Unpermitted ADU Risks: Finding Solutions

There are endless reasons to convert a garage in Los Angeles. From music studios to offices, man caves to yoga studios, rec rooms or she-sheds, homeowners have been converting garages to other types of spaces forever. In fact, some even add bathrooms and kitchens, creating full-on Accessory Dwelling Units used to house family members or as rental units.

And with home prices high as ever, it should be no surprise that many of these Los Angeles garage conversions are illegal, done without the appropriate permits. Having an unpermitted ADU can lead to fines, legal issues, and the requirement to remove the unpermitted structure. It may also affect property resale value and make it challenging to obtain insurance or financing. It’s crucial to ensure all regulations are met for a hassle-free experience.

But it’s never too late to get your paperwork straight. To that end, this guide helps give you the information you need to dot your Is, cross your Ts, and properly legalize your illegal garage conversion. 

Here at GreatBuildz, a free service that connects homeowners in Los Angeles, Orange County, Ventura or San Diego with reliable general contractors, we get inquiries every day about legalizing unpermitted ADU garage conversion projects – here are some tips to get you started.

Key Takeaways

  • With new ADU laws in effect, there’s a 5-year grace period for homeowners to legalize unpermitted garage conversions in Los Angeles without fines. Legal ADUs enhance property value and can be rented out legally.
  • Most garages are eligible for conversion into an ADU, especially if they were permitted when built. However, exceptions may apply based on factors like hillside locations or high-fire areas. Consulting with an architect or the city’s building department is crucial.
  • Creating detailed plans, including structural, framing, and energy efficiency elements, is a vital step. Costs for plans range from $4,000-$12,000. Meeting with ADU contractors helps estimate project costs and identify potential challenges.
  • After confirming eligibility and having plans in place, submitting them to the city building department is the next step. Simultaneously, obtaining detailed cost estimates from ADU contractors helps in selecting the right professional for the job.
  • Construction costs for legalizing a garage conversion without permit vary based on the original quality of the work. The process involves inspections, corrections, and potential upgrades to meet current building standards. Costs range from $20,000-$70,000, considering the extent of required work.
  •  New laws, such as AB 1033, allow the sale of ADUs independently from the main residence. However, challenges exist in implementing this rule, requiring property conversion into a “condominium.” AB 976 permanently prohibits owner-occupancy limitations, while AB 434 mandates California cities to have a pre-approved ADU plan program by 2025, simplifying the planning process.

Unpermitted ADU Los Angeles Garage Conversion: What You Need to Know

Many of these illegal garage conversions have been created in LA and surrounding areas without the necessary permits, and now, a large portion of these homeowners are thinking about legalizing their units. Now that new ADU laws are in effect starting January 1, 2020, the state and city are encouraging people to legalize their Los Angeles unpermitted garage conversions and have given a 5-year grace period to complete this without imposing a fine for illegal garage conversion, etc. So, folks are starting to realize it’s worth the costs to legalize their unit rather than keep ‘hiding’ their unpermitted garage space.  A legal ADU can be rented to a tenant without issue and clearly adds value to the property at the time of sale, unlike unpermitted space.

 There is some really good news with regard to legalizing unpermitted Los Angeles garage conversions. In a majority of cases, the garage itself is ‘eligible’ to be converted into an ADU. Assuming your garage was permitted when it was originally built, you should be within your right to convert it into an ADU (for a detached garage) and Junior ADU or JADU (for an attached garage). Even if your garage doesn’t meet current setback requirements from your property line, it should be ‘grandfathered-in.’ 

There will be some exceptions, like a hillside or high-fire areas, so it’s important to confirm your property qualifies by speaking to either a knowledgeable architect or the city’s building or planning department (in the city of LA, speak with the Building Department, Zoning Section). Another piece of good news with the recent ADU legislation is that you do not have to provide any new parking on your property when converting your garage to ADU.

Let’s discuss the steps involved in legalizing your unpermitted garage conversion. As discussed above, your first step is to confirm your garage is eligible. Once you have confirmed this, the next step is to hire an architect/designer to create the plans for you and meet at least one ADU contractor to discuss the rough scope and costs.

Create a Set Of Plans

The city requires you to create a set of plans for your Los Angeles garage conversion. These plans are drawn to show your garage conversion meeting today’s building codes and guidelines. So, the plans will include such elements as structural and framing details, windows & walls, energy efficiency (title 24), and other notes. An architect will measure your space and create these plans with the help of a structural engineer, as needed. This will be the plan submitted to the city building department to secure a permit. You can expect these plans to cost between $4,000-$12,000. An ADU Contractor can also help with this task. 

Meet With Your Contractor

Unpermitted ADU Risks: Finding Solutions 1

 You should definitely meet with an ADU contractor as well. The ADU contractor can look at your garage and give you some ideas/thoughts regarding the costs involved, the construction process, and the potential “unknowns.” Depending on how well or poorly your unpermitted garage conversion was built, there may be a substantial disparity between the costs to legalize. For example, is there insulation in the walls? Is the existing sewer line adequate? Are the foundation footings deep enough? Are there structural/framing improvements that will be required?

