Call to Action: Protect Yourself Before You Sign

Until the U.S. has real deposit insurance or stronger consumer protections for residential construction, homeowners must act as their own risk managers.

If you are considering an ADU or small home project, here are concrete steps you can take to protect yourself:

1. Do deeper due diligence than feels necessary. Don’t rely on marketing, testimonials, or confidence alone. 
Ask for:

• Proof of recently completed projects (not just photos)
• ​Client references you can speak to directly
• Clear timelines with consequences for non-performance
• Confirmation of license status, bonding, and insurance — verified independently

2. Never hand over a large deposit without safeguards. Because there is no deposit insurance for construction in the U.S., large upfront payments place all the risk on the homeowner.
Whenever possible:

• Avoid lump-sum deposits (this will not be popular with quality companies but if they are quality company they may work with you using an escrow account).
• Question any request that feels disproportionate to work performed
• ​Understand exactly what your deposit is paying for right now

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3. Use escrow — even if the contractor doesn’t suggest it You can request a third-party escrow account where funds are released only when specific, documented milestones are completed.
Examples include:

• Permitting process includes application submittal, back and forth with the jurisdiction and final approval, surely there are some steps in there to hold back funds on until they have performed the work. Do you ever give your mechanic, dentist or doctor money upfront?
• Site prep or foundation completion
• Factory production milestones
• Delivery to site
• ​Installation and Certificate of Occupancy

If a contractor resists escrow or milestone-based payments, find out why and you may want to treat that as a serious red flag, not a minor inconvenience. If you are reading this you can reference the fact that no matter how great of a person you think they are, your financial resources needs to be protected.

4. Tie payments to verification, not promises. 
Every payment should correspond to:

• A clearly defined milestone
• Written confirmation or inspection
• Photos, documentation, or third-party verification
• ​If progress cannot be verified, payment should not be released.

5. Get independent eyes on the contract
Before signing:

• Have a construction attorney or knowledgeable advocate review the agreement
• Watch for vague timelines, open-ended language, or clauses that limit your remedies
• ​Ask what happens if the contractor fails to perform — and get the answer in writing

6. Trust your hesitation
If something feels rushed, unclear, or overly optimistic — pause. Housing is not a startup gamble. Your home, savings, and future deserve more than trust alone.

Until the system changes, protection starts with preparation.Doing this work up front may feel uncomfortable or “difficult,” but it can prevent years of stress, financial loss, and uncertainty later. Until stronger consumer protections exist, asking hard questions is not being difficult — it’s being responsible.

If you’re already in a project or want help understanding your options, seek out independent advocates and resources — and know that you are not alone.

✨ In housing, diligence is protection. ✨

Be Well, 
Lindsay Wood 
Tiny Home Lady®