Renting out an ADU in California: tenant laws, AB 1482 and leases

Renting out an ADU: the rules that apply

California's landlord-tenant chapter applies to everyone who rents a dwelling, with an exception for hotel-style stays subject to transient occupancy tax. An ADU rented for a month or a year is a dwelling. The rules sort into two groups:

Our guide to ADU rental income in San Diego covers rents, payback, Section 8 and taxes. This guide goes deeper on the tenant rules.

AB 1482 and ADUs: the exemptions, one by one

The Tenant Protection Act has two parts with separate exemption lists. The just-cause rule applies once a tenant has lawfully occupied a unit for 12 months; after that, you need a legal reason, stated in the notice, to end the tenancy. The rent cap limits increases to 5% plus the local change in the cost of living, or 10%, whichever is lower, in any 12 months, and in no more than two increments. In San Diego the inflation figure is the San Diego-area consumer price index. Both sections are set to expire on January 1, 2030.

The 15-year new-construction exemption

Both sections exempt “housing that has been issued a certificate of occupancy within the previous 15 years.” This is the exemption that matters most for a new ADU. Any ADU finished in the past 15 years is generally outside both the rent cap and the just-cause rule, and one finished in 2026 stays exempt for as long as AB 1482 is in force. The exemption follows the unit's certificate of occupancy, so an older main house on the same lot may still be covered. Keep a copy of the ADU's final inspection or certificate of occupancy with your rental records.

The owner-occupied single-family exemption

The just-cause section exempts a single-family home where the owner lives and rents out no more than two units or bedrooms, “including, but not limited to,” an ADU or junior ADU. Rent the ADU and a spare room and you're still within it; add a third rental and you aren't. This exemption appears only in the just-cause section. The rent cap has no owner-occupancy exemption.

Two exemptions that don't help ADU owners

• Owner-occupied duplex. Both sections exempt two units in one structure where the owner lives in one, but only if “neither unit is an accessory dwelling unit or junior accessory dwelling unit.”
• Individually owned single-family home. A unit “alienable separate from the title to any other dwelling unit,” owned by an individual rather than a corporation or REIT, is exempt if the tenant gets the statutory written notice. A house and ADU on one lot normally share a title, so this is hard to claim. If you split them as condominiums, which the City of San Diego allows, get legal advice on how it applies.

Rent increases need advance notice even when the cap doesn't apply. For a month-to-month tenant, state law requires at least 30 days' notice for an increase of 10% or less and 90 days for more than 10%, counting all increases in the prior 12 months.

San Diego's Tenant Protection Ordinance and ADUs

The City of San Diego's Residential Tenant Protection Ordinance took effect June 24, 2023. According to the Legal Aid Society of San Diego's guide, it mirrors the state exemptions, including the owner-occupied single-family home renting up to two units such as an ADU, and housing with a certificate of occupancy within the previous 15 years. Where it applies, it goes further than state law:

• Who counts as a tenant. The ordinance covers the right to occupy for more than 30 days, but not a fixed-term lease of three months or less, including an extension or renewal of one.
• Bigger relocation payments. For a no-fault termination, you pay two months' actual rent, or waive it. For a tenant who is 62 or older or disabled, it's three months. State law requires one month.
• Moving back in yourself. For leases signed on or after June 24, 2023, owner move-in is a valid reason only if the tenant agrees in writing or the lease lets you end it to occupy the unit. If you might want the ADU for family later, put that clause in the lease.
• Written notice of rights. Covered landlords must give tenants a notice in at least 12-point type, plus the San Diego Housing Commission's Tenant Protection Guide, as a lease addendum or signed notice.
• Penalties. A wrongful eviction can cost at least three times the tenant's actual damages, and unpaid relocation assistance at least three times the amount owed.

ADU security deposit limits

AB 12 rewrote the deposit cap for deposits collected on or after July 1, 2024. Civil Code § 1950.5 now limits a deposit to one month's rent, on top of the first month's rent. A small landlord may take two months if both are true:

• The landlord is a natural person, or an LLC whose members are all natural persons.
• The landlord owns no more than two residential rental properties with no more than four rental units in total.

A homeowner renting out one ADU usually qualifies. The two-month allowance doesn't apply if the tenant is a service member.

Repairs, habitability and entry

A rental is legally untenantable if it lacks the basics listed in Civil Code § 1941.1: weatherproof roof, walls, windows and doors; working plumbing, gas, heating and electrical; hot and cold running water connected to sewer; clean grounds free of pests; enough trash containers; and safe floors, stairs and railings. For leases entered into, amended or extended on or after January 1, 2026, the list also includes a working stove and a working refrigerator. A recalled appliance doesn't count, and you must repair or replace it within 30 days of notice.

If you don't fix a problem, the tenant can repair it and deduct the cost from rent, up to one month's rent and no more than twice in 12 months. Acting after 30 days' notice is presumed reasonable; an urgent problem can justify less.

Living a few yards away doesn't give you the right to drop in. You may enter for repairs, inspections, showings or emergencies, during normal business hours, with written notice; 24 hours is presumed reasonable. A shared yard or laundry area is easier to manage if the lease spells out who uses what and when.

These standards are also a building question. An ADU built with a full kitchen, separate meters and good access to shared utilities is easier to rent and maintain; our ADU inspection checklist shows what the city checks before you can occupy it.

What to put in an ADU lease

A written ADU lease heads off most disputes. Cover:

• The term. In the City of San Diego, every ADU rental must be at least 31 consecutive days. See our ADU short-term rental guide for the rules on furnished monthly stays.
• Utilities. Say who pays water, sewer, gas, power and trash. Without separate meters, state how shared bills are split.
• Shared spaces. Yard, driveway, parking, laundry and storage.
• Exemption notices. If you rely on the individually owned single-family exemption, the statutory notice must be in the lease. If the San Diego ordinance applies, attach its notice and the Tenant Protection Guide.
• Owner move-in clause if you may want the unit back for yourself or family (see above).
• Deposit and move-in condition. State the deposit amount, and take dated photos at move-in.
• Entry and repair requests. How the tenant reports problems and how you give notice to enter.

Screen every applicant the same way. California law bars refusing a tenant because they pay with a housing voucher, and when you apply an income test to a voucher holder you may count only the tenant's share of the rent. Tell your insurer before the tenant moves in; our ADU insurance guide covers landlord policies.

Ending an ADU tenancy

To end a month-to-month tenancy you must give written notice: 60 days if every tenant has lived there a year or more, 30 days if anyone has lived there less than a year. Then check whether just cause applies:

• Exempt from AB 1482 and the city ordinance: the notice period is the main requirement.
• Covered by AB 1482 only: the notice must state an at-fault or no-fault reason. For a no-fault reason, such as moving in yourself or taking the unit off the market, you owe one month's rent in relocation help, paid within 15 days or waived as the final month, and the notice must say so. A notice that doesn't strictly comply is void.
• Covered by the San Diego ordinance: two or three months' rent in relocation help, and a written warning with a chance to fix a curable lease violation before a 3-day notice to quit.

If the tenant doesn't leave, you have to ask the court for an order. Locking a tenant out, removing doors or shutting off utilities to force a move is illegal, with penalties of up to $100 a day and at least $250 per violation, plus damages and attorney's fees.

Still planning the unit? Compare verified ADU builders in San Diego, check a contractor's license and read California ADU laws before you design for rental use.

Common questions