If a homeowner signs a contract, gives a deposit, has a date to start the work, do i have to refund the deposit

That really depends on a lot of things. First of all, what does the contract the homeowner signed say? Does it make it clear deposits are non-refundable?

If it is not cut and dry in the contract, consider the following things:

1. Is it worth it to annoy this customer and keep their money if you performed no work? A bad complaint has a much better chance of spreading around then good comments.
2. Is it equitable to keep the money? Did you already purchase custom items that cannot be returned? Was work already done behind the scenes to prepare for the job? Did you turn down other work based on the expectation of this job?

These are all things you need to consider, as if you end up in court, you will have to justify why you felt entitled to keep the money.

I would suggest paying the consultation fee to discuss the situation with an attorney if you think you may go that route. Especially because NY may have some notice requirements that I am completely unaware of here in Milwaukee, WI.

Good luck,

Sean Sweeney

In NY a home owner can cancel a construction contract within 72 hours of signing it. After that, it becomes a fact specific question dependent largely on the wording of the contract. One thing to keep in mind is that NY courts are very reluctant to enforce penalties in contracts so keeping a deposit when you did no work can be difficult.