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Changes in California’s laws regarding how and where accessory dwelling units (ADUs) can be built have led to a boom in construction. Property owners are often eager to add an ADU to generate rental income, add a separate space for adult children or elderly parents, or to increase the usable living area of their primary dwelling. Contractors who work on such projects are in demand as well, making it an attractive market for builders in areas where available housing is scarce or very expensive.
Before either property owners or contractors rush in, however, it is important to note that liberalized regulation does not mean no regulation. Those contemplating a project should be aware of the risks associated with ADU construction in California. Many can be avoided with careful planning and awareness of the applicable laws but are difficult and expensive to deal with after the damage has been done.
Because ADUs are smaller than most houses and may take the form of an attached unit rather than a free-standing structure, it can be tempting for some to think of them as being somehow different than a regular residential unit. This mindset can prompt serious errors, including:
| Types Of ADU Construction Risks | Our Take On Things |
| Unpermitted construction | In years past, the difficulty of having a project permitted goaded some property owners to simply move ahead with an “ask forgiveness, not permission” attitude. With recent changes such as the updates in A.B. 2221 and S.B. 897 that require local agencies to give detailed feedback on application denials, fewer obstacles stand in the way of getting a permit—and it is a step that should never be skipped. Unpermitted ADUs can be hit with fines, insurance issues, and potential lawsuits from tenants. |
| Contractual disputes | ADU projects should be regarded no differently than any other construction or remodeling project in terms of formal legal arrangements. Disputes can arise at any stage over costs, timelines, and work scope. Having a well-drafted contract and open communication between property owner and contractor can help prevent and resolve issues. In addition, when disputes arise, often an attorney can provide advice that helps resolve it before it mushrooms into an actual lawsuit. On the other hand, if you have been sued over an ADU issue, you need to contact a construction attorney immediately. |
| Compliance with building codes | As with construction permits, adhering to all applicable building codes should be a high priority in building an ADU. Local building officials can insist that anything not built to code be upgraded to the correct standards, resulting in additional expense and time for redoing work that can delay the completion of a project. |
| Health issues | This issue tends to go hand in hand with problems of unpermitted construction or structures that are not up to code. Examples are shortcuts causing poor ventilation that could result in mold; or use of paint with high lead content. Each of these can make people sick and result in lawsuits. |
| Fire risk | Although some setback rules have changed for ADUs, there still must be a 3-foot clear path between the property line and all exterior walls, including the eaves. To fight a fire, firefighters need access to all sides of the ADU. Plans that do not allow for this access risk rejection and may require a costly redesign. |
| Insurance | Property owners cannot assume that their regular homeowner’s insurance will automatically cover an ADU. These units need their own insurance coverage, whether as an extension of the existing homeowner’s policy or as separate coverage. Owners should speak to their insurance broker when the project is in the planning stages to ensure that the correct coverage is in place at the correct time. |
Whether you are a property owner wanting to add value or elbow room to your existing property; or a contractor pursuing opportunities to meet demand for ADUs in your area, many of the best opportunities to avoid legal and regulatory problems come in the planning stages. The regulations and requirements you are not aware of can come back to bite you! The real estate and construction law experts at Ghassemian Law Group can help prevent these problems. If you are planning an ADU project, you are in the middle of a project that has hit a snag, or have actually been sued for an ADU issue, contact us here to schedule your consultation today.
This article is informational only and meant to provide guidance. It is not meant to be legal advice and it does not create an attorney-client relationship. For what to do in your specific situation, please consult with a qualified Construction Law attorney.
January 14, 2025
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