10 Most Common Errors When Building/ Converting an ADU

In this post we have combined a list of mistakes that homeowners and builders make during ground-up construction and conversion of ADUs. Some of them happen during early planning stages and budgeting while others occur in the field. Our team has definitely made a few of these and hopes you can avoid them during your project.

1. Lack of Information/ Strategical Planning.

Often times we hear homeowners complain that they wish they could have built more units on their lots. A lot of them think that only one detached/ attached ADU is allowed on a property. They have not been informed about regulations that allow homeowners to build up to 3 extra units. All of that added real estate can make a significant difference in terms of cash flow.

What can make things worse is if the ADU is placed in the middle of the lot, which will significantly limit your options for additional construction.

2. Incorrect Budgeting Strategies.

In construction rule number for any homeowner, when budgeting the next project, should be determining how many people they are going to pay in addition to the contractor. If the builder represents a large company with a fleet of trucks, accountants, estimators, and administrators, you need to understand that all of that overhead cost is going to get passed on to you thus driving the cost of the project up. This can be easily avoided if proper research is done into the contractor you will be working with.

3. Logistics.

In our experience we have seen too many jobsites cluttered with black plastic bags, people working on top of each other, tools and materials scattered around. These things create health hazards, insect and rodent infestation, and make a poor impression on visitors. Additionally, untidy working conditions complicate deliveries of materials, efficiency of crews, and can potentially lead to claims from neighbors or project owners.

Most of these things can be prevented by maintaining clean job sites and getting into habit of daily clean up at the end of working hours. Placing 1-2 dumpsters on side, a porta potty, and a shop vacuum can make a significant difference in the appearance of the jobsite.

4. Material supply issues.

This has always been a challenge for a lot of people, but post-Covid supply chain and manufacturing issues have made it worse. A diligent contractor will scan through building plans and will know in advance which of the materials need to be ordered as soon as possible. If time is running out, alternatives installation methods will need to be explored.

Some of the most common items that have long lead times currently are 400A NEMA electrical panels, windows, and some custom doors. Electrical panels allow for some flexibility in terms of set up, and all of those options should be explored early on in the project to prevent delays.

5. Not having complete sets of design documents.

This is one of the most critical curbs to a successful project. Without a complete set of building plans contractors cannot fully understand the scope of project, which may cause delays and change orders in the future. Some building systems may not be warranted by manufacturer if a wrong material is used as a result of incomplete plans.

Bottom line is that incomplete plans can cause project delays and extra spending.

6. Not keeping written records of scopes owed, terms of contract, contract values, progress payments.

Note of caution: all of these tasks will be difficult for a homeowner or organization to manage. Leave it up to professionals by hiring a reputable GC.

Proper record keeping is important in all construction projects. Tracking your costs, writing out scope of work in a contract, and closely monitoring progress payments are important tasks that need to be managed on a continuous basis.

Keeping detailed records of all construction costs will pay off during the tax season. If you are planning to rent out the ADU or use it as your office, construction costs can be depreciated and deducted from your current tax bill.

We have seen a lot of cases when builders and their customers would argue over the owed scope of work. If the scope is clearly spelled out in a contract or any type of written document, it will be easier to resolve the argument.

Finally, progress payments can act as leverage when you need a contractor to complete their work. Do not release payment unless you are satisfied with construction progress so far. If you are not, you can always provide a smaller payment.

7. Interior vapor barriers in mild climatic zones.

In an overwhelming majority of cases, you will not need to install a vapor barrier in your interior walls in California. A vapor barrier or a class I vapor retarder can be a sheet of polyethylene, faced batt insulation, or reflective foil insulation.

In short, installation of the vapor barrier is not recommended because of the natural vapor movement patterns and lack of dramatic differences in temperature between the interior and exterior environments. Vapor barriers are recommended in the coldest climates that none of the moisture contained in warm air inside condenses inside the wall space thus causing mold in the future.

8. Buy cheap, buy twice.

Haven't we all made this mistake at least once in our lifetimes? This principle is especially applicable to construction. Yes, every now and then you may get a solid contractor trying to undercut competition in order to work on your project and establish professional working relationship with you. That's understandable. However, in majority of cases low pricing is a sign for caution.

What we recommend for a homeowner to do in that case is the following few steps:

1. Carefully study the quote for inclusions and exclusions, verify with contractor that scope of work is complete.

2. Get references for the contractor and collect basic information - how many employees it has, number of projects going on at once, what entity they elected for their business.

3. Interview the contractor.

4. Incorporate a liquidated damages/ delay clause in your contract as a stimulus for the contractor to perform. Be realistic with your deadlines.

An unexperienced homeowner may get lucky and find the right contractors during the first project. Typically, it takes 2-3 projects to find a pool of contractors that you can trust. Be prepared that you first project as an owner-builder may be trial and error.

9. Shear walls.

This point mostly applies to retrofits and still seems to be overlooked by a lot of people. When converting an existing structure, you do not need to have shear walls installed on the exterior of the building. Some structural engineers design for exterior walls, but your local department of building and safety should accept interior installation. That tip will save you a lot of time and money. One thing to keep in mind, though, is that not all of the walls need to be reinforced, so before hanging drywall make sure your contractor installs plywood shims in areas without shear walls to make sure walls are flush throughout.

10. Joint metering.

For the most accurate utility tracking it is recommended that utilities are metered/ submetered separately from the main house. That way you will not have to pay for tenant's utilities by passing those costs onto them. Utility companies also offer some attractive rebates if homeowners install separate meters for EV charging equipment. Per LADWP website, rebates for level 2 EV charger and meter can go up to $1,500.