What Documents Should You Get During Escrow on an Already-Built ADU Property?
The escrow period is your window to fix that before it becomes your problem. Here's exactly what documents you should be requesting — and what each one tells you.
1. The Building Permit for the ADU
This is the starting point. Every legally constructed ADU in California should have a building permit on file with the city or county — California's ADU law makes the permitting pathway mandatory for all jurisdictions, and cities cannot block or unreasonably delay a ministerial permit. You can pull permit records from the city's public records portal or ask your agent to request them through escrow.
What you're looking for: a permit that specifically covers the ADU — not just a general remodel permit for the main house. The permit should describe the scope of work that matches what's actually there. If the seller says it's a "permitted ADU" and the only permit you find is for a bathroom addition from 2009, that's a red flag.
Some cities in Orange County make this easy. Others require a public records request that takes a few business days. Start early.
2. Approved Plans (City-Stamped)
When a permit is issued, the city approves a specific set of plans. Those stamped plans become the legal record of what was supposed to be built. If you can get them, you can compare them to what's actually on the property during your inspection.
This matters more than people realize. An ADU might have a permit, but if the builder deviated from the approved plans — different square footage, moved a wall, changed the entry location — that work may not have been re-inspected or re-approved. You're buying what's on the ground, but the city's records describe something else.
Ask the seller for these. If they don't have them, the city should have them on file.
3. Final Inspection Sign-Off (or Inspection Records)
A permit being issued isn't the same as a permit being finaled. Many homeowners pull a permit, do the work, and never call for a final inspection — and as explained in what to check when you're verifying ADU potential during escrow, this open-permit problem is one of the most common issues buyers discover too late.
Ask for the inspection history, not just proof that a permit was pulled. You want to see that every required inspection phase was completed — framing, electrical, plumbing, and final. If the permit shows a series of inspections but no final, that's an open permit. An open permit is a problem you'll inherit.
Some lenders won't fund a loan on a property with open permits. Even if yours will, it limits your future options when you go to sell or refinance.
4. Certificate of Occupancy for the ADU
The Certificate of Occupancy — often called a CO or C of O — is the document the city issues at the end of a successful final inspection. It says the structure is safe and legal to occupy. This is the single most important piece of documentation you can get on a built ADU.
Not every jurisdiction issues a separate CO for an ADU on an existing single-family lot. Some cities in Orange County use the final inspection card as the equivalent. The HCD ADU Handbook outlines what a properly finaled ADU looks like from a state standards perspective — useful context when a city's local records are unclear. One nuance worth knowing: as covered in this post on ADU certificates of occupancy in Orange County, COs for new detached ADUs and COs for the primary residence are sometimes handled differently, and the rules vary by city.
If the seller can't produce this and the city has no record of it, you're likely looking at an unpermitted unit — even if the seller doesn't describe it that way.
5. Preliminary Title Report — and What to Look For
Your title company will generate a preliminary title report early in escrow. Read it, or have your agent walk you through it. Specifically, look for:
Easements that affect the ADU footprint. If there's a utility easement running through the area where the ADU sits, that's a structural issue that may affect insurability or lender approval.
Recorded liens or violations. Some cities record code enforcement violations or unpermitted structure notices on title. These show up here.
How the property is described. If the assessor's records describe the lot as a single-family residence and make no mention of a secondary unit, that's worth investigating. It may indicate the ADU was built without the city or county's knowledge.
6. Property Tax Records and Assessor Data
After an ADU is built legally, the county assessor typically adds it to the property's assessed value at the time of permit finalization. Pull the current assessor's records and see how the property is described.
If the main home is 1,400 square feet and the ADU is 600 square feet, the total living area on the assessor's records should be close to 2,000 square feet. If it shows 1,400, the ADU may not have been disclosed to the assessor — another sign of unpermitted construction.
This is also useful for understanding what you're actually paying for from a tax perspective going forward.
7. Utility Documentation — Meters and Service
Find out how utilities are set up. Is the ADU on a separate electric meter? A separate gas meter? Is water shared or split?
This affects two things: how you'll manage the rental and whether a lender will count the ADU's income. Separately metered units are easier to manage as rentals and are viewed more favorably by underwriters. If everything is on one meter, that's not a dealbreaker, but you'll need a system in place for handling utility splits with your tenant.
Also confirm that the ADU has its own address or unit number assigned by the city. This matters for mail delivery, tenant identification, and sometimes for rental income documentation.
8. Existing Lease Agreement (If Tenant-Occupied)
If the ADU already has a tenant, get a copy of the lease during escrow — not after closing. You need to know the lease term and expiration date, the monthly rent (and whether it's at or below market), whether the lease is month-to-month or fixed-term, and any special provisions like pets, parking, or utilities included.
California law protects tenants significantly. As covered in selling an ADU property with an active tenant in Orange County, a tenant can remain through the end of their lease term even after a sale closes. If they're month-to-month, different rules apply depending on how long they've lived there. Understanding who you're inheriting before you close is critical.
9. Rental Income History (If You're Using It to Qualify)
If your lender is factoring the ADU's rental income into your loan qualification, they're going to need documentation. Typically that means 12 to 24 months of bank statements showing rent deposits, tax returns (Schedule E) showing rental income from the property, or a signed lease and an appraiser's market rent analysis if the unit is currently vacant.
Fannie Mae's 2026 ADU guidelines now allow single-unit properties to have up to three ADUs — a change that also expanded how lenders can factor rental income into underwriting. Your lender will tell you what they need specifically, but gather everything you can during escrow so you're not scrambling at the end.
10. Any HOA Documents (If Applicable)
ADUs in HOA communities are a complicated area. California state law prohibits HOAs from banning ADUs outright, but HOAs can still impose design and approval requirements. If the property is in an HOA, request the CC&Rs, any HOA approval letters for the ADU construction, and meeting minutes where the ADU was discussed if available.
You want to confirm the ADU was built in compliance with HOA rules — or at least that the current HOA isn't going to come after you for something the previous owner did.
The goal of collecting all of this during escrow isn't to scare you away from the deal. It's to make sure you know exactly what you're buying. A fully permitted, CO-bearing ADU with a tenant in place and documented rental history is a genuinely valuable asset. But the only way to know you have that — rather than a well-built structure with no paperwork — is to do the work during escrow, while you still have the leverage to negotiate.
If you're looking at ADU properties in Orange County and want help knowing what to ask for and when, reach out. This is what I do.
