After your final inspection, your ADU is ready for move-in! This might be you, a friend, a family member, or a tenant. There are many benefits to sharing your property with a tenant, but renting also comes with many responsibilities – make sure you have a good sense of the laws governing rental agreements and think about the issues that might arise from welcoming a new neighbor into your space.
Timeline
Most ADU projects take 12-18 months to complete, but some extend to 24 months or more.
Key Resources for Move-In & Renting
These nonprofits help with finding a tenant:
Video: Lease Agreement Tips
FAQs
Here are a few of the most frequently asked questions about moving in and renting your ADU.
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As soon as the final inspection is complete, your ADU is ready for occupants! With the final inspection, you should have utility service, a new address established, and clear, weatherproof access to the front door. If you’re renting it out, be sure to update your homeowner’s insurance policy and be prepared to pay taxes on the rent received. See below for more responsibilities of being a landlord.
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Renting an ADU comes with many responsibilities, including understanding local and state housing laws, executing a lease, finding and managing a tenant, and maintaining a rental property. It’s important to understand the laws as they may affect things like future rent increases, changing use over time, evicting tenants, and moving family into the unit.
See our Workbook and Exercises for resources on understanding rental laws, tenants’ rights, and more.
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No. Napa and Sonoma County properties with ADUs and JADUs must file a deed restriction agreeing that the unit will not be used for short-term rentals (less than 30 days). This discourages the listing of ADUs on popular websites like Airbnb and VRBO and promotes them as a means to increase housing stock for the diverse needs of county residents.
Steps in the Process
BEFORE YOU BEGIN Confirm the new street address for your ADU – you’ll need this street address to establish utility services and to set up your lease.
Complete Preliminary Steps
Prepare to rent your unit by getting insurance, setting up utilities, and developing a plan to handle the finances.
Understand Rental Laws
You will need to understand all the laws related to being a landlord, especially with regard to discrimination. For an overview of California laws that regulate certain aspects of the rental housing market, review California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, published by the California Department of Consumer Affairs. You should also talk to local Planning staff about regulations that might apply.
KEY RESOURCES
Set the Rent
Maximizing the rent is often not the only consideration – setting a fair rent a bit under market rate will help you attract and keep good tenants. Consider pricing your unit so that it is affordable for the local workforce and families who may not be able to afford high rents in the city. A unit is considered affordable if a household is paying less than one-third of their income on their housing costs. Many homeowners are motivated to rent their ADU affordably to community members because they serve essential roles and often have difficulty finding housing that meets their needs. If you financed your construction with a loan, consider the loan length, interest rate and any reserve funds you have as well.
KEY RESOURCES
Write Your Lease
Make sure your lease (or rental agreement if it is month-to-month) clearly identifies all the expectations for you and your future tenant. See our Workbook and Exercises for help planning your lease.
KEY RESOURCES
Find Your Tenant
Research how to successfully advertise your unit and select a good tenant. Consider where to advertise the listing, if you’ll use a rental application, how you’ll assess the applicants (make sure you understand fair housing law for this step), and how you’ll run a credit check on possible tenants. Our Workbook has more information on all of these tasks.
If you want help finding a tenant, reach out to the nonprofits SHARE Sonoma or Napa Valley Community Housing.
KEY RESOURCES
Manage Your Rental Unit
Think through a long-term plan for the care and upkeep of your ADU, how shared responsibilities will be split, and how to address any issues that might occur with your tenant.
