Who can occupy an ADU? Is the owner required to reside on the same property?

General Occupancy Guidelines

Flexibility in Occupancy

Generally, ADUs are intended to provide flexible living arrangements. They can accommodate a variety of occupants, including family members, friends, and renters. This flexibility is a key driver behind the growing popularity of ADUs, as they cater to diverse housing needs.

Rental Potential

Many homeowners construct ADUs with the intention of generating rental income. ADUs can serve as long-term rental units, providing a stable income stream, or short-term rentals, offering flexibility for both homeowners and tenants.

Multigenerational Living

ADUs are also ideal for multigenerational living, providing independent living spaces for aging parents, adult children, or other family members. This arrangement allows families to stay close while maintaining a degree of privacy.

Residency Requirements and Legislative Changes

Assembly Bill 976

California's Assembly Bill 976, which took effect on January 1, 2024, significantly alters the landscape of ADU occupancy. This legislation explicitly prohibits local jurisdictions from imposing owner-occupancy requirements on ADUs. This means that homeowners in California can rent out their ADUs regardless of their residency status, expanding rental opportunities and increasing housing availability. This change is intended to spur more ADU development and increase the number of available rental units.

Impact of AB 976

AB 976 is expected to significantly impact the ADU market in California, making ADUs a more attractive investment for homeowners. It will also increase the availability of rental housing, particularly in areas with high housing costs.

Local Variations

Some local jurisdictions have historically imposed owner-occupancy requirements, mandating that the homeowner reside on the same property as the ADU. These requirements were often intended to prevent absentee landlords and maintain neighborhood character.

Fair Housing Laws and Tenant Rights

Federal and State Laws

When renting out an ADU, homeowners must comply with federal and state fair housing laws, prohibiting discrimination based on protected characteristics. These characteristics include race, color, religion, national origin, sex, familial status, and disability.

Tenant Rights

Tenants of ADUs have the same rights as tenants in any other rental property, including the right to a safe and habitable living environment. Landlords must comply with all applicable landlord-tenant laws, including those related to security deposits, eviction procedures, and maintenance responsibilities.

Local Regulations

Some jurisdictions may have additional regulations related to tenant occupancy, such as minimum rental periods or limits on the number of occupants. To understand these regulations fully, it is vital to check with the local government.

Recommendations for Homeowners

• Consult Local Authorities: Contact the planning and building departments to obtain accurate and up-to-date information on ADU occupancy regulations.
• Review State Laws: Familiarize yourself with state laws, such as California's AB 976, which may override local regulations.
• Seek Legal Advice: Consult with a real estate attorney or legal advisor to ensure compliance with all applicable laws and regulations.
• Understand Fair Housing Laws: Educate yourself on fair housing laws and ensure your rental practices are non-discriminatory.
• Review HOA Rules: If the property is located within an HOA, there may be restrictions on ADU occupancy, including limitations on rental periods or tenant screening requirements. Obtain the HOA agreement in writing and thoroughly review the rules related to ADUs to ensure compliance with covenants and regulations.
• Create Rental Agreements: Create a comprehensive rental agreement (or use an existing one from a government agency: sample 1, sample 2, sample 3) outlining the tenancy terms if renting out the ADU.