What is an ADU?
An Accessory Dwelling Unit (ADU) is a small, fully functional residential unit located on the same lot as a primary home. Commonly referred to as granny flats, in-law suites, or backyard homes, ADUs may be detached, attached, or converted from garages or basements.
In California, ADUs have become a practical response to the state’s housing crisis. Whether you’re looking to house family members or generate rental income, ADUs offer flexibility, value, and affordability—especially when properly permitted and rented out legally.
Why Use an ADU Rental Agreement Template?
Renting out an ADU—whether it's short-term or long-term—requires a solid legal foundation. An ADU rental agreement template tailored for California ensures both landlords and tenants understand their rights and responsibilities under state law.
🔑 Key Reasons to Use an ADU Lease Template:
Legal Protection: Ensures compliance with California landlord-tenant laws, including disclosures, habitability, and rent control.
Clarity: Clearly defines rent, utilities, maintenance responsibilities, and occupancy limits.
Dispute Prevention: Reduces the chances of future conflicts through documented expectations.
Rental Compliance: Supports legal renting of a permitted ADU, avoiding fines or legal consequences.
What Should a California ADU Rental Agreement Include?
A comprehensive ADU rental agreement template in California should include the following key sections:
| Section | Description |
|---|---|
| Parties | Names of the landlord and tenant(s). |
| Property Description | Description and address of the ADU. |
| Lease Term | Start and end date of the rental period (or month-to-month). |
| Rent Amount | Monthly rent, payment due date, and method of payment. |
| Security Deposit | Amount collected and conditions for refund. |
| Utilities | Breakdown of who pays for electricity, water, internet, etc. |
| Maintenance & Repairs | Responsibilities for both landlord and tenant. |
| Rules & Restrictions | Pet policies, smoking rules, noise limits, etc. |
| Entry Notice | How and when landlords can access the property. |
| Signatures | Legal signatures of all parties with date. |
Where to Get an ADU Rental Agreement Template
You can find California-specific ADU lease templates through:
California Association of Realtors (CAR) – for members.
Online legal form providers like LawDepot, Rocket Lawyer, or LegalZoom.
Local city housing departments (some offer free templates tailored to local laws).
Property management software like Avail, RentRedi, or TurboTenant.
Make sure the template is California-compliant and includes state-required disclosures, such as lead-based paint information (for homes built before 1978) and habitability clauses.
Benefits of Building a Permitted ADU for Rental
Building a permitted ADU isn’t just about compliance—it’s also a smart investment. Here’s why:
| Benefit | Description |
|---|---|
| 💼 Legal Rental Income | Rent out your unit legally with fewer risks. |
| 📈 Higher Property Value | A permitted ADU boosts your home’s market value. |
| 🧾 Loan and Refinance Benefits | Easier to secure financing or refinance with a documented legal unit. |
| 🛠️ Safe Construction | Permits ensure your ADU meets all safety and building codes. |
| 🔑 Access to Insurance | Insurance policies require your unit to be permitted for full coverage. |
| 🏘️ Community Trust | Contributes to neighborhood stability and supports California’s housing goals. |
