Supporting Homeowners to Bring Pre-existing ADUs into Compliance

1. If desired, start by evaluating the scope of pre-existing ADUs. Identify how many pre-existing ADUs might exist in the jurisdiction and the common compliance issues they face (e.g., zoning, safety standards, or utility hookups). Potential strategies include:
   • Review MLS listings, Craiglist boards, and any other typical platforms for listing housing. Look for posts that mention ADUs, then check if they match official records.
   • Ask Code Enforcement for any filed complaints about illegal units. 
   • As part of general housing or ADU research, inquire with residents, property owners, and staff if they know about any illegal ADUs (they don’t need to be specific) and think it’s a problem. 
2. Design a legalization/amnesty program. Steps may include:
   • Define eligibility criteria for property owners, such as location, property type, income levels, absence of active code enforcement case, date of construction. 
   • Determine which regulatory violations must be fixed for homeowners to legalize their ADU. Consider:
     • Only requiring compliance with standards that are necessary for life and safety.
     • Only requiring compliance with the code that was in place when it was built. 
   • Decide which fees will be waived or reduced to incentivize homeowners to legalize their ADUs (e.g., inspection fees, permit fees, impact fees, utility connections, etc.). Waive any applicable penalties for building an unpermitted ADU.
   • Considering technical assistance to help homeowners navigate the process, including access to professionals like architects, engineers, and/or contractors. This may also include access to dedicated local government staff charged with shepherding homeowners through the legalization process.
   • Consider providing homeowners with a free, confidential inspection of the ADU by a third-party inspector, which will include an examination of the ADU and a detailed write-up of any issues requiring correction. Third-party inspectors provide advantages such as offering homeowners a low-risk way to learn about the program without committing to participation and preventing jurisdictions from feeling obligated to take action against property owners who choose not to legalize.
   • Publish a clear, step-by-step checklist on legalizing pre-existing ADUs for homeowners to follow.
3. Determine potential financial incentives. Steps may include:
   • Identify existing programs or potential partnerships to provide deeper financial assistance. For example, community action agencies throughout the state have programs such as weatherization assistance that could help meet health and safety compliance issues at no cost to income-qualifying homeowners.
   • Incorporate assistance into existing incentive funds or programs. 
   • Create grant programs or partner with local banks or credit unions to offer low-interest loans for homeowners needing financial assistance to make safety upgrades or other improvements.
4. Determine how you’ll monitor and evaluate the program. Plan to track applications and approvals under the program and to gather feedback from participants to refine the program over time.

Potential displacement of low-income tenants in pre-existing ADUs. 

• Consider only requiring the minimum updates required for ADUs to be safe and habitable. Consider providing financial support for tenants who may need to temporarily relocate during construction.

Homeowners may perceive participation in the program as being too risky.

• Ensure standards that will be enforced are not too rigorous and only reflect the minimum that homeowners need to do to make existing units safe. Consider hiring third-party inspectors or consider having a dedicated inspector with expertise in this particular issue who can establish trust with homeowners and help them decide to participate. Consider allowing anonymous inquiry into the program where homeowners are not committing themselves to making updates by asking questions about the program. Consider creating a code enforcement “firewall” unless there is a clear and imminent danger to the public or environmental health. 

Lack of awareness for the homeowners who need it most.

• Leverage robust outreach campaigns through newsletters, community events, and media coverage to raise awareness of the program. Develop easy-to-read marketing materials in multiple languages.

• Wheat Ridge: Property owners can seek legal status for their existing, unpermitted ADUs through the Existing ADU Program. Property owners with existing structures or parts of structures that meet the definition of ADUs may apply to the City for approval. The City Council has extended the grace period for submitting applications, which must now be submitted by August 15, 2026. After this date, there may be reduced flexibility and/or penalties. 
• Summit County: See the Summit County case study for more details.
  The ADU Assistance Program reimburses up to 25% of construction costs to convert non-compliant ADUs into compliant ADUs, requiring recipients to agree to workforce housing covenants and rental caps at 110% AMI in exchange for the funding.
• Outside of Colorado
  • Milpitas, CA: The Safe ADU Legalization Program provides property owners with a consultation with the Safe ADU Legalization Program Coordinator and a free, initial inspection to assist with the legalization process.
  • Berkeley, CA: Property owners can legalize existing ADUs via the Amnesty Program for Unpermitted Dwelling Units, which provides two pathways for legalization. 

• Partnering with Lenders to Provide Loans and Financing Opportunities: Many homeowners might not have the available funding to legalize an existing unit. With ADU-specific funding opportunities in place, you may be able to work with lenders to offer funding to homeowners to complete updates on the existing unit. 
• Waiving or Reducing ADU-related fees for Low- and Moderate-Income Households: Low- and moderate-income households may not have the funding available to legalize an existing unit. A fee reduction/waiver program could be extended to cover fees associated with legalizing an existing unit. 
• Waiving or Reducing ADU-related fees All Applicants: Fees can also be waived or reduced for legalization projects; consider whether you want to expand the program. 
• ADU Technical Assistance for Homeowners: It is particularly important to have clear homeowner guidance about their participation in any legalization program. Clearly lay out their obligations, potential risks, steps in the process, and many of the other details described above. Make this information clear but friendly to encourage participation. 
• Developing Allowances and Guidance for Garage Conversions: Unpermitted units may be casual, illegal conversions of garages. Having guidance in place about garage conversions can help guide decisions about legalizing an existing garage unit and what updates are high priority. 
• Reducing the Tax Burden of ADUs: Homeowners may be concerned about the impact their newly legalized ADU may have on their tax burden. Even without ADU-related tax strategies in place, be prepared to clearly answer the tax implications of legalizing an existing unit.