Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
5y
In San Diego, I am unaware of any local jurisdiction enforcing owner occupied on a traditional ADU when rented for a long term rental (for example a traditional ADU that was built when OO was required). I suspect this is true of San Jose, but I would recommend you go to a local RE meetup and get feedback from local investors if no one can provide a definitive answer here.
By traditional ADU, these are ADUs that are not Junior ADUs. Junior ADUs require owner occupancy.
Real Estate Agent · Bay Area, CA · Member since 2020 · 9 posts · 3 votes
5y
Honestly, you shouldn't be worried about the fines associate with renting out an illegal ADU. Your real liability is when your tenant files a lawsuit against you. Do you know if the ADU is completely illegal, or is it just non-conforming use? My recommendation would be to speak with a local real estate lawyer, I can connect you with one if you'd like.
Also, I recently had a client that had tenants in two separate illegal add-ons on one parcel. They were eventually forced by the city(Menlo Park) to remove their tenants and acquire permits for every change that they made. When it was all set and done, they ended up at a huge loss for their illegal units.
That being said, many people successfully operate illegal units, especially here in the Silicon Valley. But, I'd make sure you're in a good position with your neighbors and vet, vet, vet, those tenants.
I currently live in San Jose and primarily operate in the South Bay. Reach out to me privately if you have anymore San Jose related questions.