How to hire an ADU contractor in California

Which license builds an ADU

The Contractors State License Board says plainly that “B – General Building Contractors can build or install ADUs.” A B license covers structures that need at least two unrelated building trades, which is every ADU: foundation, framing, electrical, plumbing, roofing.

• B, General Building. The right license for a new detached ADU, an attached ADU or a garage conversion. It can hire licensed specialty subcontractors.
• C-47, Manufactured Housing. Can install an ADU that's a manufactured home built off site.
• C specialty licenses (electrician, plumber, roofer). Can't generally manage a whole ADU build, though your B contractor will hire them.
• B-2, Residential Remodeling. Limited to existing wood-frame homes, with no changes to load-bearing walls and no new electrical or plumbing systems. That rules out building a new ADU.

Reading a license record

Look up any contractor on the board's Instant License Check or on our license check for San Diego County. On the state's record, check:

Make sure the name and license number on your contract match the record exactly. Ask to see the contractor's pocket license and photo ID, and confirm the person selling you the job works for the licensee.

What the contract must say

The board treats ADU construction as a home improvement project, so you're entitled to a written Home Improvement Contract. California law spells out what it must contain:

• The contractor's name, address and license number, and the salesperson's registration number if one sold you the job.
• The contract price, with any finance charge listed separately.
• A description of the work and the significant materials, plus approximate start and completion dates.
• A schedule of progress payments in dollars, each tied to specific work.
• A Mechanics Lien Warning and a notice of your right to cancel.
• Since January 1, 2026, the contractor's email address and phone number. You can now cancel by email.

You can cancel within 3 business days of signing, or 5 days if you're 65 or older. Any change to the work must be written and signed by both of you before the changed work starts.

Deposits and payments

A contractor can't take a down payment of more than $1,000 or 10% of the contract price, whichever is less. There's no exception for special-order materials. After that, the contractor may not ask for or accept payment that exceeds the value of the work done. Breaking either rule is a misdemeanor.

Source: CSLB ADU Fast Facts. Be careful about paying for “plans” or “permits” up front: confirm design costs with the architect and permit fees with the city, and don't pay a contractor for plans unless they've already paid for them.

Protecting yourself from liens

If your contractor doesn't pay a subcontractor or supplier, that company can record a mechanics lien on your home, even if you've paid your contractor in full. In the worst case you pay twice. The board recommends:

• Keep every preliminary notice. Subcontractors and suppliers must send one within 20 days of starting work to keep their lien rights. It tells you who to make sure gets paid.
• Collect lien releases. Get a conditional release before each payment and an unconditional release after it. The law lets you hold back further payments until you have them.
• Get the list of subcontractors up front. Since 2026 a home improvement contractor must give you their names, contact details and license numbers on request.
• Consider joint checks made out to both your contractor and a large supplier.
• File a Notice of Completion within 15 days of finishing. It shortens the time subcontractors and suppliers have to file a lien from 90 days to 30.

Workers' comp and the bond

Most contractors with no employees can still claim an exemption from workers' comp. A law that would have required it of every contractor in 2026 was pushed back to January 1, 2028. If a builder is exempt and a crew shows up on your property, ask who employs them and how they're insured. The City of San Diego warns owners they “may be held liable and subject to serious financial risk” for injuries to uninsured workers on their property. Ask every contractor for a certificate of insurance covering workers' comp and general liability.

Every contractor carries a $25,000 bond. A homeowner harmed by a license-law violation can claim against it, directly with the bonding company. It's a safety net, not insurance for your project: an ADU costs many times that, and the bond is shared by every claim against the contractor.

When ADU companies fail

• Multitaskr (Chula Vista) closed in 2024. San Diego homeowners were left with loans in their names for ADUs that were never finished; the average claim per ADU topped $200,000, against a $25,000 bond. The state revoked its license in 2025 and barred four officers for five years.
• Anchored Tiny Homes (Fair Oaks) shut down in August 2024, leaving hundreds of customers with unbuilt units.
• Nonna Homes (Rancho Cordova) had its bond canceled and its license suspended in January 2026.

All three held contractor licenses. A license is the minimum, not a guarantee, which is why the payment rules above matter as much as the license check.

Questions to ask

• “What's your license number, and is it a B?” Then check it yourself.
• “Who pulls the permit?” It should be the contractor. If you're asked to sign as an owner-builder, you take on the contractor's responsibilities.
• “Is the deposit $1,000 or less, and is every payment tied to finished work?”
• “Will you give me lien releases with every payment?”
• “Which subcontractors will you use, and what are their license numbers?”
• “Can you send a certificate of insurance?”
• “Who runs the utility connections?” Trenching for water, sewer and power is easy to leave out of a bid.

Get at least three written bids on the same plans. A bid far below the others is one of the board's red flags, along with cash-only deals, pressure to sign today and a contractor who says you don't need a written contract.

Common questions