Many people who construct ADUs reside in their primary residences. To assist in paying off the ADU costs, homeowners may build various types of ADUs they can live in while renting out their original residences. Homeowners who rent out single-family homes also construct ADUs on the property to rent out them as well, converting the lot into a multi-family building, which California encourages. ADU construction has become popular in areas with limited housing options.
Once the land has been converted to multifamily housing, the primary residence may be subject to tenant protections such as caps on rent increases and eviction limitations. You might also need to register your rental property, report vacancies, and pay fees if you are in a region with a local rent control. Additionally, properties that include ADUs may need to adhere to balcony rules and regulations if the units have outdoor spaces.
The location of the ADU also matters when rent control is involved. Assembly Bill 1482, which addresses rent control and tenant protection, was adopted in California in 2019. The areas of California covered by this law that do not have municipal rent stabilization ordinances include Torrance, Pasadena, Long Beach, and Lancaster. If you're building an ADU in these areas, consider also looking into balcony inspections and seismic retrofit for older structures.
What is AB 1482?
According to Assembly Bill 1482, landlords are
permitted to increase rents annually by 5% in addition to the metropolitan area's inflation rate. But no matter how high inflation is, they are only allowed to increase rents by a maximum of 10%. This restriction only applies to buildings that are 15 years or older, and it lasts until 2030, thus any new units constructed now are not subject to its provisions. However, if you’re dealing with an older structure, particularly those that require earthquake retrofitting or balcony structural repairs, compliance with this bill is crucial.
Not all residential structures are covered by AB 1482. Apartments and multi-family structures with two or more units are impacted by the bill, but single-family homes, owner-occupied duplexes, and condominiums are excluded, unless
they are held by companies or LLCs in which at least one member is a corporation.
As long as the home is 15 years old or older and is situated on the same lot as an ADU, the rent cap is applicable. Even if your primary residence is more than 15 years old and you decide to rent it out while building a new ADU, AB 1482 regulations still apply. Properties with features like tuck under parking or balcony repairs should also be evaluated for potential costs related to seismic retrofitting or soft story retrofits, which could affect overall housing costs.
According to AB 1482, landlords may continue to evict renters for the following reasons: failure to pay rent, a violation of a lease condition, refusal to
consent to a signed lease extension or renewal, Subletting or assigning without the owner's permission, refusal to let the owner into the apartment, the owner planning on residing in the apartment with their family, or The owner intends to make significant renovations.
SKS Construction can assist in plan check, permitting, and even build of your new ADU, making the process a breeze. A full-service design/build, engineering, and construction firm, SKS Construction was established in Los Angeles, California, in 1987. SKS Construction is recognized as a leader in engineering and construction of New Construction, Seismic Retrofitting and Balcony Repairs. The SKS team is composed of in-house designers, licensed contractors, and experienced engineers around the clock to attend to your every engineering and construction need.
Contact SKS Today For A Free Consultation!
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