Many state and local governments have developed unit legalization programs to allow homeowners to legalize unpermitted ADUs. Whether you built it yourself, inherited, or purchased property containing one, legalizing your ADU is a smart move that can benefit you and your community.
The process of legalizing an unpermitted ADU can be broken down into five main steps. Read on to find out why you should legalize your ADU and how to go about it.
What Is an Illegal ADU?
Before we dive into how to legalize your ADU, let’s first define what makes an ADU illegal or unpermitted.
As a general rule, a homeowner must acquire the correct permits and certificate of occupancy from their local jurisdiction for an ADU to be legal. Not undergoing the steps to obtain these documents results in the finished ADU being illegal.
The permitting process can be lengthy and tough to undergo if you are not aware of all the city codes. As a result, some people choose to skip it to save themselves time and money. However, it will cost them or the next homeowners much more time and money down the line.
The reason you need to acquire a permit is to keep everyone safe. The building codes ensure your structure is safe to live in and natural disaster protocols help keep your unit safer in the event of an earthquake, fire or flood. Having an unpermitted ADU means you could be putting the people who live inside it in danger and not even know it.
The Path to ADU Legalization
Many states, including California, have begun encouraging the development of ADUs to help combat the housing crisis. To have ADUs provide affordable housing, they need to be legal. Renting out an illegal ADU can be risky for the homeowner who will face serious fines and legal actions against them. Due to this, many local governments within various states have developed unit legalization programs or have created ways to legalize an ADU within their ADU programs.
For example, Los Angeles City Planning has created an Unpermitted Dwelling Unit (UDU) Ordinance (Ord. No. 184,907). The UDU ordinance allows property owners to legalize their ADU units as long as all life safety conditions are met. The newly legalized units can join the housing market if the owner follows the 6-step stipulated process with City Planning, the Department of Building and Safety (LADBS), and the Housing and Community Investment Department (HCIDLA).
Pros & Cons of Legalizing ADUs
People who have built an ADU without permits did so because they thought the drawbacks to gaining a permit outweighed the benefits. That may have been true a few years ago, but with new laws that encourage ADU development, legalizing your unit will be quite beneficial.
Benefits of Legalizing ADUs
There are high-risk consequences to owning and renting out an unpermitted ADU. Renting an illegal unit can result in serious fees, citations and potential legal actions against owner. Your tenants can even take you to court to obtain a refund for all monies paid for rent and utilities. So, by legalizing your unit, you are preventing the loss of already acquired rental income and can rent out your ADU without worrying about it.
Also, if there were ever an accident such as an earthquake, fire or flood to the unpermitted ADU, insurance would not cover the damages. Essentially, legalizing your ADU protects you and your tenants from high-risk consequences, and the process is easier than ever to do now.
Another good point is that a legalized ADU adds value to your home. So, if you plan on ever selling, your property will be worth more with a legal ADU on it rather than an illegal ADU that is considered as risk liability.
Drawbacks of Legalizing ADUs
The main drawback to legalizing an ADU is the cost. If you did not take into account any building codes while constructing your unit, it can be quite costly to get it to living standards. The process can be lengthy depending on where you live, who you work with, and how much needs to be done to legalize your unit.
However, if you did take into account setback regulations and built your unit to code without acquiring the permits; the process will be a lot less expensive and quicker to undergo. It all depends on how well built your ADU is and the ordinances in place within your jurisdiction that determine how easy it is to bring your unit up to code.
Should You Legalize Your ADU?
Taking everything into consideration, the benefits outweigh the drawbacks when it comes to legalizing your ADU. There is much less risk of losing money through fines and other legal actions, plus you get to benefit from having a higher property value. Even for people who use an ADU in other ways besides rental income, having it legalized can ensure you are covered for insurance purposes and open up the door for renting it out later down the line if you ever change your mind.
With that being said, let’s dive into how to legalize your unpermitted ADU.
Step 1: Assess the Existing ADU Unit
The first step on the path to ADU legalization is to assess the ADU. Building an ADU yourself without worrying about permits means your unit may not meet city code guidelines. To determine areas where your ADU needs to be improved, you are going to need to know the ADU zoning laws of your local government.
You will need to take into consideration things like:
- Energy restrictions
- If it contains a kitchen and bathroom
- Parking requirements
- Setback requirements
- Square footage requirements
- Structural requirements
There are a lot of aspects that go into determining whether or not an ADU is up to code. You can go to your local planning board for more information about what is needed, or you can work with an ADU professional.
