Eviction Challenges with Accessory Dwelling Units (ADUs)

What should California landlords know?

California’s severe housing shortage has led to a significant rise in Accessory Dwelling Units (ADUs), commonly known as “granny flats” or “in-law units.” These secondary housing units are seen as a practical solution to increase affordable housing options. 

For landlords, ADUs present both opportunities and challenges. They offer a way to generate additional rental income and maximize property use. However, managing ADUs involves complex zoning laws, unique tenant protections, and eviction scenarios.

This article will explore the following areas:

• Understanding ADUs: Definitions, types, and their growth in California.
• Legal Framework: State legislation like SB 9 and AB 1482, local ordinances, and their implications for landlords.
• Eviction Challenges: Issues arising from shared spaces, tailored lease agreements, and case studies highlighting common disputes.
• Operational Considerations: Best practices for lease agreements, maintenance, habitability, and effective communication strategies.
• Broader Implications: The impact of ADU growth on landlord-tenant dynamics, potential regulatory changes, and future housing policies.

Through a close examination of these topics, landlords can better understand the complexities of managing ADUs and make more informed decisions.

*This article is for educational purposes only and does not constitute legal advice. Educating yourself is very important and will streamline and reduce your legal risk. However, seeking professional legal counsel consolidates your efforts and pre-emptively ensures compliance whenever issues inevitably arise. 

What Are ADUs?

Definition and Characteristics

Accessory Dwelling Units (ADUs) are secondary housing units built on the same lot as a primary residential property. 

These can be standalone structures attached to the main home or converted spaces within an existing property. Often referred to as “granny flats,” “in-law units,” or “backyard homes,” ADUs are designed to provide additional housing options without the need for new land development. They are typically smaller and include essential living amenities like a kitchen, bathroom, and sleeping area.

For landlords, ADUs present an opportunity to maximize property use by generating rental income or providing housing for family members or caregivers. However, their unique setup often requires a tailored approach to zoning compliance, tenant agreements, and management.

Types of ADUs

ADUs come in several configurations, each with its own considerations for construction and management:

• Detached Units: Free-standing structures, such as a small cottage, built separately from the main house.
• Attached Units: Additions to the existing structure that share at least one wall with the primary residence.
• Garage Conversions: Renovating an existing garage into a livable space, often the most cost-effective option.
• Internal ADUs: Reconfigured spaces within the main home, such as a basement or attic, adapted for independent living.

Each type has implications for zoning compliance, privacy, and tenant agreements.

Growth of ADUs in California

California has embraced ADUs as a pivotal solution to its worsening housing crisis. The state’s extreme shortage of affordable housing has left millions of residents struggling to secure homes while homelessness and housing insecurity become more widespread. Against this backdrop, ADUs are seen as an innovative way to address housing needs without requiring expansive new developments, often deterred by high costs and community opposition.

State-Level Reforms Encouraging ADUs

Legislation such as SB 9 and AB 68 has removed traditional barriers to ADU construction, making it easier for homeowners to add these units to their properties. 

Essentially, these laws:

• Relax Zoning Restrictions: ADUs are now permitted in areas that previously only allowed single-family homes, increasing housing density.
• Streamline Permit and Construction Processes: Requirements for permits and approvals have been simplified, reducing wait times and administrative hurdles for construction.
• Limit Development Fees: Caps on impact fees make ADUs a more affordable option for property owners.

Local Efforts Supporting ADU Growth

Cities across California have implemented local programs to accelerate ADU adoption. For example:

• Los Angeles offers pre-approved ADU designs, expediting the construction process.
• San Francisco has incentivized ADU construction by waiving certain fees and allowing additional flexibility in zoning requirements.
• San Diego provides financial assistance programs for ADU construction, including low-interest loans for homeowners.

How ADUs Mitigate Housing Challenges

ADUs contribute to addressing California’s housing crisis in several meaningful ways:

• Increased Housing Supply: Allowing homeowners to build secondary units on existing properties, ADUs create more rental opportunities without requiring new land.
• Affordable Housing Options: ADUs often provide a cheaper alternative to traditional rental units, particularly for students, seniors, and low-income individuals.
• Preservation of Neighborhood Character: Unlike large apartment buildings, ADUs integrate seamlessly into residential neighborhoods, helping to meet housing needs without altering the community’s visual or social fabric.
• Flexibility for Homeowners: Property owners can use ADUs to house family members, rent to long-term tenants, or generate income through short-term rentals, offering financial stability.

Challenges of Rapid ADU Expansion

While ADUs hold promise, their rapid growth has introduced new complexities. Increased density can strain local infrastructure, such as parking and utilities, particularly in areas unprepared for additional residents. 

