Do LA Rent Stabilization Rules Apply to ADUs? Compliance Guide for Owners

Accessory dwelling units have become one of the most popular ways for Los Angeles homeowners to create rental income, support family members, and add long-term value to a property.

But once you start renting out an ADU, you are no longer just a homeowner. You are a housing provider who must navigate rent stabilization rules, state rent caps, and local just cause protections.

This guide walks through how Los Angeles rent stabilization rules interact with ADUs, what actually applies to most new units, and the key steps owners should take to stay compliant while still making the numbers work.

Understanding LA’s Rent Stabilization Ordinance (RSO)

Los Angeles has its own rent control law called the Rent Stabilization Ordinance, often shortened to the RSO. It is a local rent control program that limits rent increases and sets strict rules on when and how a landlord can terminate a tenancy.

At a high level, the RSO:

• Applies to most multi unit residential properties first built on or before October 1, 1978, including apartments, duplexes, and some mixed use buildings.
• Caps how much landlords can raise rent each year on covered units, based on inflation within a set minimum and maximum range.
• Requires “just cause” for evictions, meaning you must have a legally defined reason to terminate a tenancy.
• Often requires payment of relocation assistance for certain no fault evictions, such as owner move in, substantial rehab, or withdrawal of the property from the rental market.
• Requires covered properties to be registered with the city and subject to fees and inspections.

As of 2025, the City Council has also moved to tighten rent increase limits on covered RSO units, lowering the allowable annual increases and tying them more closely to inflation. That makes it even more important for owners to know whether their property has RSO units on it.

Suppose you are unsure whether your existing building is covered. In that case, you can search the Los Angeles Housing Department’s online database or contact the department directly to confirm before you make leasing decisions.

What are Accessory Dwelling Units (ADUs) and How Are They Regulated?

Accessory dwelling units, often called ADUs, granny flats, or backyard homes, are self contained residential units on the same lot as a primary dwelling. In Los Angeles, common ADU types include:

• Detached ADUs built in the rear or side yard.
• Attached ADUs that share at least one wall with the primary home.
• Converted ADUs created from existing space, such as a garage conversion or a portion of the main house.
• Junior ADUs (JADUs) carved out of existing space inside the primary residence with a smaller footprint.

Under state law, California has aggressively promoted ADU construction by requiring cities to streamline permits and allow ADUs on most single family and many multifamily lots. The City of Los Angeles layers its own zoning, design, and building requirements on top of that state baseline, including rules on:

• Maximum unit size and height.
• Required setbacks from property lines.
• Parking and access requirements in some situations.
• Utility connections and separate meters or submetering.
• Inspections and habitability standards before a unit can be rented.

From a rent regulation standpoint, two sets of rules matter most for ADU owners in Los Angeles:

1. The local RSO, which applies to certain older buildings and, in some cases, replacement units.
2. The statewide Tenant Protection Act (AB 1482), which places rent caps and just cause rules on many newer rental units that are not already under a local rent control program.

ADUs sit at the intersection of these systems, so the details of your property’s age, configuration, and ownership matter.

Are ADUs Subject to Los Angeles Rent Stabilization Rules?

The short answer is: it depends on the age and configuration of the property, and on whether the lot already has, or will have, RSO regulated units.

1. New stand alone ADUs on newer single family homes

If you add a brand new ADU to a newer single family home that was built after October 1, 1978 and has never been under the RSO, the new ADU itself is generally not subject to Los Angeles’s RSO. It is new construction that falls outside the local cutoff date for rent stabilization.

However, that does not mean the unit is completely unregulated. State law (AB 1482) applies rent caps and just cause protections to many newer rental units in California, with some exemptions:

• New construction is typically exempt from AB 1482 for the first 15 years from the date of issue of the certificate of occupancy.
• After that period, many ADUs will become subject to state rent limits and just cause rules unless a specific exemption applies.

In practice, many newly built ADUs in Los Angeles are exempt from both local rent control and the statewide rent cap for a set period, but owners still must comply with habitability standards, fair housing laws, and any applicable just cause protections.

2. ADUs added to older, pre-1978 properties

Adding an ADU to an older property is more complex. If your main home or a multifamily building was first built on or before October 1, 1978, the underlying structure may already be covered by the RSO or could become covered when you change the unit mix on the lot.

Key points for owners:

• If the existing building is already under the RSO, an attached or converted ADU on the same parcel can be treated as part of the rent stabilized housing inventory.
• In some situations, adding an ADU to what was previously a single family home can tip the property into “two or more units” territory, which can cause the property to be treated as RSO covered if it otherwise meets the age and legal requirements.
• Replacement units built after demolition of RSO units can also be automatically subject to the RSO, including any new ADUs that function as replacement housing.

City guidance and case specific interpretations matter here. Before you assume an ADU on a pre-1978 property is exempt, you should confirm its status with the Los Angeles Housing Department or with a qualified housing law attorney.

3. ADUs and the Just Cause Ordinance (JCO)

Even when your ADU is not under the RSO, Los Angeles has a separate Just Cause Ordinance that protects many tenants in the city, including those in newer units. The JCO:

• Requires a legally valid reason to terminate a tenancy.
• Applies to most residential rental units in the city that are not already under the RSO.
• Interacts with state just cause protections under AB 1482.

