What changed in California ADU law on 1 January 2026

The 15-business-day completeness clock (the one that matters)

Before this year, the law gave your city 60 days to approve or deny a complete application — but said nothing about how long it could take to decide whether your application was complete in the first place. That gap is where ADU permits went to sit.

SB 543 closed it. The permitting agency must now determine completeness and give you written notice within 15 business days of receiving your application (Gov. Code §66317(a)(2)(A)). If it is incomplete, the notice must list the missing items and describe how to cure them (§66317(a)(2)(B)). If the agency misses the 15-business-day deadline, the application is deemed complete (§66317(a)(2)(F)) — which starts the 60-day approve-or-deny clock running whether the city is ready or not.

SB 543 also gave applicants a statutory right to appeal an incompleteness determination, and requires the agency to review a resubmittal only against the items it already identified — so a city cannot keep finding new problems on each round.

Size is now measured as “interior livable space”

The statute used to say “living area”. It now says interior livable space, defined as space intended for human habitation — living, sleeping, eating, cooking and sanitation (Gov. Code §66313(e)). Bedrooms, bathrooms, kitchens, hallways and closets count. Garages, covered patios and exterior porches do not.

This sounds like a technicality and is not. It means your exterior walls no longer eat into your allowance. An 800 sq ft detached unit can now carry 800 sq ft of interior livable space, with the wall assembly sitting outside the number rather than inside it. On a small unit that is a real room's worth of difference.

Fees: the small-unit exemptions

Two cautions on this, because “fee exempt” gets read too broadly. First, “impact fee” does not include connection fees or capacity charges from a local agency, special district or water corporation — those are defined out of it expressly. Second, the proportional rule for a unit over 750 sq ft is calculated today on the whole unit, not just the part above the threshold. A 749 sq ft unit and an 800 sq ft unit are not 51 square feet apart on the fee schedule.

AB 1154: junior ADUs and owner-occupancy

A JADU is a unit built within the walls of the existing house, capped at 500 sq ft of interior livable space. It used to carry an owner-occupancy requirement in every case.

Under AB 1154, owner-occupancy now applies only when the JADU shares sanitation facilities with the main house. Give the JADU its own bathroom and the requirement falls away. That opens a door for owners who want to let both the house and the junior unit, or who do not want to live on the property at all.

JADUs still cannot be used as short-term rentals — the tenancy has to run longer than 30 days.

What this actually changes about how you should plan

• Design to the interior number, not the exterior one. If a plan set was drawn before 2026 against “living area”, the sizing assumption in it is out of date and may be leaving space on the table.
• Put the 750 sq ft threshold in front of the design decision, not after it. Crossing it does not just add fees, it changes which fee regime you are in.
• Track the 15-business-day date. It is the only new deadline in the package that runs against the city rather than against you.
• Ask about pre-approved plans in the same breath. AB 1332 already requires every city to run a pre-approved ADU plan programme with a 30-day ministerial clock. Stacking that against the new completeness rules is the fastest permit path available.

None of this changes what a unit costs to build. A good-quality ADU in our area still runs $300K–$360K for a good-quality build, and roughly $13,500–$18,500 of soft costs are fixed regardless of unit size. The 2026 changes move the schedule and the fee line, not the construction.

Common questions

Where to go next

Written by the team at Elusive Construction, a licensed California general contractor (B #1112902) building in Santa Clara and San Mateo counties. General information about how residential construction works — not legal advice. For your specific contract, talk to an attorney.