ADUs are often noted as a key solution component in the broader conversation about California’s housing future. Yet, their long-term success will depend on balancing the benefits of increased availability with the challenges of ensuring fair tenant protections and value to the landlord. 

Zoning Reforms and ADU Development

State Legislation

California’s housing policies have undergone significant reform in recent years. Increased emphasis has been on easing zoning restrictions to encourage the development of Accessory Dwelling Units (ADUs). Among the most transformative pieces of legislation are SB 9 and AB 68, which have reshaped how homeowners can use their properties.

• SB 9 (2021): Known as the California Housing Opportunity and More Efficiency (HOME) Act, SB 9 allows property owners to subdivide single-family lots and add up to two residential units per parcel. This effectively enables the construction of ADUs in areas historically zoned for single-family homes, significantly increasing housing density.
• AB 68 (2019): This law streamlined the permitting process for ADUs and prohibited local governments from imposing minimum lot sizes and other restrictive zoning requirements. AB 68 also reduced parking requirements and mandated shorter approval timelines, making it easier and faster for property owners to build ADUs.
• AB 587 (2022): Introduced additional flexibility by allowing the separate sale of ADUs under specific conditions. This helps property owners finance construction and create additional housing opportunities.

These laws collectively remove longstanding barriers to ADU development, positioning them as a key tool in addressing California housing issues.

Local Variations

While state legislation provides the framework for ADU development, its implementation typically varies at the local level. Some cities have adopted unique approaches to meet their specific housing goals:

• Los Angeles: The city has actively promoted ADU construction by offering pre-approved design plans and expediting the permitting process. Los Angeles has also embraced innovative programs like “backyard homes” pilot projects, which provide financial incentives to homeowners for building affordable ADUs.
• San Francisco: Known for its stringent zoning regulations, San Francisco has adjusted its policies to align with state mandates. The city now allows for greater flexibility in converting spaces like basements and garages into ADUs, particularly in rent-controlled buildings.
• San Diego: San Diego has eliminated many fees associated with ADU construction, such as impact fees for units under 750 square feet. The city also offers technical assistance to guide homeowners through the construction and permitting process.

Impact on Landlords

These zoning reforms have opened up opportunities to develop ADUs and increase rental income. With greater flexibility to add units, property owners can use their land without purchasing additional property. However, this increased freedom comes with added regulatory oversight, including:

1. Compliance with State and Local Laws: a web of zoning laws, building codes, and tenant protections, which can vary by city and county.
2. Permit and Inspection Requirements: These requirements involve meeting strict safety and habitability standards.
3. Tenant Protections: Many cities extend rent control and just cause eviction protections to ADU tenants. Landlords must carefully manage their tenant relationships and ensure compliance with local laws.

Legal Protections for Tenants in ADUs

California’s comprehensive tenant protection laws, which often extend to ADU tenants, shape the legal framework surrounding ADUs. While designed to prevent unfair treatment of renters, these protections introduce added responsibilities for ADU landlords.

AB 1482 and ADUs

California’s AB 1482, also known as the Tenant Protection Act of 2019, significantly shapes the relationship between landlords and tenants in ADUs. This law establishes statewide rent control and just cause eviction requirements, which often apply to ADU tenants.

For landlords of ADUs, the law means:

• Rent increases are capped at 5% plus the local Consumer Price Index (CPI), or 10%, whichever is lower.
• ADU landlords can only evict tenants for specific, legally defined “just cause” reasons, such as nonpayment of rent or breach of lease terms.

However, there are nuances to how AB 1482 applies to ADUs. For instance, if the ADU is part of an owner-occupied property with no more than two units, it may be exempt from rent control and may just cause provisions. 

Local Tenant Protection Ordinances

In addition to statewide protections, many California cities have enacted local ordinances that provide further safeguards for tenants, including those in ADUs. These local regulations expand on AB 1482, providing greater protections in the towns with historically tight rental markets.

For example:

• Los Angeles extends rent stabilization to some ADUs that are part of larger rent-controlled properties, even if they are outside state requirements.
• San Francisco requires landlords to follow strict eviction procedures, including relocation assistance for certain tenants.
• Oakland applies its local Just Cause for Eviction Ordinance to ADUs, ensuring tenants have the same legal recourse in disputes.

These ordinances mean landlords must stay informed about both state and local laws to avoid violations, which can result in fines or legal challenges.

Owner-Occupied Exemptions

One key distinction in tenant protection involves owner-occupied properties. If the primary residence is owner-occupied and the property contains no more than two residential units (e.g., a primary home and an ADU), certain exemptions apply:

• The property is generally exempt from AB 1482’s rent control provisions.
• Just cause eviction requirements may not apply, allowing the landlord more flexibility in managing the tenancy.