Based on what they see, a good contractor can give you a sense of the likelihood and costs of these unknowns. It’s important to know this so you can budget appropriately to legalize your ADU and not be shocked after you create plans and pull a permit.

Submit Your Plans

Once you have some idea of the budget and a set of plans, the next step is to submit these plans to the city building department.  In less than 60 days, you should receive a garage conversion permit to start (or corrections to make to your plans). While your plans are in plan check, you can provide them and any other scope of work you want to include to several garage conversion contractors so they can prepare detailed cost estimates for you. Once you select your favorite garage conversion contractor and sign a contract, you’re ready to start construction.

Compare Your Contractors’ Bids

The next step is to compare your contractors’ bids. Be careful not to just look at the price but also carefully compare the scope of work. Bids can be very inconsistent among contractors. Let’s face it: when you meet with three different people, they may hear three different things. That’s why it’s important to carefully review and compare all bids for consistency.

Another thing to look for when comparing contractor bids is the inclusion of material costs. You can be confident that all the bids include the costs of rough materials like lumber, drywall, nails, etc., but there is no standard practice for the inclusion of finish materials like lights, faucets, flooring, tile, etc. Some contractors exclude all of these and have a note that says that the client is responsible for selecting/paying for these materials.

Other bids will have a maximum “allowance” included that covers up to a certain amount for each material. Although it’s not terribly important how each contractor details their bid, you will need to spend the time to ‘spread’ or compare the bids in order to get to an ‘apples to apples’ comparison. It can be a good idea to start with your own ADU checklist to ensure everything is included.

Start Building Your Los Angeles Garage Conversion

Unpermitted ADU Risks: Finding Solutions 2

At the very beginning of construction, your ADU contractor will call for an initial city inspection.  The city inspector will want to see how your unpermitted garage conversion compares to your plans (and current code), so you might ask the contractor to remove some areas of drywall to ‘see inside’ the walls.

They will be looking to check the adequacy of framing, electrical, plumbing, insulation, etc. They may also ask to see the depth of your foundation footings.  Based on what he/she sees, the inspector will issue a set of ‘corrections’ your contractor will have to make in order to proceed. As we discussed above, these ‘unknowns’ could be minor or major depending on the original construction quality.

The costs can vary significantly based on the existing condition and quality of the ADU. To give you some idea, a brand-new Los Angeles garage conversion to ADU costs approx. $90,000-$120,000. That number includes taking a standard garage and adding everything necessary to create a dwelling:

  • Kitchen
  • Bathroom
  • Appliances
  • Walls
  • Windows
  • Flooring
  • HVAC
  • Plumbing
  • Electrical
  • Structural framing

When legalizing a garage conversion, presumably, some of this work has already been completed and can be saved. So, depending on the extent of work needed, the construction costs of legalizing this space will likely range from $20,000-$70,000. 

The Major Costs of Legalizing Your ADU

Unpermitted ADU Exterior

The cost of legalizing and permitting an ADU can range quite a bit, as discussed above ($20-$70k), and this is largely based on the original quality of the work and when it was completed. The city inspectors will require your ADU to be up to today’s building standards (the building code). So, it’s possible that if your work was done recently, much of it could be acceptable (copper plumbing, etc). However, if the work was done long ago, it’s unlikely it will meet today’s building code.

A few items that might require a large portion of the budget are as follows:

  • Your ADU waste lines must be connected directly to your sewer lateral in the front yard. If the original unpermitted were instead connected through your main house, it will need to be re-routed.
  • An ADU must have an electrical panel and electrical meter, so it is likely this was not done previously and needs to be completed.
  • Current building code often requires that exterior walls be shear walls (framed out with plywood). It’s quite possible your existing construction doesn’t include this element and needs upgrading.
  • Depending on the age of the structure, your foundation may or may not be deep enough to suffice. If the building is old and the foundation is insufficient, you may be required to install deepened footings or underpin the foundation in some places.

How to Find the Right ADU Contractor to Legalize Your Los Angeles Garage Conversion

It’s best to search for only local, licensed General Contractors. No other contractors are qualified or equipped to do this sort of construction, and using an unlicensed contractor or handyman would be a mistake.  Any contractors you contact, always confirm they have experience with illegal or unpermitted ADUs. You’ll want to hire a contractor who has done this before and, therefore, knows the potential issues/pitfalls.

 There are several other important criteria you should use in selecting an ADU contractor.

  • Check for a valid contractor’s license on the Contractors State License Board website to confirm it is active, there are no disciplinary actions, and it has Worker’s Compensation insurance associated with it (assuming the GC has employees). 
  • Make sure they’re insured and get a copy of their insurance certificate.
  • Ask your contractor for at least three references you can call.
  • Read their reviews online on Google & other contractor search engines. If you want more tips on how to find and vet an ADU contractor, check out my blog: 10 Tips To Hire an ADU Contractor

Why Legalize an Unpermitted ADU?

