How to Legally Rent Out an ADU in Los Angeles in 2025 (Without Getting Fined)
Quick Answer for 2025 You can legally rent out your ADU (Accessory Dwelling Unit) in Los Angeles as a long-term rental only—short-term rentals like Airbnb are prohibited citywide. Your ADU must have a Certificate of Occupancy, meet all building codes, and comply with California's AB 1482 rent control laws. New ADUs built after 1978 are exempt from LA's Rent Stabilization Ordinance for 30 years.
What is an ADU and Can You Rent It Out in Los Angeles?
An Accessory Dwelling Unit (ADU) is a secondary housing unit on your property—such as a converted garage, basement apartment, backyard cottage, or attached in-law suite. In Los Angeles County cities including Pasadena, Glendale, Santa Monica, and Beverly Hills, ADUs have become increasingly popular as property owners seek additional rental income.
The short answer: Yes, you can legally rent out your ADU in Los Angeles, but only as a long-term rental of 30+ days. ADUs are completely prohibited from short-term rental use, even if your main house qualifies for Airbnb or Vrbo listings.
Los Angeles ADU Rental Income Potential in 2025
ADU rental income in Los Angeles varies significantly by neighborhood:
West Side (Venice, Santa Monica, Culver City): $2,500-$4,500/month
Central LA (Hollywood, Silver Lake, Los Feliz): $2,200-$3,800/month
San Fernando Valley (Sherman Oaks, Studio City, Encino): $2,000-$3,200/month
East LA (Highland Park, Eagle Rock, Pasadena): $1,800-$2,800/month
South LA areas: $1,500-$2,500/month
Step-by-Step Guide: How to Legally Rent Your ADU
Step 1: Verify Your ADU is Fully Permitted
Before accepting any tenants, confirm your ADU has proper legal status:
Required Documentation:
Certificate of Occupancy from LA Department of Building and Safety (LADBS)
Final inspection approval for electrical, plumbing, and fire safety
Zoning compliance verification
Separate utility connections (if required by permit)
How to Check: Visit the LADBS online portal or call (213) 482-7077 to verify your ADU's permit status. Properties without proper permits face fines up to $500 per day.
Step 2: Understand Which Rent Control Laws Apply
LA Rent Stabilization Ordinance (RSO):
ADUs built after October 1978 are exempt for 30 years from RSO rent control
This exemption applies even if your main house is rent-controlled
After 30 years, the ADU becomes subject to RSO if still renting
California AB 1482 (Statewide Rent Control):
Applies to ALL ADUs regardless of RSO exemption
Limits annual rent increases to 5% plus inflation (capped at 10% total)
Provides just-cause eviction protections after 12 months of tenancy
Requires specific lease disclosures about rent caps
Step 3: Create a Legal Rental Agreement
Your ADU lease must comply with both state and local laws:
Essential Lease Components:
Clear statement that property is an ADU
AB 1482 rent increase limitations disclosure
30+ day minimum rental period requirement
Maintenance and repair responsibilities
Utility payment arrangements
Parking allocation (if applicable)
Emergency contact information
Recommended Resources:
California Association of Realtors (CAR) residential lease forms
Local housing authority approved lease templates
Consultation with a real estate attorney for complex situations
Step 4: Market Your ADU Legally
Permitted Marketing Channels:
Craigslist (30+ day rentals only)
Zillow Rental Manager
Apartments.com
Facebook Marketplace (long-term housing)
Local newspaper classifieds
Prohibited Marketing:
Airbnb, Vrbo, or any short-term rental platforms
"Vacation rental" or "corporate housing" under 30 days
Marketing as "hotel alternative" or "extended stay"
Common ADU Rental Violations and Penalties
Short-Term Rental Violations
Penalty: Up to $500 per day, plus potential legal action Violation: Renting ADU for less than 30 consecutive days
Unpermitted ADU Operations
Penalty: $200-$500 per day until compliance Violation: Renting without Certificate of Occupancy or proper permits
Rent Control Violations
Penalty: Triple damages plus attorney fees Violation: Exceeding AB 1482 rent increase limits or improper evictions
Building Code Non-Compliance
Penalty: $100-$1,000 per violation, potential red-tagging Violation: Safety code violations, unpermitted modifications, or overcrowding
ADU Rental Tax Implications
Income Reporting:
ADU rental income is taxable as regular income
Deductible expenses include maintenance, repairs, insurance, and depreciation
Consider separate utility metering for accurate expense tracking
1031 Exchanges:
ADUs may qualify for like-kind exchanges when selling investment property
Consult tax professional for complex scenarios involving primary residence + ADU
Neighborhood-Specific Considerations
West Hollywood
Additional local rent control ordinances may apply
Stricter tenant protection laws than LA city limits
Pasadena
Separate city permitting requirements
Local housing department oversight distinct from LADBS
Santa Monica
Extremely strict rent control (ADUs may still have 30-year exemption)
Additional registration requirements for rental properties
Glendale
City-specific ADU design standards
Local business license may be required for rental activities
Maximizing Your ADU Investment Value
Property Value Impact: Homes with permitted ADUs typically sell for $150,000-$300,000+ more than comparable properties without ADUs, depending on neighborhood and ADU size/quality.
Income Optimization Strategies:
Professional property management (typical cost: 8-12% of monthly rent)
Furnished vs. unfurnished rental analysis
Utility inclusion vs. separate billing assessment
Regular market rent analysis to stay competitive within legal limits
Frequently Asked Questions
Can I rent my ADU to family members? Yes, but the same legal requirements apply, including proper permits and lease documentation.
What if my ADU was built before getting permits? You must obtain permits retroactively before legally renting. LA offers amnesty programs periodically to help unpermitted ADU owners come into compliance.
Can I use my ADU for office space instead of residential rental? This depends on your specific ADU permit and local zoning. Many ADU permits restrict use to residential only.
Do I need landlord insurance for my ADU? While not legally required, separate dwelling unit coverage is highly recommended to protect against liability and property damage.
Next Steps: Start Renting Your ADU Legally
Verify permits and inspections through LADBS online portal
Research comparable ADU rents in your specific neighborhood
Draft compliant lease agreement using CAR forms or attorney consultation
Screen tenants thoroughly following fair housing laws
Consider professional property management if managing remotely
For property owners considering building an ADU or selling a home with ADU potential, permitted ADUs significantly increase property values across all LA neighborhoods. Whether you're in Brentwood, Koreatown, or the San Gabriel Valley, understanding these rental regulations ensures you can capitalize on your investment while staying compliant with city and state laws.
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