This exemption is particularly relevant for homeowners who build an ADU to generate additional income or provide housing for family members. However, landlords must document their owner-occupied status carefully. Failure to prove this exemption in legal disputes can undermine their position.

Unique Eviction Challenges for ADUs

The unique nature of ADUs introduces specific eviction challenges for landlords. These issues arise from the proximity between landlords and tenants and the distinct legal considerations associated with ADU leases. 

Proximity and Shared Spaces

ADUs often involve shared living arrangements, particularly when the landlord resides on the same property. 

Whether it’s shared driveways, yards, or utilities, landlords’ and tenants’ close proximity can blur the boundaries between personal and rental spaces, leading to interpersonal and legal challenges.

• Interpersonal Conflicts: Living in close quarters can increase the likelihood of disputes over noise, privacy, or maintenance responsibilities. For example, tenants may feel that landlords are overly intrusive, while landlords may view tenants’ habits as disruptive.
• Legal Considerations: In eviction scenarios, shared spaces can complicate legal proceedings. Tenants may claim violations of habitability standards or argue that shared utilities create inequitable living conditions. If not proactively addressed, these claims can delay or derail eviction efforts.

Clear communication and well-defined boundaries are critical to fostering a respectful living environment and diminishing misunderstandings. Documenting shared responsibilities in the lease agreement is recommended to help mitigate disputes before they escalate.

Distinguishing ADU Leases

Leases for ADUs require a level of customization that accounts for the unique arrangements.

Standard residential lease templates often fail to address the specific challenges ADUs pose. For example:

• Clarifying Boundaries and Responsibilities: A tailored lease should specify how shared spaces will be used, who is responsible for maintenance, and how utilities will be managed. For instance, the lease could outline rules for shared driveways, designate specific parking spots, or clarify use times for certain areas.
• Addressing Owner-Occupied Arrangements: In cases where the landlord resides on the property, the lease should clearly state any conditions tied to this arrangement, such as restrictions on tenant behavior in shared spaces.
• Preparing for Eviction Scenarios: A customized lease can include clauses that align with local tenant protection laws while protecting the landlord’s rights. For example, a clause about compliance with house rules or clear definitions of “just cause” for eviction can simplify future disputes.

Zoning and Legal Compliance for Evictions

Eviction Notice Requirements

Landlords must comply with state and local regulations when serving eviction notices to tenants in ADUs, ensuring that all notices are legally valid. 

Common considerations include:

Notice Content

Eviction notices must clearly state the cause for eviction, including detailed explanations if required by local ordinances. Generic or incomplete notices can be grounds for dismissal of an eviction case. Any exceptions must be stipulated by the ADU arrangement and match local ordinance requirements.

Timing and Delivery

California law mandates specific notice periods based on the type of eviction:

• Three-Day Notice for serious lease violations like nonpayment of rent.
• 30- or 60-Day Notices for no-fault evictions, depending on the tenant’s duration of residence.

For more detailed information on California’s eviction process and notice requirements, see Navigating the Eviction Process in California, Serving Eviction Notices in California, and A Chronological Roadmap to Processing Evictions in California.

ADU-Specific Challenges

ADU landlords often share property with tenants, leading to unique scenarios such as serving notices at the same property where both parties reside. To avoid claims of improper notice delivery, landlords should strictly follow the legal procedures outlined in the abovementioned articles.

Failure to meet these requirements can delay the eviction process, result in dismissed evictions, or result in legal consequences for the landlord. Even with simple property arrangements, maintaining connections with legal counsel can be critical – and much more affordable than what you stand to lose.

Compliance with Just Cause Protections

Under AB 1482, landlords must demonstrate “just cause” for evictions, which applies to many ADU tenancies unless the property qualifies for an exemption. Examples of valid just cause reasons include:

• At-Fault Evictions: Nonpayment of rent, lease violations, or illegal activities on the property.
• No-Fault Evictions: Circumstances such as the landlord moving into the unit or withdrawing the property from the rental market.

Landlords managing ADUs should also be aware of additional requirements under AB 1482:

• Relocation Assistance: For no-fault evictions, landlords must often provide relocation assistance or waive the tenant’s final month of rent.
• Owner-Occupied Exemption: If the landlord resides on the property and the ADU falls within an exempt category (e.g., a single-family home with a single ADU), AB 1482 just cause protections may not apply. However, the landlord has the burden of proof to demonstrate this exemption in court if challenged.

Common Tenant Defenses Used to Contest Evictions

Tenants in ADUs can leverage several legal defenses to contest eviction attempts, often focusing on the specific circumstances of shared properties and landlord obligations. 

