What is an Accessory Dwelling Unit (ADU)?

An ADU is a secondary residential dwelling unit that can be located within or detached from the main residential structure on a single-family residential lot.

Aerial view of house roofs in suburban n

Revolutionize the Single-Family Residence

Simple renovations such as bathroom upgrades or kitchen re-layout are the usual methods implemented to enhance a house value. Nothing wrong with those approaches.  But the absolute best thing, bar-none, for homeowners to do is adding square footage to their homes, legally. 

And as of January 1, 2020, the California state law on Accessory Dwelling Unit (ADU) gave homeowners the chance to do so without interference by the local authority (state law trumps over city/county law). 

 

A simple summary made by California Association of Realtors (C.A.R.) regarding this new ADU law, can also be found here

 

In essence, homeowners are legally allowed to create additional space for their home, which will lead to increased intrinsic valuation of the homes.

Aerial View of a Houses

Types of ADU

Attached

An extension of the existing home structure, which is attached to the primary dwelling that may include full amenities.

Detached

An independent structure entirely separate from the primary dwelling that may include full amenities.

Junior (JADU)

A conversion of an existing garage or space, under 500 sq ft, within the main residential unit that may include full amenities.

How You Can Benefit from an ADU

Permitted Additional Space to Existing House

Opportunities to Generate Extra Income

Significantly Increase the Intrinsic Value of the Home

We Got You Covered from Start to Finish

Feasibility Study

Design

Permitting

Build

Permitting

In-House ADU

Financing Program

 At CHISEL & TOOL, we understand that finance is at the forefront of every important decision, especially for a wealth-altering product such as an ADU.  That's why we offer our proprietary financing program to our select homeowners.  Let us plan, design and build your ADU at no upfront cost and no interest to you.  

Program Highlights:

  • No upfront costs

  • 0% Financing

  • 10% of the ADU rental revenue payable to homeowner

  • 10-year lease agreement, with allowable sublease, of the ADU

  • Chisel & Tool appointed as ADU's property manager

  • ADU handover at the end of 10-year period at no cost

  • Early termination allowed by paying the full principal amount at zero interest

NOTE:  Chisel & Tool's In-House Financing Program is subject to Terms and Conditions.  

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Frequently Asked Questions | FAQ

  • Why are Southern California homeowners building ADUs?

    Southern California consists of many cities with home prices and rental prices that are deemed unaffordable for the general public.  There is a real housing crisis in the state.  ADU is designed to be part of the solution because it will put more rental supply on the market to counter the rising demand of housing in California.  The homeowners not only doing a great thing for the community, but they are also benefitted with recurring passive income and a sizeable capital gain on their properties.

  • What kind of property qualifies to build an ADU?

    ADU is mostly popular with single-family zoned properties.  However, homeowners with R-2 lots may also benefit from the ADU law.  Please click here for more details.

  • Is there a minimum lot size necessary to build an ADU on my property?

    No. In fact, the State Legislation prohibits local agencies from including in development standards for ADUs requirements on minimum lot size (CA Gov. Code, § 65852.2, subd. (a)(1)(B)(i)).

  • What is the maximum size of ADU allowed on my property?

    Maximum unit size requirements, established by any local municipality, must be at least 850 square feet and 1,000 square feet for ADUs with more than one bedroom. For local municipalities without an established ordinance, maximum unit sizes are 1,200 square feet for a new detached ADU and up to 50 percent of the floor area of the existing primary dwelling unit for an attached ADU. 

     

    The conversion of an existing accessory structure or a portion of the existing primary residence to an ADU is not subject to size requirements. For example, an existing house with a 1,500 square feet basement converted to an ADU would not be subject to the size requirements, regardless if a local government has an adopted ordinance.

  • What size ADU can I build?

