How to Choose an ADU Company in California: 10 Questions to Ask Before You Sign

Choosing the wrong ADU company is the single most expensive mistake a California homeowner can make on an ADU project — and most homeowners do not know what they should be asking until the contract is already signed. After permitting 126 ADU projects across Los Angeles County over the past nine years, we have watched the same pattern play out dozens of times: an exciting first meeting, a low initial quote, a signed contract, and then a slow march of change orders, missed deadlines, and budget overruns that turn a $300,000 project into a $400,000 one.

This post is the script we wish every homeowner had before they sat down with their first ADU company. It is the 10 questions that separate companies who can actually deliver what they promise from companies who cannot — plus the red flags, the contract clauses to look for, and the California regulations that should anchor your decision. Use it as your interview sheet. Bring it to every consultation. The companies that answer these questions cleanly are the ones worth your time.

Why Choosing the Right ADU Company Matters More Than You Think

An ADU is a complete house. It has a foundation, a frame, a roof, plumbing, electrical, HVAC, insulation, drywall, finishes, fixtures, and a permitted occupancy certificate. The only thing that distinguishes it from new single-family construction is the size and the legal category. Everything that can go wrong on a custom home build can go wrong on an ADU — and the company you hire is the single biggest variable in whether it actually does.

The cost of a bad choice is asymmetric. The best ADU companies deliver on time, on budget, and to the permit. The worst can leave you with an unfinished structure, a six-figure mechanics’ lien from an unpaid subcontractor, plans that fail plan check, or a finished unit that cannot get a certificate of occupancy because the work was not done to code. These are not theoretical risks. They happen across Los Angeles every year.

The 10 questions below are designed to surface those risks before you sign. They are not gotcha questions. A well-run ADU company will answer all of them comfortably and back the answers up with documents.

Question 1: Is Your Pricing Fixed, or Is It an Estimate?

What you are testing: Whether the number you sign for is the number you will pay — or just a starting point.

The most common cost trap in ADU construction is the “allowance-based” bid. The contract specifies a $300,000 total but includes line items like “flooring allowance: $8,000,” “tile allowance: $4,500,” “cabinetry allowance: $12,000.” The moment you walk into a showroom and pick flooring that costs more than the allowance — which it almost certainly will — you are paying the overage. Six categories of allowances can quietly add $30,000 to $60,000 to a project that looked fixed-price on paper.

A true fixed-price ADU contract specifies the exact products you will receive: the cabinet line, the countertop material, the flooring SKU, the plumbing finish, the appliance package. If your company will not tell you specifically what the $300,000 buys, that is not fixed pricing — that is an estimate dressed up as a quote.

What a good answer sounds like: “Yes, our pricing is fixed for the model and configuration you select. Here is the exact spec sheet of every product included. The only items not included are city plan check fees, permit fees, and any upgrades you choose — and we will price those upgrades in writing before any work begins.”

What a bad answer sounds like: “We give you a really tight estimate and only adjust if something unexpected comes up” — with no documentation of what “unexpected” means.

Question 2: Do You Design and Build In-House, or Do You Subcontract Both?

What you are testing: Whether you are hiring a builder or a middleman.

Some ADU companies that brand themselves as “design-build” are actually project management firms that subcontract the architecture to one independent firm and the construction to another. You sign one contract, but behind the scenes there are still two separate teams — with all of the coordination problems of the traditional architect-plus-GC model, plus a markup layered on top for the middleman role.

True design-build means the same company employs both the architects and the construction supervisors, and they communicate daily. When a plan check correction comes back from the city, the architect updates the drawings and the project manager adjusts the construction schedule the same day. When a site condition is discovered during foundation work, the in-house team can redesign on the fly without renegotiating fees with an outside architect.

What to ask specifically: “Who draws the plans? Who pulls the permit? Who supervises the build day-to-day? Are those people employees of your company or independent contractors?” If any of those answers is “we work with” rather than “our team,” you are looking at a project management firm — not a design-build company. For the full breakdown of why this matters, see our design-build vs. architect-plus-GC guide.

Question 3: Are You Licensed, Bonded, and Insured to Build in California?

What you are testing: Whether the company can legally do the work, and whether you are protected if something goes wrong.

In California, any contractor doing work valued at $500 or more must hold an active license from the Contractors State License Board (CSLB). For ADU work, the relevant licenses are typically a B (General Building) license held by the general contractor performing the construction. Design firms that do not hold a contractor’s license must partner with a licensed builder — the licensed builder is the one who signs the construction contract and pulls the permit.

