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ADU contract checklist: what to check before you sign

By the HyreADU research desk. Last checked .

The short answer

An ADU contract checklist starts with what California law requires in a home improvement contract: the contractor’s name, address and license number, the contract price, a payment schedule in dollars tied to work, a down payment within the legal cap, approximate start and completion dates, and the rules for change orders. Then add the scope, drawings, allowances and warranty.

What California requires

  • The contractor’s name, business address and license number.
  • The contract price.
  • A down payment of no more than $1,000 or 10 percent, whichever is less (Bus. & Prof. Code § 7159.5).
  • Each progress payment stated in dollars and cents and tied to the work it pays for (§ 7159).
  • Headings for an approximate start date and approximate completion date, with dates.
  • A statement that change orders must be written and signed before the work (§ 7159).
  • Required notices, including about mechanics liens and the right to cancel where it applies.

What else to add

  • The drawings and specifications by name and date.
  • A full scope, including site work and utility connections.
  • Every allowance by item and amount.
  • An exclusions list.
  • Who pulls the permit and pays the city fees.
  • Warranty terms in writing.
  • Lien releases with each payment.
  • How disputes are handled.

Check it against the bid

Read the contract next to the bid you accepted. Anything in the bid that is not in the contract may not be built. Run it through the ADU contract checker, and see ADU payment schedule for how payments should follow the work.

What to do next: read the questions to ask an ADU builder, check what decides ADU cost, then tell us about your project. Matching is not live yet, so we reply with information, not a quote.

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Questions

Does an ADU contract have to be in writing?

In California, a home improvement contract over $500 must be written, under Bus. & Prof. Code § 7159.

Can I cancel after signing?

California gives a right to cancel in some cases. We give no legal advice; read the notice in your contract.

Should a lawyer review my contract?

For a contract this size, many owners choose to. We cannot.

What if the dates slip?

The contract should say what happens. Read that clause before signing.

Sources

HyreADU is a publisher. It does not design, permit or build ADUs, has no partner builders, and gives no legal, tax or engineering advice. Rules vary by state and city; California rules are labeled as such.