How to Hire an ADU Contractor in California (2026)

Hire a licensed California general contractor who has built ADUs in your city, verify the license on the Contractors State License Board (CSLB) website, and compare at least three itemized bids. Before you sign, make sure the contract is in writing and the down payment is no more than 10% of the contract price or $1,000, whichever is less. That is the legal cap on home improvement contracts in California.

Key takeaways

• ›Check every contractor's license, bond and workers' comp status on the CSLB license lookup.
• ›The down payment on a home improvement contract is capped at 10% or $1,000, whichever is less.
• ›Progress payments should track work actually completed, not the calendar.
• ›Local permit experience in your city matters as much as price.

What kind of contractor do you need for an ADU?

For most ADUs you want a licensed general contractor (usually Class B, General Building) with finished ADUs in your city. Options:

• ›ADU specialist or design-build firm: design, permits and construction in one contract.
• ›General residential builder: fine for simple projects, especially if you have plans.
• ›Architect plus GC: worth it on sloped, tight or historic-district lots.
• ›Prefab company: you still need a licensed contractor for foundation, utilities and installation.

Local experience matters. A builder in Pasadena should know historic district (HPOZ) lots need a Certificate of Appropriateness, which can add 30 to 90 days. One in San Diego should know the city's fire hazard zone setback rules.

How do you check a contractor's license in California?

Use the CSLB's free Check a License tool:

1. ›Get the license number (it must appear on bids, contracts and ads) and search it.
2. ›Confirm the status is active and the business name and address match the bid.
3. ›Check the classification. For a new ADU, look for B (General Building).
4. ›Review the contractor's bond and workers' compensation status. A contractor with employees must carry workers' comp; an exemption means they claim to have none.
5. ›Look for disciplinary actions or complaints listed on the record.

A salesperson signing you up must be registered with CSLB as a Home Improvement Salesperson; check that on the same site. Also ask for a current certificate of general liability insurance.

How much can an ADU contractor ask for up front?

For a home improvement contract, California law (Business and Professions Code §7159.5) caps the down payment at 10% of the contract price or $1,000, whichever is less. On a $200,000 ADU, 10% would be $20,000, so the legal cap is $1,000.

After that:

• ›Progress payments should not get ahead of the work. Tie each one to a milestone you can verify, like a passed inspection.
• ›Get lien releases. Subcontractors and suppliers can place a mechanics lien on your property if they are not paid. Ask for conditional lien releases with each payment request and unconditional releases once the checks clear.
• ›Hold the final payment until final inspection passes and the punch list is done.

How many bids should you get, and how do you compare them?

Get at least three, and give each contractor the same information: address, ADU type and size, finish level, and plans if you have them.

A good bid breaks out:

• ›Site prep and demolition
• ›Foundation
• ›Framing
• ›Roofing and exterior
• ›Electrical, plumbing and HVAC
• ›Utility connections (sewer lateral, panel upgrade, meters)
• ›Interior finishes
• ›Permits and fees, or a clear note that they are excluded

A single lump-sum number is a red flag. Check bid totals against local ranges in the cost calculator, the permit fee estimator and our ADU cost guide.

What questions should you ask an ADU contractor?

How many ADUs have you finished in this city? Ask for permit numbers you can look up.

Can I talk to recent clients? Ask if the final cost matched the bid and how problems were handled.

Who supervises on site every day?

Are you using a pre-approved plan? Under AB 1332, every city must offer a pre-approved detached ADU plan program, and matching plans must be approved or denied within 30 days. Cities such as Fresno, Riverside and Sacramento offer free plans.

What is your change order process? You want a written change order, with price and schedule impact, signed before extra work starts.

Who handles permit corrections? Under SB 543, the city has 15 business days to deem an application complete and 60 days to decide. Ask who answers plan check comments.

What should an ADU construction contract include?

California requires home improvement contracts to be in writing (Business and Professions Code §7159). Your contract should include:

• ›The contractor's name, address and CSLB license number
• ›Full scope of work, with plans and specifications attached
• ›Start date and substantial completion date
• ›Contract price and a payment schedule tied to milestones, with the down payment within the legal cap
• ›Change order procedure
• ›Warranty terms for labor and materials
• ›Termination terms for both sides
• ›The mechanics lien warning and, if you sign at home, notice of your right to cancel (generally three business days, five for homeowners 65 and older)

Worked example: a 600 sq ft ADU contract in Oakland

Say you are building a 600 sq ft detached ADU in Oakland from one of the city's pre-approved one-bedroom plans. Our Oakland data (as of 2026) shows construction at $300–$475 per sq ft, so bids of roughly $180,000–$285,000 are in range. Permit fees run $5,000–$22,000, and at 600 sq ft there are no impact fees.

On a $220,000 contract, a legal payment schedule could look like:

Hillside lots add fire safety, access and geotechnical review, and typically cost 20–30% more per our data. A good bid flags that up front.

What are the red flags when hiring an ADU contractor?

• ›A down payment above 10% or $1,000, whichever is less
• ›No license number, or a CSLB record that is expired, suspended or in another name
• ›Pressure to sign today
• ›A bid far below the others with the same scope
• ›No written contract, or a contract without a payment schedule
• ›No recent references you can call
• ›Asking you to pull the permit as owner-builder, which shifts liability for workers and code compliance to you

Where do you go from here?

Check your city on the California hub or compare cities, size your loan with the financing calculator, and browse contractors. See also our permit process guide, complete ADU guide and legalizing an unpermitted ADU.

Sources

• ›CSLB: Check a License
• ›Contractors State License Board
• ›Business and Professions Code §7159.5: down payment and progress payments
• ›Business and Professions Code §7159: home improvement contract requirements
• ›Gov. Code §65852.27: pre-approved ADU plans (AB 1332)
• ›Gov. Code §66317: ADU permit timelines
• ›City of Oakland: Apply for ADUs with Pre-Approved Plans