Awaiting expert review. This page covers rules that vary by state and local jurisdiction. It is kept out of search results until a qualified reviewer has checked it; the sources below are dated so you can verify each point.
Quick answer
An ADU rental agreement is the written lease between the owner of an accessory dwelling unit and the tenant who lives in it, setting the rent, the term and the house rules for a home that shares a lot with the owner’s house.
It works like any residential lease. The difference is the shared lot. Utilities, parking, yard, laundry, noise and access all need clear terms that an apartment lease never covers.
Quick facts
- Shared gas or electric meter (California)
- Must be disclosed; then a written agreement or other arrangement for the shared part 1
- Security deposit cap (California)
- One month’s rent, or two months for qualifying small landlords 2
- Deposit return (California)
- Within 21 calendar days after the tenant moves out 2
- Entry notice (California)
- Reasonable written notice; 24 hours is presumed reasonable 3
- Owner and manager details (California)
- Name, phone and address for service and for rent payment 4
- Minimum rental term a city may set (California)
- A city may require rentals of 30 days or longer 6
Key takeaways
- An ADU lease is a normal residential lease plus shared-lot terms.
- Spell out utilities. In California, a shared gas or electric meter must be disclosed and handled in writing or by other arrangement 1.
- California caps most deposits at one month’s rent; some small landlords may take two 2.
- The lease must name who manages the unit and where rent goes 4.
- Your city may bar ADU rentals shorter than 30 days 6.
- This page is education, not legal advice. Have a lawyer or a local landlord group review your lease.
What an ADU rental agreement means, in plain English
A rental agreement, or lease, is the contract between you and your tenant. It says how much rent is, when it is due and how long the tenant may stay. It also sets the rules both of you follow.
An ADU lease has one big twist. Your tenant lives a few steps from your back door. You may share a driveway, a yard, a laundry room and even a utility meter. Each shared thing is a possible argument unless the lease settles it first.
A good ADU lease is not longer for the sake of it. It is clear on the few things that make living on one lot work.
Why it matters to you
Most fights between ADU owners and tenants are about shared things: the power bill, a parking spot, a dog in the yard, noise at night. A clear clause turns those into a rule both sides agreed to.
Some terms are also set by law. If your lease breaks a state rule, that term may not be enforceable. You could also owe the tenant money, as with an oversized deposit.
The lease also protects your plans. If you might move into the ADU, sell or have family use it later, the lease term and notice rules matter. California’s rent-cap and eviction rules are covered below and on the long-term rental page.
ADU-specific clauses and what each should say
| Clause | What it should settle | California rule, if any |
|---|---|---|
| Utilities | Who pays each utility; how shared bills are split; meter numbers | Shared gas or electric meters must be disclosed and handled 1 |
| Parking | Which space, if any; guest parking; street only | None statewide; local rules vary |
| Yard and outdoor space | Which areas are the tenant’s, shared or off limits | None statewide |
| Laundry | Access, hours, any fee | None statewide |
| Entry | How and when you may enter the ADU | Reasonable written notice; 24 hours presumed reasonable 3 |
| Contacts | Owner or manager name, phone, address; where to pay rent | Required in the lease 4 |
| Deposit | Amount, what it covers, return timeline | Cap and 21-day return 2 |
| Term | Fixed term or month to month; minimum stay | A city may require 30 days or longer 6 |
| Occupants and pets | Who lives there; pet rules | Fair housing and local rules apply |
| Noise and quiet hours | Times and limits, the same for both sides | Local noise rules |
How to put an ADU lease together
- Confirm the ADU is permitted and finaled. Renting an unpermitted unit adds risk.
- Check your city’s rules: minimum term, rental registry, any rent or eviction ordinance.
- Start from a standard residential lease form used in your state.
- Add the shared-lot clauses: utilities, parking, yard, laundry, noise.
- Fill in the contact and rent-payment details the law requires 4.
- Set the deposit within the legal cap 2.
- Attach any required disclosures, such as a shared meter 1.
- If you negotiated mainly in certain languages other than English, give the tenant the required translation notice 5.
- Have the lease reviewed, then sign and give the tenant a copy.
Worked example: deposit math under California’s cap
Here R stands for one month’s rent, whatever it is. The caps are real 2; the owners are hypothetical.
| Landlord A | Landlord B | |
|---|---|---|
| Who owns | A person who owns the house and ADU, and no other rentals | An LLC with a non-person member that owns several buildings |
| Monthly rent | R | R |
| Qualifies as small landlord? | Yes: a natural person with no more than two rental properties and four units 2 | No |
| Maximum security deposit | Two months: 2 × R | One month: 1 × R |
| If the tenant is a service member | One month: 1 × R | One month: 1 × R |
| Return deadline after move-out | 21 calendar days | 21 calendar days |
The first month’s rent is separate from the deposit cap. The law has more detail on what may be deducted and the itemized statement. Read Civil Code 1950.5 or ask a lawyer before you keep any part of a deposit.
