Legal Question in Business Law in California

Maybe; maybe not. It would probably depend upon two things: (1) what does the builder's contract say; and (2) what is meant by "skim." The term "skim: has negative connotations of illegal activity, and in general would be used in the context of an impermissible financial act in carrying out and billing for contract work. On the other hand, it is certainly legal for a contractor to bill a percentage of costs, whether we call it skimming or not, if the contract so provides.

I would add that if it is a fixed price contract or the upgrades were quoted at a fixed price and the contractor finds they can do it for less that is not skimming. That is their money. If you give a more complete description of what you are talking about we could give a more specific answer.

The first thing to do would be to look at the contract and see what it says regarding the issue. If you are talking about a change or upgrade to the original contract the price of the change is negotiated and builders will nearly always include a markup for overhead and profit.

I'm not sure what you mean by "skimming" the upgrade costs. It could be something perfectly legal like markup in the costs of the upgrade.