An ADU professional will be familiar with your local building codes and zoning ordinances. They will be able to interpret the law and perform a feasibility study to determine what is feasible to build on your property. Aspects of your current unit that are not feasible for your property are the parts you know you need to address.
An important note to consider is that not all architects and contractors are familiar with ADU laws. You need to work with someone who has experience developing ADUs in your area and specializes in the field.
Step 2: Create Plans for Changes
Once you know what needs to be changed, it is time to create the plans needed to make those changes.
We highly recommend working with someone familiar with ADUs to draw up your plans. The quicker you can get your plans approved; the more time and money you will save. An ADU professional will be familiar with what needs to be done to bring your unit up to code.
Step 3: Submit Plans for Approval
Once you have your plans drawn up, it is time to submit them to the city for approval. This step is made easier by many local jurisdictions that offer unit legalization programs.
During the permitting process, the planning staff will verify that your ADU is not violating setback requirements. If it is, a variance permit will need to be obtained to legalize the unit.
Building staff will verify that code requirements for safe and sanitary housing are met and identify any changes necessary.
If you don’t want to deal with the city directly, we recommend working with an ADU designer who can deal with them for you.
Once your ADU plans are approved, you will receive the necessary permits and can begin making changes.
Step 4: Start Construction
Now you can begin making the necessary updates to your ADU to legalize it. How long this process takes will be completely dependent on how many changes need to be made and the complexity of doing so.
We highly recommend choosing the right contractor for the job otherwise this step could be more lengthy and costly than needed. A good contractor will have:
- A detailed explanation of their pricing (aka no hidden fees)
- Experience in your area so they are familiar with the laws
- Multiple years of experience constructing ADUs
A good contractor will also be able to help you avoid the most common ADU mistakes and answer any of your ADU questions.
Step 5: Schedule Inspections
With a building permit in hand and a contractor hired, the next thing you need to do is have a city inspector inspect the unit for proper construction. The inspector will come multiple times throughout construction to inspect different items. Inspecting completed work sometimes means opening things back up to make sure everything meets city requirements. This can be quite disruptive if you believed everything was done.
An inspector will check things like:
- Smoke and carbon monoxide alarms
- Cooking facilities
- Electrical systems
- Moisture control
- Verifying appropriate exit doors and windows
They will do their best not to be disruptive of completed work, but sometimes things need to be opened up to ensure they meet codes. Don’t be surprised if you have to open up your electrical systems and plumbing.
Once you have finished construction and passed all of your inspections, your ADU will be legalized!
Cost Of Legalizing Unpermitted ADUs
A common question people ask before starting this process is: how much does it cost to legalize an unpermitted ADU?
The cost of legalizing an unpermitted ADU varies vastly from project to project. It is completely dependent on how much needs to be done to bring the unit up to code. If you just need to add a heating unit, your costs won’t be too bad. However, if your unit doesn’t meet basic structural requirements, you could be looking at a lot of money.
How To Pay for Your Legalization
Legalizing your ADU can be anywhere from a few thousand dollars to a hundred thousand dollars. Luckily, there are different ADU financial options available to you, including grants and incentives provided by many states and local jurisdictions.
Check with an ADU financing professional to see what types of loans are available to you. A few that could work for a project like this include:
- Renovation loans
- Cash-out refinance
You can also use existing savings if your legalization project turns out to be more affordable than you thought.
Enjoying Your Legalized Unit
In the end, legalizing your ADU will be worth it. Now you will be able to rent your unit out to bring in passive income. Not only that, but you will also be providing a family in need with affordable housing. You will be helping to combat the growing housing crisis and making extra money while doing so.
You will even be able to legally use your unit for house hacking to pay off the mortgage of your primary home. Plus, you will no longer have to be worried about someone turning you in for not having a legal ADU.
Legalize Your ADU Today!
If you have an unpermitted ADU and are looking into legalizing it, let us help! Here at Levi Design Build, we have years of experience developing quality ADUs. You can trust our team of professionals to bring your ADU up to code.
Start with a free consultation where we will talk about how the process works in more depth, and then allow us to deal with creating plans and getting them approved by the city. We are committed to making the legalization process as easy and affordable as possible for you.
Contact us today to see how we can help legalize your ADU.