Renting your ADU is one of the best financial decisions you can make as a Bellingham homeowner. But your ADU rental agreement needs clauses that go well beyond a standard apartment lease. When your tenant lives on the same property as you, the details matter — shared spaces, parking, noise, utilities, and outdoor use all need clear, written expectations from day one.
This guide covers every clause your ADU lease should include, the Washington State landlord-tenant laws you must follow, security deposit rules, insurance considerations, and practical advice from our experience helping Bellingham homeowners successfully rent their ADUs.
For rental income projections, see our Bellingham ADU rental income guide. For rules on short-term rentals, review our short-term rental regulations page.
Standard Lease Elements
Before adding ADU-specific clauses, your rental agreement needs to cover the fundamentals required under Washington State law. These are the baseline elements that every residential lease must include, regardless of property type.
Financial Terms
- Monthly rent amount and due date (typically the 1st of the month)
- Security deposit amount (maximum one month's rent in WA)
- Late fee amount and grace period
- Accepted payment methods (check, electronic transfer, etc.)
Lease Terms
- Lease duration (12-month terms are most common for ADUs)
- Move-in and move-out dates
- Renewal terms (auto-renew to month-to-month or require new lease)
- Termination notice requirements (20 days for month-to-month in WA)
ADU-Specific Lease Clauses
These clauses address the unique dynamics of renting a dwelling unit on the same property where the landlord (or another tenant) lives. A standard apartment lease does not cover these situations, and ambiguity here leads to conflict. Be explicit about every shared element.
Shared Space Boundaries
Define exactly which areas are the tenant's exclusive use, which are shared, and which are off-limits. Include the yard (specify which portions), driveway, any shared laundry area, garden space, patio or deck areas, and storage structures like sheds or garages. Attach a simple property map to the lease showing these boundaries. This one clause prevents more disputes than any other.
Parking Allocation
Specify the number of parking spaces allocated to the ADU tenant and their exact location. Under HB 1337, many Bellingham ADUs are no longer required to provide dedicated parking, but your tenant will still need to park somewhere. If street parking is the only option, state that clearly. If the tenant has a designated spot on the driveway, specify which one. Include rules about guest parking, overnight parking, and vehicle storage.
Utility Arrangements
Detail exactly how each utility is handled. If the ADU has a separate electric meter, the tenant pays PSE directly. If water and sewer are shared, specify whether utilities are included in rent, billed as a flat fee, or split based on usage. For internet, clarify whether the ADU has its own connection or shares the main home's service. Garbage and recycling service should be addressed — separate cans or shared.
Noise Expectations
This is especially important for attached ADUs where sound transmission between units is a factor. Specify quiet hours (commonly 10 PM to 8 AM), expectations around music volume, and any specific concerns like home offices requiring daytime quiet. Set realistic expectations — some normal living noise is unavoidable in any shared-property situation. Address it before it becomes a problem.
Guest & Occupancy Limits
Specify the maximum number of occupants (named on the lease), guest policies, and overnight guest limits. Most landlords allow guests for up to 7–14 consecutive nights before requiring lease modification. For an ADU, this matters because additional occupants affect water usage (especially if on septic), parking demand, and overall property impact.
Outdoor Space & Maintenance
Clarify who is responsible for lawn mowing, snow removal, landscaping, and general outdoor maintenance. For most ADU situations, the landlord handles major landscaping and the tenant maintains their immediate outdoor area. Specify whether the tenant can garden, install planters, hang outdoor lights, or modify outdoor spaces. Address BBQ grill use and outdoor furniture.
Pet Policy
ADUs present unique pet considerations due to the proximity to the landlord's home and shared outdoor spaces. If you allow pets, specify type, size, number, and any breed restrictions. Include rules about pet waste cleanup, leash requirements in shared outdoor areas, and noise (barking). A separate pet deposit or monthly pet rent is common. Note that emotional support animals and service animals cannot be restricted under federal and state fair housing laws regardless of your pet policy.
Storage Allocation
ADUs typically have limited interior storage. Specify whether the tenant has access to any exterior storage (shed, garage space, under-deck area). If no additional storage is provided, state that clearly so the tenant does not assume they can use the garage or other structures. Prohibit storage of hazardous materials, and address bicycle storage if relevant.
Washington State Landlord-Tenant Law Basics
Washington's Residential Landlord-Tenant Act (RCW 59.18) governs all residential rental relationships, including ADUs. As an ADU landlord, you must comply with these laws regardless of the informal relationship you may have with your tenant. Here are the key provisions every ADU landlord must know:
Required Disclosures
Washington law requires specific written disclosures before or at the time of move-in. These include: lead-based paint disclosure (for properties built before 1978 — this applies if the main home or ADU has pre-1978 components), mold disclosure, fire safety information, the name and address of the property owner and property manager, the location of the security deposit, and any known defects or habitability issues. Failure to provide required disclosures can void your ability to withhold the security deposit.
Entry Notice Requirements
You must provide at least 48 hours written notice before entering the ADU for non-emergency purposes. This includes maintenance visits, inspections, showing the unit to prospective tenants, or any other reason. The notice must state the date, approximate time, and purpose. Emergency access (water leak, fire, safety hazard) does not require advance notice. Even though the ADU is on your property, your tenant's unit is their private space.
