The Contractors State License Board voted unanimously (10-0) to sponsor legislation that would add accessory dwelling units (ADUs) to the definition of "home improvement" in Contractors Law, a change staff said would subject ADU projects to existing limits on down payments and progress payments.

Board staff told members the proposal responds to a substantial number of consumer complaints in which homeowners paid large sums but received little or no ADU construction. "Including ADUs in the definition of home improvement will provide additional consumer protection by clearly requiring contractors engaging in ADU projects to adhere to the same progress payment rules," staff said in presenting the proposal.

Board and public discussion focused on the many forms ADUs can take — site-built, detached, or off-site manufactured modules — and on payment timing for plans, permits and site work. One board member said many consumers do not understand that a delivered modular unit still requires hookups for water, sewer and electricity, and recommended clearer consumer guidance and permit-stage checks before releasing funds. Staff and enforcement noted hundreds of complaints alleging consumers paid most or all contract sums and received little work; staff recommended consumer-facing educational materials, including a short video explaining payment stages.

The motion to sponsor the ADU-definition bill was moved and seconded and carried on a roll-call vote, 10 to 0. The board asked staff to work with stakeholders to draft statutory language, to consider different payment guidance for site-built versus off-site manufactured ADUs, and to develop consumer education materials for the board website and permitting processes.

What happens next: staff will seek a legislator to carry the measure, refine payment-guideline language, and produce consumer-facing materials that clarify when payments may be requested and when plans or permits should be in the consumer's possession before payment.