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Nick Clossman
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ADU Liability Protection

Nick Clossman
Posted Apr 23 2024, 10:29

I live on 5 acres and am considering building a DADU to use as a short or medium term rental. My question is, what is the best way to protect myself from liability? Since the DADU is on the same property as my primary residence, can I place the DADU in an LLC, separate from my primary residence, to protect my personal assets from liability? If not, is getting am umbrella insurance policy on the DADU my only liability protection option and is it a good protection strategy?

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Bill Schrimpf
  • Real Estate Agent
  • Reno, NV
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Bill Schrimpf
  • Real Estate Agent
  • Reno, NV
Replied Apr 23 2024, 21:41

@Nick Clossman - Interesting question.  My first stop would be the existing homeowners insurance carrier.  

Ive never seen someone ask if an ADU can be moved to a separate entity (LLC, trust, etc) from the primary residence. I'm curious to see what others say.