Thinking about selling your Milpitas home with an ADU or JADU? The right prep can turn that extra unit into a real selling advantage. You want a smooth sale, strong offers, and no surprises in escrow. In this guide, you’ll learn what documents to gather, which inspections to complete, what the latest laws mean for your sale, and a simple timeline that keeps you on track. Let’s dive in.
Start with Milpitas ADU rules
Key state laws for ADUs
California supports ADUs, and recent laws expanded flexibility for owners. AB 976 prohibits cities from requiring you to live in either the main home or the ADU, which opens your buyer pool and rental options. Review the bill text to understand this change and how it applies to your sale. You should also know that AB 1033 allows cities to opt in to let ADUs be sold separately as condominiums, but only if the city adopts a local ordinance.
- Read the state rules: AB 976 owner-occupancy prohibition
- Separate sale option, if the city opts in: AB 1033 summary
City programs to leverage
Milpitas actively supports ADUs with clear resources and staff help. Start at the City’s ADU page for guidance, forms, and appointment options. If your unit was built without final permits, the Safe ADU Legalization Program can outline corrections and reduce penalties for qualifying pre-2020 units. If you are finishing or legalizing work, the Pre-Approved ADU Program can streamline plan review.
- City overview and contacts: Milpitas ADU main page
- Legalize an existing unit: Safe ADU Legalization Program
- Faster plan sets: Pre-Approved ADU Program
What buyers and lenders expect
Most buyers and lenders want proof that the ADU is permitted and safe. Expect requests for building permits, final inspections, and clear square footage for the main home versus the ADU. If the ADU is rented, buyers will ask for the lease and deposit records. Utility capacity or meter details can also matter, and service upgrades may affect escrow timelines.
Local utility scheduling can slow projects, so have documentation ready if you recently upgraded power or gas. This reduces lender concerns and helps keep your closing on track.
- Context on utility delays: PG&E scheduling and ADU projects
Assemble your ADU paperwork
Gather these items before you list:
- Permits and final inspection sign-offs for the ADU or JADU, plus any plan names if you used a pre-approved set.
- Safe ADU documents, including inspection reports or application numbers, if you are legalizing an existing unit.
- Any recorded deed restrictions related to the ADU.
- Floor plan and square footage split between the main home and ADU.
- Utility details, including whether meters are shared or separate and any sewer approvals.
- Current lease, rent amount, term, and security deposit records if tenant occupied.
- Insurance confirmation showing coverage for the ADU and any exclusions.
- Contractor invoices and permit copies for work done during your ownership, especially if you will sell within 18 months of purchase under the new “flipper” disclosure rules.
Safety checks before listing
Health and safety items are top priorities for buyers, appraisers, and cities. Test smoke and carbon monoxide alarms. Confirm egress, door hardware, GFCI protection, and water heater strapping. If the ADU was converted from a garage or attic without a final permit, schedule a Safe ADU inspection to understand required fixes and the path to legalization.
- Safety and legalization overview: Safe ADU program
Disclosures you must prepare
California requires full and honest disclosure of known conditions. Complete the Transfer Disclosure Statement and related forms, and disclose any unpermitted work. If you bought the home within the last 18 months and are reselling, be ready for the AB 968 “flipper” disclosures, which add details about renovations and contractors above certain cost thresholds.
- State disclosure update: AB 968 seller disclosure changes
Legalize before listing?
Legalizing an unpermitted ADU often expands your buyer pool and reduces lender issues. It can also support a stronger price and lower post-closing risk. If timing or cost makes pre-sale legalization hard, document the status and provide buyers with a clear path and contractor estimates. In Milpitas, the Safe ADU program can reduce penalties for certain qualifying units and focuses on health and safety corrections.
- Learn about legalization steps: Milpitas Safe ADU Legalization Program
Taxes and assessments to expect
Santa Clara County treats ADUs as new construction for assessment. The added value is usually assessed separately from the main home’s Prop 13 base. If your ADU was finished recently, expect a supplemental tax bill between completion and the next January 1 lien date.
- County guidance: Assessor information on new construction
Suggested prep timeline
- Weeks 6 to 12 before listing: Pull permits and final inspections, request a pre-listing inspection focused on the ADU, and contact Milpitas Building Safety about Safe ADU options if needed. Start any simple corrections early.
- Weeks 4 to 6: Complete health and safety items like smoke and CO alarms, GFCIs, and egress corrections. Gather leases, insurance confirmations, and utility documentation.
- Listing week: Disclose ADU status clearly in the listing and your disclosure packet. Make permits, finals, leases, and any Safe ADU reports available to buyers.
- During escrow: Be ready for lender and appraiser requests. If utilities or inspections are pending, provide schedules and approvals to keep closing on time.
Pricing and valuation tips
Permitted ADUs often increase value by widening your buyer pool, including investors and multigenerational buyers. Appraisers may consider rental income and compare your home to similar sales with ADUs. Keep your comps local, and present clean documentation so buyers can confidently value the ADU. If unpermitted, price to reflect risk or show a clear path to legalization.
Milpitas seller pro tips
- Use City resources to validate status and records: Milpitas ADU main page.
- If you built recently, assemble a tidy permit-to-final inspection trail and utility confirmations.
- If you are within 18 months of purchase, prepare AB 968 disclosures early: DRE guidance.
- If you plan changes before selling, explore the Pre-Approved ADU Program to speed reviews.
- Confirm whether separate sale is allowed before marketing that option. AB 1033 requires local adoption first.
Ready to position your ADU as a selling strength and avoid costly delays? Partner with The Samit Shah Team for a clean plan that aligns permits, disclosures, pricing, and buyer expectations so you can sell with confidence in Milpitas.
FAQs
Do I need to disclose an unpermitted ADU in Milpitas?
- Yes. California sellers must disclose known conditions and unpermitted work, and recent AB 968 rules add extra renovation details for certain resales. Full, early disclosure reduces risk and builds buyer trust.
Will an unpermitted ADU stop my sale?
- Not always, but it often narrows the buyer pool and can trigger lender issues. Legalizing first or documenting a clear path with cost and timeline helps protect your price and timeline.
Can Milpitas make me live in the main home if I have an ADU?
- No. Under AB 976, cities cannot require owner occupancy in either the main home or the ADU. Verify any older city materials you see against this state rule.
Can I sell my ADU separately from the main house in Milpitas?
- Only if the City adopts an AB 1033 ordinance and you complete the required condo mapping steps. Confirm current local policy before promising separate sale.
How will an ADU affect my property taxes in Santa Clara County?
- The ADU is typically assessed as new construction. Expect a supplemental bill after completion, while the main home’s Prop 13 base usually stays intact.
What documents will appraisers and lenders ask for with an ADU?
- Common requests include permits, final inspections, clear square footage splits, leases if occupied, and utility details. Clean records help lenders use ADU income and keep your escrow on schedule.
What if my utility upgrades are still pending when I sell?
- Provide buyers with schedules and approvals, and build cushion into timelines. Utility work can affect appraisals and lender conditions, so early documentation helps avoid closing delays.
