Real Estate

ADU Rent Control

With confusing state laws and local ordinances, understanding ADU rent control can be quite difficult. That is why we put together this article to hit the main key points of renting out your ADU in California.

How Old Is Your House/ADU?

The Costa-Hawkins Act prevents any local government from imposing rent control ordinances on any unit built after February 1, 1995. So, if your ADU was built after that, you do not need to follow local ordinances that are often stricter than state law. The only exception is if your house was built before 1995 and you are attempting to rent it out while living in your ADU, you will have to abide by local ordinances. There is also another exemption if you are tearing down an old ADU and rebuilding one to replace it, it will also have to follow local ordinances.

If your unit is over the age of 15 years but built after 1995, you are subject to AB 1482. This bill allows landlords to raise rents by 5% plus the rate of inflation in their metropolitan area. If your unit is younger than 15 years old, you don’t have to abide by any rent control laws until it turns 15 years old.

Where Is Your ADU Located?

If you build an ADU in Los Angeles, you can not raise your rent at all. This is because the city of LA froze rents on all properties due to the Covid pandemic and has not unfrozen them yet. If you are building one outside of LA, this will likely not apply to you. However, it is important to check with your local government before blindly assuming your city hasn’t imposed a rental freeze like this.

What Type Of ADU Do You Have?

The type of ADU can also affect what rent control regulations you need to follow in certain cities. For example, in LA a detached ADU is exempt from local rent stabilization ordinances unless it is replacing a unit that was previously rent-controlled. However, attached ADUs that are attached to a house built before 1978, must abide by local ordinances.

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