What is an ADU and a Junior ADU? In layman’s terms and technically for fuller insight.
The acronym ADU stands for “alternative dwelling unit” and JADU or JrADU stands for “junior alternative dwelling unit”.
For those familiar with real estate, in layman’s terms, an “inlaw suite” that is properly permitted with appropriate bathrooms, kitchen, and a separate entrance/exit door could qualify as being permitted as an ADU or JrADU depending on size and other facts. Likewise, a Pool House or other detached structure that is built out to be a separate residence could be permitted as an ADU as well (but not a jr ADU due to technicalities at this time in CA).
A detailed technical explanation of a JrADU and ADU, is also required, however, for full understanding of ADU’s and JrADUs
An ADU / JrADU actually represents a “PERMITTING PROCESS” and a “PERMITTING DESIGNATION for a single property whereby a singularly taxed piece of property that was only designated for a single residence is formally allowed to contain 2 or 3 generally separate residences, to and including separate mailing addresses if desired, while not affecting the tax status of the property as a singularly taxed property.
While this may sound like a techncallity you might want to ignore, understanding this at that level is CRITICAL to logically thinking through ADU and JrADU requirements, benefits and concerns, as well as understanding how they differ from duplexes, triplexes and condominiums.
A home with an ADU in it and a duplex can be identical from a use perspective. Both have a single tax ID and both accommodate 2 residences for a single property.
With a Duplex, the utilities are run separate to each residence, so there are not only 2 addresses for the property but the utilities are fully separate and separately billed.
An ADU does not (typically) have that distinction and that would be what separates it from a duplex. An ADU is often “permitted” after construction not constructed to be separate like a duplex, but not always. It could be planned into new construction. If it was planned in to new construction, it would likely be planned without utilities separate from the primary home. If it had separate utilities it would be considered a duplex and the land / plot would have to be zoned for that.
A property with an ADU or a Duplex are NOT called a “condominium” by default. That is a different type of real estate ownership system entirely as compared to 1 person owning 1 piece of land with a rental tenant(s) on it.
A condominium is a situation in which a single piece of land has multiple separate legal owners who’s “piece of the land” is assessed and billed separately for tax purposes
A very complex real estate situation arises when a property with an ADU or a duplex is “converted” into a “condominium” with 2 units as can be done in some states and as was just allowed in CA recently, before they even properly implemented ADU statutes. Such a conversion is called a “condo conversion” and we are only explaining it here and now to paint the full picture of where CA legislation is today and to provide a possible reason why Monterey County and others may be suppressing ADU and JrADU permits in an odd way now.
A “condo conversion” takes a property with 1 tax id and 2 or more residences, but a single owner and coverts it to a property with multiple sub-tax ids, with 2 or more or more residences and separate owners for each sub-tax id.
A “condominium” is actually a type of “business” , parallel to an LLC, S-Corp or C-corp. “Condominium owners” each own a piece of the business, while sharing other pieces like common driveways or hallways or grounds.
In a two unit condominium situation, functionally, the two residences are on the property and the people in thos technically live and operate separate just as they would in a duplex or home with an ADU, BUT the two property owners are TAXED SEPARATELY by the government in that area. The propert is not taxed to a single entity.
And the problems and complexity with small unit count condo conversions almost never ends just due to tax administration nightmare alone. Many tax roles and software systems are NOT able to easily take a single property tax registration number and create two numbers or two sub numbers for that. The software and systems are built to consolidate multiple properties into a single tax record, but most are not designed for splitting a single property into multiple
While this may feel like more than you needed to know about ADU’s and JrADU’s the fact that those acronyms describing a “permitting process” as much or more so than a “construction process” can only be conveyed this way -- and then understanding other operational and legal differences becomes relevant as they affect taxation, insurance, property sales and many other more complex aspects of real estate.