Three things to verify on every ADU company you interview:

1. The CSLB license number. Look it up at cslb.ca.gov to confirm the license is active, classified correctly, and has no outstanding disciplinary actions.
2. Workers’ compensation insurance. California requires it for any contractor with employees. If the company tells you their subcontractors carry their own workers’ comp, ask how they verify it — if a subcontractor’s uninsured worker is injured on your property, the homeowner can be on the hook.
3. General liability insurance. Standard minimum is $1 million per occurrence. Ask for a current certificate of insurance naming you as an additional insured for the duration of the project.

This is the question with the most lopsided answers. Reputable companies will email you their license number, bond status, and insurance certificates the same day. Companies that hedge, delay, or push back on the request are telling you something important about how they operate.

One additional note: some ADU companies (including CALI ADU) work with established licensed general contractors on the construction side rather than holding a GC license themselves. That is a legitimate structure as long as the GC is clearly identified, licensed, insured, and contractually responsible for the work. What is not legitimate is a company that vaguely “handles all that” without naming the actual licensed builder.

Question 4: How Many ADUs Have You Permitted in My Jurisdiction?

What you are testing: Whether the company has been through the specific permitting process your project will go through.

California Government Code §66317 requires every jurisdiction to approve compliant ADU permits ministerially within 60 days of a complete application. In practice, that timeline depends entirely on how cleanly the plans are submitted. A company that has permitted 30 ADUs in the City of Los Angeles knows exactly what LADBS plan checkers will flag, what corrections come back at intake, and how to format the documents to clear the first plan check pass. A company that has never permitted in your city will learn at your expense.

Jurisdictions vary more than most homeowners realize. The City of Los Angeles, Los Angeles County, Long Beach, Pasadena, Glendale, Burbank, Santa Monica, Culver City, and Beverly Hills all have meaningfully different submittal requirements, plan check workflows, fee schedules, and inspection regimes. A company that does great work in one of those cities is not automatically efficient in another.

What to ask specifically: “How many ADUs have you permitted in my exact jurisdiction in the last 24 months? Can you send me three addresses where I can drive by? Have you been through HCD’s most recent ordinance review for this city, and what did it change about your process?”

The Department of Housing and Community Development (HCD) has issued ordinance review letters to dozens of California jurisdictions over the past several years — including the City of Los Angeles, Los Angeles County, Pasadena, Glendale, and Torrance — flagging local rules that conflict with state law. Companies that actively track these reviews are the ones who know how to push back when a local plan checker invokes a rule that HCD has already found non-compliant. That knowledge saves real time.

Question 5: Who Handles the Permit Process — and What Is Your Real Permitting Timeline?

What you are testing: Whether the company will actually own the permit process, or just hand you a stack of plans and disappear.

State law gives ADUs a powerful timeline guarantee. Under Gov. Code §66317, a complete ADU application must be approved or denied within 60 days. SB 543 (effective January 1, 2026) added a 15-business-day completeness check requirement — the city must tell you within 15 business days if anything is missing from your submittal. These are not aspirational targets. They are statutory deadlines.

The problem is that “a complete application” is doing a lot of work in that sentence. Cities issue corrections at intake, then more corrections after plan check, then more during structural review, then more from the public works department on right-of-way improvements. Each correction restarts portions of the clock. A company that knows what each reviewer will flag submits clean the first time and rides the 60-day timeline. A company that does not know can stretch the same permit to 4 to 6 months.

What a good answer sounds like: “We handle the entire permit process. Our average time from contract signing to permit issuance in this jurisdiction is X weeks across our last 20 projects. Here is what the path looks like: 2–3 weeks of design and engineering, submittal, intake, plan check, corrections if any, and issuance. We track every project against the 60-day statutory clock and escalate to HCD if a jurisdiction misses the deadline without justification.”

What a bad answer sounds like: “Permitting can take anywhere from 3 to 9 months — it really depends on the city.” That answer means the company has not measured its own performance and does not have a system for managing the timeline.

For a deeper look at what actually happens in the permit office, see our guide to the ADU permitting process in California.

Question 6: Exactly What Is Included in Your Price — and What Is Not?

What you are testing: Whether the company will surface every non-included cost up front, or let you discover them one at a time as the project progresses.

There are five categories of costs that almost every ADU project incurs, and almost every ADU company handles them differently. Get the answer in writing for each one before you sign:

Under Gov. Code §66329, ADUs under 750 square feet are exempt from local impact fees, and units 750 sqft and over are charged proportionally. That is a state-mandated rule, not a company benefit — do not let any contractor frame impact fee savings as something they negotiated for you.

The right answer to this question is a single-page document listing exactly what is in the price and exactly what is not, with realistic ranges for the not-included items. Companies that cannot produce that document have not thought through their own pricing model.