Worked example: one electric meter, two homes
A hypothetical setup on one lot, to show how the shared-meter rule plays out 1.
| Fact | What the rule asks for |
|---|---|
| The ADU has its own electric meter, but the porch light and garage outlet of the main house run through it | The meter serves an area outside the tenant’s unit, so you must disclose it |
| When | Before the tenancy starts, or as soon as you find out |
| Option 1 | A mutual written agreement for the tenant to pay for that outside use |
| Option 2 | Other arrangements, such as moving the circuit or paying for it yourself |
- If The tenant’s gas or electric meter also feeds a light, outlet or room outside the ADU
- Then The rule applies: disclose it in writing before the tenancy starts 1
- If You only find the shared circuit after the tenant moves in
- Then Disclose it as soon as you find out 1
- If The tenant agrees to pay for that outside use
- Then Put the payment split in a signed, mutual written agreement
- If The tenant does not agree
- Then Make other arrangements, such as moving the circuit or paying for that use yourself
- If The ADU has no meter of its own at all
- Then This rule is not the whole answer; write a clear utility split into the lease
Source: [1]
If the ADU has no separate meter at all, the lease still needs a clear split. See separate utility meter for the pros and cons of adding one. The guide below walks the same rule as a yes-or-no path.
Where you will see these terms
Rules: California first, then other states
California treats an ADU lease as a residential lease. The Civil Code rules for any home apply. These are the ones ADU owners hit most:
Shared meters. If gas or electric service through the tenant’s meter also serves an area outside the unit, you must disclose it before the tenancy or when you discover it. Then you must sign a mutual written agreement about payment, or make other arrangements 1.
Deposits. Most landlords may not take more than one month’s rent as security, on top of the first month’s rent.
A landlord who is a natural person, or an LLC whose members are all natural persons, and who owns no more than two rental properties with no more than four units, may take up to two months. That exception does not apply to a service member tenant.
The deposit must be returned, less lawful deductions, within 21 calendar days after move-out 2.
Entry. Except in emergencies and some other cases, you must give reasonable written notice and enter during normal business hours. Twenty-four hours is presumed reasonable. You may not use entry to harass 3.
Contacts. The lease must give the name, phone and address of the manager and of the owner or agent for notices. It must also say who receives rent and how 4.
Language. If a lease covered by the rule was negotiated mainly in one of the languages the law lists, notice in that language must be given when it is signed 5.
Minimum term. State ADU law lets a city require that ADUs be rented for terms of 30 days or longer 6. Many do. See short-term rental ADU.
Rent caps and just-cause eviction rules can also apply to ADUs. They have exemptions and notice rules. See long-term rental ADU and ADU rent control rules.
Other states have their own deposit caps, entry notice rules and disclosures. Some have none. Check your state’s landlord-tenant law and any city ordinance. See ADU laws by state.
The four figures below are the California numbers an ADU lease is most often checked against. Put each one in your lease or move-in papers.
- 1 monthMost landlords: maximum security deposit, on top of first month’s rentCivil Code 1950.5 2
- 2 monthsQualifying small landlords (not for a service member tenant)Civil Code 1950.5 2
- 21 daysDeadline to return the deposit, less lawful deductions, after move-outCivil Code 1950.5 2
- 24 hoursWritten entry notice presumed reasonable, outside emergenciesCivil Code 1954 3
California only
These are California Civil Code rules, read on 8 October 2026. Deposits collected before 1 July 2024 followed the older, higher caps. Other states set their own limits, and some cities add rent and eviction rules. This is education, not legal advice.
Costs and what drives them
No dollar figures. These are the cost drivers around the lease.
- Legal review of your lease, if you use a lawyer.
- Separate meters, if you choose to add them instead of splitting bills.
- Utilities you agree to include in rent.
- City rental registry or inspection fees, where they exist.
- Insurance: a landlord policy for the ADU. See insuring an ADU.
- Vacancy and turnover between tenants.
Benefits and limits of a detailed ADU lease
What it does well
Where it falls short
- A lease cannot override state or local law. Illegal terms may not be enforced.
- Too many house rules can feel like living with a landlord’s eye on you, and turn tenants away.
- Local rules change; the lease needs review over time.
- It does not replace good communication on a shared lot.
ADU lease compared with related arrangements
| Arrangement | What it is | ADU note |
|---|---|---|
| ADU rental agreement | A lease for the whole ADU | Shared-lot clauses needed |
| Room rental in the main house | A lease for a room, with shared kitchen or bath | Different rules can apply to a lodger |
| Short-term rental booking | A stay of days or weeks through a platform | A city may bar under 30 days 6 |
| Family use with no rent | An informal arrangement | Write down terms anyway if you may rent later |
| Junior ADU lease | A lease for a small unit inside the house | Even more sharing; even clearer terms |
Common mistakes
- Myth “My tenant can just pay me half the power bill.”