Key defenses include:

1. Improper Notice: Tenants may argue that the landlord failed to provide adequate notice or did not follow the required legal procedures for delivery and content.
2. Habitability Issues: Tenants can claim that the ADU violates habitability standards, such as inadequate heating, plumbing, or safety features. Shared utilities and spaces often exacerbate these disputes.
3. Retaliation Claims: If the tenant believes the eviction is retaliatory—for example, following a complaint about the property’s condition—they can use this as a defense.
4. Discrimination Allegations: Claims that the landlord’s eviction actions were motivated by discrimination based on race, religion, family status, or other protected categories.
5. Local Ordinance Violations: In cities with additional tenant protections, tenants may assert that the landlord violated specific local requirements, such as mandatory relocation assistance or restrictions on no-fault evictions.
6. Misclassification of Exemptions: Tenants may challenge the landlord’s claim of exemption from AB 1482 protections, requiring the landlord to prove compliance with exemption criteria.

Operational Considerations for Landlords

Managing Accessory Dwelling Units (ADUs) involves unique operational challenges regarding leases, maintenance, insurance, and communication. This is especially so for independent landlords who lack large support teams or legal resources.

Best Practices for Lease Agreements

Though we covered this in a previous section, it’s worth noting again. Lease agreements for ADUs should address the specific dynamics of shared spaces and clarify both landlord and tenant responsibilities.

Maintenance and Habitability

Landlords are legally obligated to maintain an ADU in compliance with local codes. Key considerations include:

• Routine Inspections: Schedule periodic inspections to ensure the ADU remains habitable and compliant with safety standards. Focus on plumbing, heating, electrical systems, and ventilation.
• Preventative Repairs: Address minor issues promptly before they escalate into habitability claims.
• Shared Utility Maintenance: If utilities are shared, ensure systems are properly functioning and accessible to both tenants and the landlord. Landlords should familiarize themselves with local building codes specific to ADUs, as noncompliance can result in fines and limit eviction options.

Insurance Concerns Unique to ADUs

Insurance needs for ADUs differ from traditional rental properties and require consideration.

• Verify Coverage for ADUs: Standard homeowner insurance policies may not automatically cover ADUs. Landlords should confirm with their provider or consider specialized landlord insurance, including liability and property damage specific to rental units.
• Liability Protection: Shared spaces increase the risk of liability claims, such as injuries occurring on shared property. Ensure the policy includes sufficient liability coverage.
• Tenant Renters Insurance: Encourage tenants to carry their own renters insurance to protect personal belongings and provide an added layer of liability protection. Proper insurance safeguards the landlord against unexpected costs while maintaining the viability of the ADU as a rental asset.

Communication Strategies

The close proximity between landlords and ADU tenants makes communication essential for fostering positive relationships and resolving disputes effectively. 

Practical approaches include:

• Set Clear Expectations Early: Discuss the house rules, shared space usage, and landlord-tenant boundaries at the start of the tenancy.
• Document All Interactions: Keep a written record of communications regarding maintenance requests, disputes, or policy changes to avoid misunderstandings.
• Address Disputes Promptly: Resolve noise complaints or boundary violations immediately. Use direct, respectful communication to avoid escalating tensions. Mediation services can provide an impartial resolution method for disputes related to shared spaces and help preserve a professional relationship.

Recap of Challenges and Opportunities

Accessory Dwelling Units (ADUs) are vital to California’s rental market, offering a creative solution to the state’s housing crisis. They represent an opportunity to maximize property use and generate additional income. 

However, ADUs also present unique challenges, particularly in eviction scenarios. Shared spaces, tenant protections, and complex zoning laws demand careful and proactive attention.

Actionable Takeaways

Landlords should focus on these key practices:

• Stay Informed: Regularly review updates to state and local laws affecting ADUs, including tenant protections like AB 1482 and local ordinances.
• Tailor Lease Agreements: Customize lease terms to reflect the unique dynamics of ADUs, particularly regarding shared spaces and maintenance responsibilities.
• Maintain Compliance: Ensure the ADU meets all habitability and zoning requirements to avoid tenant disputes or legal challenges.
• Invest in Insurance: Secure specialized coverage for ADUs to protect against liability and unexpected property damage.
• Foster Communication: Build and maintain clear lines of communication with tenants to address disputes and maintain a positive relationship.

Mehigan Law – Professional Eviction Legal Services

Mehigan Law has served California’s property management and independent landlord communities for over 45 years. We take pride in our ability to give your business and each case the personal attention it deserves.

We understand that every business and property environment is different. Each requires a thorough understanding of the unique challenges and needs in order to successfully manage eviction compliance. We consider all overlapping layers of legal jurisdiction and help you efficiently navigate disruptions to normal business operations. 

Contact us today to set up a consultation or ask questions about a specific eviction challenge you’re facing. We handle notices, Unlawful Detainer filings, litigation, and court processes. We’re ready to assist, whether it’s laws, policy, procedure, or the eviction process.