Question 7: Can You Show Me Completed Projects I Can Visit?

What you are testing: Whether the company has actually finished the work it says it has — and whether their finished product looks like what they show in renderings.

Every ADU company has a portfolio page full of beautiful photography. Some of that photography is of completed projects. Some of it is of renderings. Some of it is of projects the company quoted but did not actually build — the architectural drawings were resold or licensed from a designer who took the photos before staging.

The fix is simple: ask for the addresses. A reputable company will give you the addresses of two or three completed projects with permission to drive by. Many will arrange a walkthrough if the homeowner is open to it. A company that cannot or will not provide a single address has a credibility problem worth understanding before you commit.

When you do drive by, look at three things:

• Exterior craftsmanship. Stucco quality, trim alignment, roofline straightness, finish at flashing and transitions. These tell you what the construction crew actually does day-to-day.
• How the ADU sits on the lot. Is it shoehorned into a corner, or does it relate well to the main house? Site planning judgment is one of the hardest skills to evaluate, and the only way to assess it is to see completed work in person.
• Whether the address actually has an ADU. Pull up the city’s permit search and confirm a final certificate of occupancy was issued for an ADU at that address. This is a 30-second check, and it is the most reliable proof of a completed project.

For a sense of the range of work CALI ADU has delivered, see our project portfolio.

Question 8: Can You Build a Two-Story ADU on My Lot?

What you are testing: Whether the company has the engineering, construction experience, and product lineup to handle a two-story build — and whether your jurisdiction allows it.

Two-story ADUs are the single biggest dividing line in the California ADU market. Every prefabricated ADU company is locked into single-story production because their units ship on a truck. Most site-build ADU companies stick to single-story because two-story adds structural engineering complexity, foundation requirements, stair design, and inspection sequencing that single-story does not.

The result: if you want a two-story ADU — which is often the right answer on tight Los Angeles lots where you need more living space without giving up the yard — most ADU companies cannot help you.

The state law context: Gov. Code §66321(b)(4)(A) guarantees at least 16 feet of height for a detached ADU on a single-family lot, §66321(b)(4)(B) guarantees 18 feet within one-half mile of a major transit stop, and §66321(b)(4)(C) guarantees 18 feet on a multifamily lot. Local jurisdictions can allow more. The City of Los Angeles, for example, allows ADUs up to 30 feet tall in most residential zones, which makes two-story feasible across most of the city.

What to confirm with any ADU company that says they can build two-story:

• Specific two-story plans they have actually permitted and built — not renderings of plans they could build if asked.
• Their experience with the structural engineering required for a two-story ADU on a small footprint.
• Their understanding of which local jurisdictions allow taller-than-state-floor ADUs by right, and which require additional review.

CALI ADU offers three two-story Signature Home models — the Fairfax, Venice, and Culver — ranging from 840 to 1,200 sqft. They are a primary reason we win projects against the prefab companies on tight lots.

Question 9: What Happens If Costs Run Over or the Schedule Slips?

What you are testing: Whether the company has a system for handling the things that will go wrong — or whether you will be on your own when they do.

Things go wrong on construction projects. The question is not whether they will happen on yours; it is who absorbs the cost when they do. The contracts that protect homeowners and the contracts that protect the contractor look very different.

Real-World Example: The $30,000 “Unforeseen Condition”

A homeowner in Sherman Oaks signed a contract with an ADU company that included a clause allowing additional charges for “unforeseen site conditions discovered during excavation.” During foundation work, the company hit a section of decomposed granite that required a deeper footing and added structural reinforcement. The homeowner was charged $30,000 in change orders. The decomposed granite was visible on a soils report the company had received but not factored into the bid. Because the contract did not require the company to review the soils report before pricing, the homeowner had no recourse.

The clauses to scrutinize in any ADU construction contract:

• Change order procedure. Every change order must be priced in writing and signed by you before the work proceeds. Verbal approvals or “we’ll true up at the end” arrangements are how budgets blow up.
• What counts as an “unforeseen condition.” The narrower the definition, the better protected you are.
• Schedule liquidated damages. Does the company owe you anything if construction runs significantly past the contracted completion date? Some include a daily credit; many do not.
• Termination rights. What happens if you need to fire the company mid-project? What are you owed back, and what do you have to pay?
• Warranty terms. California Civil Code requires statutory warranty periods on residential construction. The contract should restate those minimums clearly, plus any additional warranty the company offers above the statutory floor.

If a company resists answering these questions in writing, or has a contract that loads every risk onto the homeowner, that is the question answered.

Question 10: How Long Have You Been in Business, and How Many ADUs Have You Completed?

What you are testing: Whether the company will still be around when you need warranty support a year after move-in.