    Please refer to the following guidelines for more details on ADU sizes.  Typically, ADU units are designed between 250 SF to 1,200 SF.  The “automatic” approval mandated by State Law is valid for units with 800 SF or under. The State Legislation prohibits a local agency from establishing a maximum size of an ADU of less than 850 square feet, or 1,000 square feet if the ADU contains more than one bedroom and requires approval of a permit to build an ADU of up to 800 square feet ((CA Gov. Code, § 65852.2, subd. (c)(2)(B) & (C)). A statewide exemption ADU is an ADU of up to 800 square feet, 16 foot in height and with 4-foot side and rear yard setbacks. ADU law requires that no lot coverage, floor area ratio, open space, or minimum lot size will preclude the construction of a statewide exemption ADU.

  • Where on my property can I build my ADU?

    ADU can be built from ground up in the backyard, either attached or detached from the main house, and it also can be built by converting space within the existing house structure (i.e. garage conversion, den conversion, etc.)

  • Can I build both an ADU and JADU on my property?

    Yes.  ADU law allows the construction of a detached new construction statewide exemption ADU to be combined with a JADU within any zone allowing residential or mixed uses regardless of zoning and development standards imposed in an ordinance.

  • Do I have to live in the ADU?

    If the ADU is approved between January 1, 2020 and January 1, 2025, then owner is not required to live in the property ((CAGov. Code, § 65852.2, subd. (a)(6)).

  • How many ADUs can I build on a single-family home property?

    Homeowners can potentially build an ADU and a JADU depending on the available space within the property.  An ADU can be accomplished by building an extension of the primary dwelling unit or by constructing a new stand-alone unit.  The JADU can be accomplished from converting an existing space within the primary dwelling unit (i.e. garage conversion, living room conversion, etc.).

  • Do I have to provide parking for the ADU?

    If an ADU is created through the conversion of a garage, carport or covered parking structure, then replacement of off-street parking spaces cannot be required by the local agency (CA Gov. Code, §65852.2, subd. (a)(1)(D)(xi)).

  • Can I sell my ADU without my house?

    No.  The ADU and the main house share one Assessor’s Parcel Number (APN).  Hence it is considered as ONE property.  Consider it as a typical Duplex.

  • Can my Homeowners Association stop me from building an ADU?

    No.  ADU laws are considered state laws therefore superseding any local municipality laws including HOA by-laws.  AB 670 provides that covenants, conditions and restrictions (CC&Rs) that either effectively prohibit or unreasonably restrict the construction or use of an ADU or JADU on a lot zoned for single-family residential use are void and unenforceable (CA Civil Code Section 4751).

  • Can I still convert my garage into an ADU if it is located less than 4 feet away from my property line?

    Yes, it is possible to do so. Check with your local planning department.  A local agency may allow the expansion area of a detached structure being converted into an ADU to have no setbacks, or setbacks of less than four feet, if the existing structure has no setbacks, or has setbacks of less than four feet. A local agency shall not require setbacks of more than four feet for the expanded area of a detached structure being converted into an ADU.

  • Does building an ADU turn my property into a duplex?

    Adding an ADU creates the essence that the single-family residence is turned into a duplex or triplex.  But a duplex (by traditional definition) contains 2 primary dwelling units, whereas ADU is considered an ACCESSORY dwelling unit.

  • Are ADUs good for first-time buyers in Los Angeles?

    ADU can be a source of passive income for first-time homebuyers.  Please consult with a CPA and/or Financial Advisor.

  • Where can I get a construction checklist of what items go into building an ADU?

    Once an approved design has been issued, the licensed contractor should make a price proposal based on the design.  Usually, the proposal comes with the detailed work list. Rest assured, at CHISEL & TOOL we provide all the necessary details and guide our clients from beginning to completion.

  • How much does it cost to build an ADU?

    The cost to build ADU varies greatly.  An attached ADU would naturally be the most expensive to build since it is a “ground-up” construction.  Whereas, a conversion would be the most cost efficient since the structure already exists.  Chisel & Tool makes it very easy for our clients to build their ADUs.  Please contact us for our Packaged ADU Program.  It is easier than buying a car.