- Reality If the tenant’s meter serves outside areas, California requires disclosure and a written agreement or other arrangement 1. Put any split in writing.
- Myth “I can take two months’ deposit because it is a small unit.”
- Reality Unit size does not matter. Only qualifying small landlords may take two months, and not from a service member 2.
- Myth “It is my yard, so I can walk into the ADU any time.”
- Reality The tenant has a right to notice except in emergencies 3.
- Myth “A handshake deal is fine for family friends.”
- Reality Without a written lease, disputes are hard to settle and required disclosures are missed.
- Myth “The lease can waive the tenant’s legal rights.”
- Reality Terms that conflict with state law are generally not enforceable.
What to ask before you sign a lease
- Is the ADU permitted and finaled?
- Does my city have a minimum rental term, registry or rent ordinance?
- Do any rent-cap or just-cause rules apply to this unit?
- Does any meter serve areas outside the ADU?
- Do I qualify as a small landlord for the deposit rule?
- Which spaces are shared, and on what terms?
- Does my insurance cover a rented ADU?
- Who will review the lease before I use it?
Checklist: before the tenant moves in
- Confirm permits and final sign-off.
- Check city rental rules.
- Map every meter and what it serves.
- Write the shared-lot clauses.
- Fill in owner, manager and rent-payment details 4.
- Set a lawful deposit 2.
- Sign any shared-meter agreement 1.
- Walk the unit with the tenant and record its condition.
- Give the tenant a signed copy.
- Set a reminder to review the lease each year.
Related guides, tools and research
- ADU rental guideRenting an ADU, start to finish
- ADU rent estimatorSet a rent from local data
- ADU rental income researchWhat ADUs rent for
- ADU short-term rental rulesCity rules on short stays
- Owner-occupancy requirementWhen the owner must live on site
Questions about adu rental agreement
Do I need a written lease to rent my ADU?
A written lease is strongly advised. In California, the lease must also include owner or manager contact details and how rent is paid. A written lease is the only clear way to settle shared utilities, parking and yard use.
Can I use a standard lease for an ADU?
Yes, as a starting point. Add clauses for shared utilities, parking, yard, laundry, noise and access. Check that the form matches your state’s law and any city rules. Have it reviewed before use.
How do I split utilities with an ADU tenant?
Put the split in the lease. In California, if gas or electric service through the tenant’s meter also serves areas outside the unit, you must disclose it and sign a written agreement or make other arrangements. Separate meters avoid most disputes.
How much security deposit can I charge for an ADU in California?
Usually one month’s rent, on top of the first month’s rent. A natural person or all-person LLC with no more than two rental properties and four units may take up to two months, except from a service member.
How much notice do I need to enter my tenant’s ADU?
In California, reasonable written notice, entering during normal business hours. Twenty-four hours is presumed reasonable. Emergencies are an exception. You may not use entry to harass the tenant.
Can I rent my ADU month to month?
Yes, unless local rules say otherwise. A city may require rentals of 30 days or longer. Month-to-month leases still follow state notice, rent-cap and eviction rules where they apply.
Can my ADU lease ban short-term subletting?
Generally yes. A lease can limit subletting. Many California cities also bar ADU rentals under 30 days, which makes nightly subletting unlawful there anyway.
What should an ADU lease say about parking and the yard?
Name the exact parking space, if any, and guest rules. Mark which yard areas are the tenant’s, which are shared and which are off limits. Clear lines prevent most day-to-day disputes.
When must I return an ADU tenant’s deposit in California?
Within 21 calendar days after the tenant moves out, less lawful deductions, with an itemized statement for any amount kept. Read Civil Code 1950.5 for details.
Is this page legal advice?
No. It explains common rules and clauses. Your lease should be reviewed by a lawyer or a qualified local landlord association, and checked against your city’s rules.
Sources
- California Legislature, Civil Code §1940.9 (shared gas and electric meters), retrieved .
- California Legislature, Civil Code §1950.5 (security deposits: cap, small-landlord exception, 21-day return), retrieved .
- California Legislature, Civil Code §1954 (landlord entry and notice), retrieved .
- California Legislature, Civil Code §1962 (owner and manager disclosures in the lease), retrieved .
- California Legislature, Civil Code §1632 (translation of contracts negotiated in certain languages), retrieved .
- California Legislature, Government Code §66315 (local agency may require ADU rentals of 30 days or longer), retrieved .
Expert review
Written by the HyreADU Research team. Not yet reviewed by an outside expert. We say so rather than imply a review that has not happened; see our editorial policy.
How the numbers were checked: Civil Code and Government Code sections read on leginfo.legislature.ca.gov on 2026-10-08. Education, not legal advice. Held for review (G-REV).
Suggest a correction. We fix errors and say what changed.