In other words, you cannot assume that a non-RSO ADU gives you full flexibility to remove tenants or raise rent without limits. You must still follow just cause and notice rules.

Key Compliance Requirements for Owners Renting Out ADUs

Once you start renting out an ADU, think of yourself as a small housing provider operating under a regulated system. Some of the most important compliance steps include:

Confirm the legal status of the unit

• Make sure your ADU was permitted and inspected, with a final certificate of occupancy.
• Verify whether the property is registered as an RSO property or is subject to the Just Cause Ordinance or AB 1482.
• Keep copies of all permits, inspections, and approvals in case of a dispute.

Register and pay required fees if the ADU is rent stabilized

If your ADU is determined to be RSO covered:

• Register the unit with the Los Angeles Housing Department.
• Pay annual registration or billing fees when due.
• Follow the city’s rules on allowable rent increases and required notices.
• Track any capital improvement or rehabilitation projects carefully if you intend to use those programs to support rent adjustments.

Use compliant leases and disclosures

For both RSO covered and non-RSO ADUs:

• Use written leases that identify the unit clearly and comply with state and local disclosure requirements.
• Include any required rent control or just cause disclosures where applicable.
• Clearly describe who pays for utilities and how they are measured if you rely on a separate meter or submeter.

Follow rent increase and notice rules

• For RSO units, stay within the published annual percentage and comply with the city’s updated 1 to 4 percent range based on inflation.
• For units subject to AB 1482, confirm whether the 15 year new construction exemption applies and track when it will expire.
• Give proper written notice for any rent increase, observing both state and local timelines and content requirements.

Plan your ADU project with regulation in mind

If you have not yet built your ADU, build regulation into the financial analysis from the start. Landlords in the Eastside can use our guide to creating an ADU in Silver Lake for rental income to run the numbers and plan their project. FTR Renovation can help you design an ADU that meets code, maximizes rentable space, and still leaves room for long term compliance costs like registration fees and maintenance.

Pitfalls and Penalties: Common Mistakes with Non-Compliance

Failing to follow rent stabilization or just cause rules can be expensive. Owners of ADUs in Los Angeles should be aware of several common mistakes:

• Renting an unpermitted or noncompliant ADU. If the city receives a complaint, you may face enforcement action, orders to vacate the unit, or fines, along with potential tenant claims.
• Ignoring RSO coverage on older properties. Assuming a pre-1978 property is exempt just because the ADU is new can lead to illegal rent increases or evictions that violate the RSO.
• Improper or no cause evictions. Terminating an ADU tenancy without a qualifying reason, without proper notice, or without paying relocation assistance when required can expose you to tenant lawsuits and city penalties.
• Failure to register RSO units. If your ADU is rent stabilized and you do not register it or pay required fees, you may be barred from collecting certain rent increases and could face administrative penalties.
• Self help lockouts or utility shutoffs. Attempting to remove a tenant by changing locks or shutting off water or power is illegal and can result in significant statutory damages.

Tenants can file complaints with the Los Angeles Housing Department, seek help from legal aid organizations, or pursue private lawsuits. Documented patterns of violations can also lead to enhanced penalties for landlords.

Navigating Recent Updates and Legal Changes Affecting ADU Regulation

The legal landscape for rental housing in Los Angeles is active and evolving. Recent and ongoing developments include:

• Post pandemic rent policies. Temporary rent freeze rules for RSO units during the pandemic have been phased out, and the city is returning to regular annual adjustments with newly lowered caps.
• RSO reform. The City Council has recently voted to narrow the range of allowable rent increases under the RSO, reducing the long term growth of rent on regulated units.
• Expanded protections for non-RSO units. The Just Cause Ordinance and state AB 1482 protections continue to evolve, affecting notice requirements, allowable reasons for eviction, and documentation obligations for owners of newer ADUs.
• Ongoing ADU law refinements. The state continues to refine ADU rules to speed up permitting, clarify parking and setback rules, and address how ADUs intersect with affordable housing policies and rent control.

Because these changes can occur at both the city and state level, it is smart to:

• Check the Los Angeles Housing Department’s website at least once a year.
• Review your leases before renewing tenants or raising rent.
• Consult a landlord tenant attorney when you are unsure whether a specific ADU is covered by the RSO or only by the Just Cause Ordinance or AB 1482.

Ensuring Your Rental Property Stays Compliant with LA Law

ADUs can be an excellent way to create rental income and long term value on Los Angeles properties, but they sit at a complex intersection of local and statewide rental regulations. For many owners of newer homes, a new ADU will be exempt from traditional RSO rent control, at least for a period of years. For owners of older, pre-1978 properties, adding an ADU can trigger RSO coverage across the site or add another rent stabilized unit to your portfolio.

The safest approach is to treat compliance as a design parameter, not an afterthought. Confirm your property’s status before you rent, use leases that reflect current law, and follow rent increase and just cause rules carefully.

If you are planning an ADU project, FTR Renovation can help you understand how the construction choices you make today interact with Los Angeles rent stabilization rules so you can protect your investment and create safe, compliant housing for years to come.