  • What are the city fees involved in building an ADU?

    The fees charged by local municipalities will vary.  Contact the local planning / building department to get the most accurate information.  However, based on the ADU legislation, there is impact fee exemptions for ADU up to 750 square feet (Government Code Section 65852.2, Subdivision (f)(3)).  For ADU larger than 750 square feet, there will be impact fees charged in proportion to the size of the primary dwelling unit (Gov. Code, § 65852.2, subd. (f)(3)).

  • Is there a way to finance and save costs in building an ADU? 

    Absolutely. HELOC (Home Equity Loan), 2nd Mortgage, Personal Loan, or Chisel & Tool proprietary ADU financing. Contact CHISEL & TOOL for a complimentary consultation on your ADU needs.

  • How long does it take to build an ADU?

    The approximate time to BUILD an ADU is as follow:

    • Conversion: 3 to 6 months 

    • Attached: 6 to 9 months 

    • Detached: 9 to 12 months 

    The above time frame excludes the time to design and to apply for the permits. 

    The time frame is also largely affected by size of the ADU.

  • Are modular or pre-fabs cheaper?

    Modular and/or Pre-Fab ADUs can be more cost efficient in certain parts of California where access to building materials are not readily available.  There are also some hard to reach sites that may be much better suited for modular / pre-fab ADUs.  But for the most part, a site-built ADU should be competitive in cost. 

  • Can I connect ADU utilities to my existing home?

    ADU’s utilities will usually come from the same source as the main house.  They are all interconnected.  Please contact the local utility companies for exact details.

  • Do ADUs require solar panels?

    The latest CA Energy Code (Title 24) requires newly constructed detached ADUs to have solar panels installed.  The panels can be installed on the ADU or on the primary dwelling unit (i.e. main house).  However, conversions of existing space into an ADU are not subject to this requirement. Please visit CEC’s website www.energy.ca.gov to obtain a more thorough and accurate answer regarding the solar panel requirements.

  • Does my ADU have a separate address and mailbox?

    It is possible to have a separate mailing address for the ADU.  Please check with the local planning / building department.  Usually, the ADU address would have “½” added to the address. 

  • Does building an ADU on a single-family property make my home subject to rent control?

    Rent control is applicable based on the local municipality where the property is located.  ADU does not affect rent control one way or another.

  • Will my property tax go up with the new ADU?

    Property Tax is assessed by an assessor.  Please contact a CPA and/or Attorney for a more accurate information on this matter.  Although, do not miss the bigger picture of building an ADU.  The capital gain obtained by having an ADU should be more than enough to offset any increased in property tax.  ADU is also good for the local community to ease housing constraints. 

  • Is it a good investment to build an ADU?

    At Chisel & Tool, we strongly believe that ADU is a good investment, both financially and socially.  The difference between the cost per square foot to build versus the market price of living space per square foot should give a good indication of the investment value of an ADU.  Not to mention that a homeowner is contributing in assisting the local communities to ease the housing crisis.

  • Your ADU Financing option seems too good to be true. What's the catch?

    At Chisel & Tool, we believe that a successful business must provide benefits to its clients while producing profit.  Any business that gears itself to one extreme cannot be successful.  A business that only gives clients the benefits without producing any profit will not exist for long (unless it is a non-profit organization that relies on donations).  On the other hand, a business that only focuses on its bottom line will be shun by potential clients.  

     

    Our ADU financing program is designed for 3 reasons:

     

    1. Promote the construction of ADU to assist CA housing crisis

    2. Provide homeowners the ability to obtain passive income stream and giving the possibility of increased property value

    3. Allowing Chisel & Tool to normalize its revenue through rental proceeds coming from the ADU financing program 

     

    Please note that the ADU financing program is only available to qualifying homeowners.  Please contact us for more information.

© 2020 by CHISEL & TOOL

Bliss Holding Group Inc. dba Chisel and Tool

CA CSLB License 904522

D-U-N-S 82-653-7180

CA DRE License 01351574

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