As you can already tell, legalizing and obtaining an unpermitted ADU takes a reasonable amount of time, effort, and money. But, for many homeowners, it can be well worth it. Once you legalize an unpermitted ADU, it adds considerably to the value of your home as it is considered an official part of your property. Also, once you legalize an unpermitted ADU Los Angeles, you can legally rent it out to a tenant and earn rental income. Just remember to make sure to call your insurance agent and tell them that you need to add your new legal ADU to the property coverage.

Common Challenges and Solutions

Below, we dive into some common challenges you may come up against when legalizing a garage conversion, offering solutions you can use.

Structural Compliance

Challenge: Unpermitted conversions may lack structural integrity, posing challenges in meeting current building codes.
Solution: Engage a qualified contractor to assess structural requirements and make necessary improvements during the legalization process.

Unknown Construction Quality

Challenge: The original garage conversion’s construction quality may vary, leading to uncertainty in costs and scope.
Solution: Prioritize a comprehensive inspection by an ADU contractor to identify potential issues, allowing for a more accurate budget and timeline.

Cost Variability

Challenge: Legalization costs can fluctuate based on the extent of required upgrades and compliance measures.
Solution: Create a detailed budget, considering potential unknowns, and obtain multiple contractor bids for a comprehensive cost comparison.

Parking Requirements

Challenge: Previous regulations demanded additional parking spaces, impacting property layout.
Solution: New ADU laws have alleviated parking constraints, removing the need for extra spaces when converting a garage into an ADU.

Permitting Process

Challenge: Navigating the permitting process can be complex and time-consuming.
Solution: Hire experienced professionals, including architects and contractors, to assist with permit applications, ensuring a smoother and more efficient process.

Insurance Implications

Challenge: Unpermitted structures may affect property insurance coverage and claims.
Solution: Notify the insurance provider of the ADU legalization, ensuring adequate coverage for the newly legalized space.

New ADU Laws for 2024:

AB 1033

The October 2023 AB 1033 law has excited the press. This law allows an ADU to be sold independently from the main residence, which was previously prohibited. However, a few major obstacles may restrict the genuine impact of this rule. First, the law allows municipalities and cities to pass ordinances allowing the sale of individual ADUs, but it doesn’t require it. So, presumably, some localities will pass such an ordinance while others will not.

Additionally, selling an ADU independently from the main property is difficult. The property must be converted into a “condominium” to split ownership between the units (the main residence and the ADU). It’s comparable to how condo developers split ownership and sell units. This complicated process requires money, effort, and experience.

After hiring an attorney to draft the condominium paperwork (Bylaws, CC&Rs, Declarations, etc.), a surveyor creates a condo plat map showing ownership boundaries. (https://accessorydwellings.files.wordpress.com/2014/09/sabin-green-plat.pdf). These are then submitted to the California Department of Real Estate for approval. You must record these documents at the County recorder’s office after approval.

You can sell an ADU “condo” on your property, but you now have a HOA (homeowners association) between your two homes that must manage the shared property. Your remaining single-family home has lost value since you converted it into a condominium. Finally, you’ll need lender approval to sell the ADU and part of the property if you have a loan on your property. They’re unlikely to make this easy.

AB 976

Previous laws banned California towns and municipalities from imposing “owner occupancy” limitations on ADUs approved Jan. 1, 2020, through Jan. 1, 2025. Tenants could rent ADUs from owners. After this deadline in 2025, communities could reimpose owner-occupancy restrictions on ADUs, limiting rental housing.
AB 976 permanently prohibits cities from imposing owner-occupancy limitations on ADUs. It does preserve the local government’s right to ban rentals under 30 days.

AB 434

By January 1, 2025, AB 434 mandates all California cities and municipalities to have a pre-approved ADU plan program. These cities must accept proposed designs for “pre-approval” by other owners/applicants. These plans must also be listed on the city website. They can also “pre-approve” plans from other cities or areas.

The law is vague on this, but architects are expected to have their plans “pre-approved” by the city and displayed on the city’s website. Since the architect owns the drawings and has design rights, anyone who wants to use them will likely have to pay for them. Every property is different, so even pre-approved plans may need to be modified or added to. The new rule also permits the city to charge the same ‘plan check’ cost for pre-approved plans as other plans.

The law simplifies California ADU planning and construction. Many property conditions are unique, thus, not all owners can employ pre-approved layouts. In many cases, a homeowner who wishes to build an ADU may locate an ideal plan at the city’s Pre-approved ADU plan website, saving time and money.

 If you want to learn more about the costs or process of legalizing an unpermitted garage conversion/ADU project in Los Angeles, Orange County, Ventura or San Diego, or if you’re ready to take the next step and talk to a local contractor or designer/architect about your specific project, feel free to call one of our friendly GreatBuildz staff at 818.317.3567 or submit your project at www.GreatBuildz.com.

Check out the GreatBuildz Guide Blog for more construction tips and advice for any type of home remodeling project!

 

Hi, we're Paul and Jon - Co-Founders of GreatBuildz. We believe everyone deserves to find a great contractor, have a stress-free renovation, and enjoy their beautiful new space. There are so many contractors out there and it's often hard to tell the good from the bad... until it's too late. We started our company to help simplify your contractor search and help you have a stress-free renovation experience. We're always available to help, no matter where you are in the process. Click here to learn more about our story.

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