Tacoma. Every figure is invented, and sales tax goes on top of each line.

The four stages add to $58,000. Each invoice uses the stage's name from the contract, so a homeowner, a lender or a card issuer reading both documents sees the same thing. Our guide to progress billing covers schedules of values on bigger jobs, and the change order guide covers pricing extra work before it starts.

If you sell the job in the customer's home, the federal Cooling-Off Rule gives the buyer until midnight of the third business day to cancel a sale of $25 or more, and you must return payments within ten business days of the cancellation notice. Treat a deposit taken at the kitchen table as refundable for those three days.

How do lien rights work for Washington contractors?

For a contractor covered by the disclosure rule, a Washington lien has three gates: the disclosure statement, a 90-day recording window, and an eight-month window to sue. Miss any one and the lien is gone.

The first gate is the disclosure from RCW 18.27.114. Without proof you gave it, a covered contractor can't bring or maintain a lien claim under chapter 60.04 RCW, however clearly the customer owes you.

The second is recording. Under RCW 60.04.091, you record the notice of claim of lien in the county where the property sits no later than 90 days after you last furnished labor, professional services, materials or equipment, and the notice lists the first and last dates you did. The statute calls that window a period of limitation. L&I's page on liens adds that a claimant must mail the owner a copy of the lien within 14 days of filing it.

The third is enforcement. RCW 60.04.141 says the lien expires eight calendar months after recording unless you file an action in superior court in that county within that time and serve the owner within 90 days of filing. If the claim of lien states credit terms you extended, the eight months run from the end of the credit period.

Run the dates on a made-up job. Your crew's last day on site is Friday, October 9, 2026. The 90th day after that is Thursday, January 7, 2027. If you record on Tuesday, December 1, 2026, the eight months run out on August 1, 2027, a Sunday, so file well before then. Put both dates in your calendar the day the crew leaves, not the day the invoice goes overdue.

Liens and lien waivers travel together. Our guide to lien waivers explains why an approval code on a card reader isn't payment yet, and why a waiver should wait until the money is in your bank account.

How do card and ACH payments fit Washington's rules?

The rules above don't care whether money arrives by card, ACH or check. They care whether each payment matches a signed contract and whether your registration and disclosure were in order. So pick the method by size and by where you are when the stage finishes.

Card payments can be disputed long after the job. Mastercard's chargeback guide allows some service disputes up to 120 calendar days after services end, with an outer limit of 540 days. ACH debits settle the same or next banking day (Nacha), but a homeowner who calls a debit from a personal account unauthorized has up to 60 days to return it (Nacha). Either way, the signed contract, the disclosure statement, dated photos and the owner's sign-off on each stage are what win the argument.

Clearo's mobile payments cover tap to pay and card readers on the job, and our virtual terminal sends invoices and payment links for each stage. Large draws can run through our ACH payment processing, which we price by quote, and Clearo says ACH payments usually fund the next business day. If a dispute does come in, our chargeback management tools help you answer it.

On card fees, our Washington page found no state statute that bans or caps surcharges, which leaves the Visa and Mastercard limits and their disclosure rules in charge. Write any surcharge into the contract's payment terms, so the card totals don't look like they disagree with the stage amounts. Our surcharging program handles the setup.

What does a Washington contractor bond mean for deposits?

It's a backstop for the homeowner if a deposit goes bad, and on a large job it can be smaller than the deposit itself. RCW 18.27.040 requires a registering contractor to file a surety bond of $30,000 for a general contractor or $15,000 for a specialty contractor.

A residential homeowner can sue the contractor and the bond in superior court, and has two years from substantial completion or abandonment, whichever comes first, to do it. Claimants other than residential homeowners can't take more than half the bond, and the surety's total liability never exceeds the bond amount. Suppliers and subcontractors you don't pay can claim against it too.

Read that from the customer's side. A homeowner handing a specialty contractor a $20,000 deposit is trusting you with more than your whole bond. Keep deposits close to what the first stage costs you, and the conversation about trust gets easier.

Who pays sales tax on a Washington construction contract?

On work for a consumer, the customer pays it and you collect it. Under WAC 458-20-170, prime contractors collect retail sales tax from consumers measured by the full contract price. Sales to a prime contractor of materials that become part of the structure are treated as sales for resale. A speculative builder working on its own land is different: it pays sales tax on its materials and on its subcontractors' work.

Washington's Department of Revenue says that when you perform a service at another location, you charge the rate where the customer receives it, so the job site's address sets the rate, not your shop's. A contractor based in Spokane working in another city uses that city's rate. Show the tax on every stage invoice, so the card or ACH total matches the contract plus tax. And remember that when a customer pays tax by card, you pay processing on the tax as well.

Washington payment mistakes contractors can avoid

• Running the deposit before the disclosure statement is signed.
• Keeping signed disclosure statements in a truck instead of a file you can find for three years.
• Letting registration, bond or insurance lapse mid-job.
• Waiting for an overdue invoice to start counting the 90-day lien window.
• Recording a lien and then letting the eight-month enforcement window close.
• Invoices that leave off sales tax, so the card total doesn't match the contract.
• Taking a deposit larger than your bond for work that's months away.

Next step

Send us a recent merchant statement for a free statement review, and we'll show what your deposits and stage payments cost by card and by ACH. If you'd like invoices and payment links set up around your contract stages, contact us, and see our page on home services payment processing for how card readers, invoices and ACH fit together on the job. Our guide to credit card processing for contractors covers the rest of the field setup.