The California ADU market exploded after 2017 when state law dramatically expanded ADU rights. That growth has attracted a lot of new entrants — some excellent, some not. Many of the companies that opened in 2020 and 2021 will not be in business in 2027. If your warranty period is one year and the company closes six months after your project finishes, your warranty is worthless.

The data points that matter:

• Years in business under the same name and ownership (rebrands are a warning sign).
• Total number of ADUs completed and certified for occupancy.
• Average completion volume per year over the last three years.
• Owner’s personal involvement in the business — founder-led companies tend to be more accountable than companies sold to absentee owners or backed by short-horizon investors.

This question is not about discriminating against newer companies. It is about understanding the risk profile. A two-year-old company with great work and disciplined operations is a reasonable choice for many homeowners. A two-year-old company that has completed three projects and is bidding aggressively to win more is a different risk altogether.

Red Flags to Watch For When Evaluating ADU Companies

Beyond the 10 questions, a handful of patterns reliably predict a bad outcome. Walk away from any company that exhibits more than one of these:

• The first quote is dramatically below the others. If three companies quote $310K, $325K, and $230K for the same project, the $230K bid is not a deal — it is missing scope. The change orders during construction will close the gap and then some.
• High pressure to sign the contract at the first meeting. A reputable company gives you time to evaluate the proposal, compare alternatives, and have a lawyer review the contract if you want one.
• Large deposit demands. California law (Business and Professions Code §7159) limits the down payment on a home improvement contract to 10% of the contract price or $1,000, whichever is less. Companies that demand $20,000 to “hold your spot” before contract signing are violating state consumer protection law before construction has even started.
• Vague timelines. “Six months once we get rolling” is not a contract date. Insist on a written schedule with a target permit submittal date and target completion date.
• Inability or unwillingness to share completed-project addresses. Covered above in Question 7. Treat it as a deal-breaker.
• No clear point of contact. You should know the name of your project manager before signing, and that person should be the same person from contract through final inspection. Companies that hand projects between three or four people are companies where information falls through the cracks.
• Negative online presence with no response from the company. A few negative reviews are normal across hundreds of projects. A pattern of similar complaints (chronic delays, change orders, unresponsive office) with no public response from the company is the warning sign.

How to Compare Companies Apples to Apples

Once you have interviewed two or three ADU companies, the proposals you receive will not look the same. One will include site work, another will exclude it. One will list a specific cabinet manufacturer, another will use an allowance. One will quote the total fee inclusive of permits, another will note permit fees are paid separately. Comparing these proposals on the bottom-line number is meaningless.

The right way to compare is to build a single spreadsheet with the line items below and force every proposal into the same format:

When you force every proposal into this format, two things happen. First, the apparent low bid usually disappears — the missing line items become visible. Second, the value differences between companies become real. A company that quotes the actual cabinet manufacturer and the actual countertop SKU is selling you a different product than a company quoting “cabinetry allowance: $12,000.”

For context on what realistic all-in pricing looks like across our Signature Home models — from the 400 sqft Wilshire at $219,000 to the 1,200 sqft two-story Culver at $459,000 — see our complete guide to ADU costs in California.

The Final Decision Framework

After nine years and 126 projects, the homeowners who end up happy with their ADU outcome share three traits. They asked the right questions before signing. They prioritized certainty over a bottom-line number. And they hired the company whose answers held up under follow-up.

Use this final checklist as the last gate before signing any ADU contract:

• The price is fixed for a specified configuration, with every product and finish named.
• Design and construction supervision are handled by the same company’s employees, not subcontracted to independent firms.
• The CSLB license, workers’ comp, and liability insurance documents are in your hands.
• The company has permitted at least 10 ADUs in your jurisdiction in the last 24 months.
• The contract specifies a target permit submittal date and target completion date.
• You have driven by at least two completed projects and verified their permit status.
• Every category of typically-excluded cost (city fees, utility upgrades, landscaping) has a written estimated range.
• The change order procedure requires written approval before any added work proceeds.
• The down payment is consistent with California Business and Professions Code §7159.
• You feel that your project manager will pick up the phone in six months if something needs attention.

If you can check every box, you are hiring with eyes open. If you cannot, the question is which boxes you are willing to leave unchecked — and whether the savings or speed you are getting in exchange is worth the risk.

Before you commit to any company, also read our breakdown of the five things that kill ADU projects before they start and the most common ADU design mistakes California homeowners make. Both will sharpen what you are listening for in those first meetings.

And if you want to put these 10 questions to us directly, we are happy to answer all of them in a free 30-minute consultation. Bring your interview sheet. The companies worth your time will welcome it.