Repair Responsibilities
You are legally required to maintain the ADU in habitable condition. This includes working plumbing, heating, electrical, weatherproofing, pest control, and structural integrity. When a tenant reports a repair need, you must respond promptly. For essential services (heat, water, electricity), repairs must begin within 24 hours. Non-emergency repairs should be completed within 10 days of notice. Tenants have the right to repair and deduct in certain circumstances if you fail to act.
Eviction Process
Washington State has specific legal grounds for eviction and strict procedural requirements. You cannot evict a tenant without cause (valid legal reason) and proper notice. Common grounds include non-payment of rent (14-day notice), lease violations (10-day notice to comply or vacate), and owner move-in (90-day notice). Retaliation against a tenant who exercises their legal rights (such as requesting repairs) is illegal. Always consult a landlord-tenant attorney before initiating any eviction.
Security Deposit Rules in Washington
Security deposit rules in Washington State are strict, and violations can result in you owing your tenant double the deposit amount. Understanding these rules before your first ADU tenant moves in is essential.
Maximum amount: The security deposit cannot exceed one month's rent. If your ADU rents for $1,600/month, the maximum security deposit is $1,600. You can collect first month's rent and the security deposit at move-in, but the deposit itself is capped at one month.
Move-in condition report: Washington law requires a written checklist describing the condition of the unit at move-in. Both you and the tenant should sign it. Take dated photographs of every room, appliance, and surface. This documentation protects both parties during the move-out deposit return process.
Return timeline: You must return the security deposit (or a written itemization of deductions) within 21 days of the tenant vacating and providing a forwarding address. The itemization must be specific — “cleaning” is not sufficient; you must describe what was cleaned and the cost. If you fail to return the deposit or provide an itemization within 21 days, you may owe the tenant the full deposit amount.
Allowable deductions: You can deduct for unpaid rent, damage beyond normal wear and tear, and cleaning costs to return the unit to move-in condition. Normal wear and tear (scuff marks on walls, minor carpet wear, fading) cannot be deducted. Intentional damage, pet damage, unauthorized modifications, and excessive filth are deductible.
Requiring Renter's Insurance
We strongly recommend requiring your ADU tenant to carry renter's insurance and naming you as an interested party on the policy. Renter's insurance is affordable ($15–$30/month for most tenants) and provides critical protection for both parties.
Tenant's Personal Property
Your landlord insurance does not cover your tenant's belongings. If a fire, theft, or water damage destroys their possessions, they need their own coverage.
Liability Protection
If a tenant's guest is injured in the ADU, the tenant's renter's insurance liability coverage responds first. This reduces claims against your homeowner's or landlord policy.
Loss of Use Coverage
If the ADU becomes uninhabitable due to a covered event, renter's insurance covers the tenant's temporary housing costs — not your responsibility.
For details on insuring your ADU as a landlord, see our ADU insurance guide.
Short-Term vs. Long-Term Rental Considerations
The decision between a long-term tenant (12+ month lease) and short-term rentals (nightly or weekly through platforms like Airbnb or VRBO) fundamentally changes your rental agreement needs, regulatory requirements, and income potential.
Long-term rentals are the simpler, more predictable option for most ADU owners. You have one lease, one tenant relationship, and consistent monthly income. Long-term tenants take care of routine maintenance, handle their own utilities, and create less property wear than high-turnover short-term guests. Current Bellingham long-term rental rates for ADUs range from $1,200 to $2,200/month depending on size and finish level.
Short-term rentals can generate higher gross income but require significantly more management, a different type of rental agreement (guest agreement rather than lease), compliance with Bellingham's short-term rental regulations, a business license, hotel/motel tax collection, and commercial liability insurance. Bellingham has specific rules about which zones allow short-term rentals and whether owner-occupancy is required.
For a detailed breakdown of Bellingham's short-term rental rules, including zones, licensing, and tax requirements, see our short-term rental regulations guide.
Long-Term Rental Pros
- Predictable monthly income with minimal management
- Less regulatory burden — standard residential lease
- Lower turnover, cleaning, and maintenance costs
Short-Term Rental Pros
- Higher potential gross income in peak seasons
- Flexibility to use the ADU for personal guests
- No long-term tenant relationship to manage
When to Consider Professional Property Management
Most ADU landlords manage their rental themselves since the tenant is literally in their backyard. However, there are situations where professional property management makes sense.
Consider a property manager if: You own multiple rental properties and the ADU is one of several units to manage. You travel frequently or live out of the area for extended periods. You prefer to have a professional buffer between yourself and the tenant. You are uncomfortable with the legal requirements of landlord-tenant law. You plan to do short-term rentals and need someone to handle turnovers.
What it costs: Property management for a single long-term rental ADU typically costs 8–12% of monthly rent. For a $1,600/month ADU, that is $128–$192/month. Most managers also charge a leasing fee (half to one full month's rent) for placing a new tenant. For short-term rental management, fees are typically 20–30% of gross revenue.
For most ADU landlords: Self-management is the practical choice. You live on the property, can handle maintenance requests quickly, and keep the management fee as additional income. A well-written rental agreement (with the ADU-specific clauses above) and a basic understanding of landlord-tenant law are usually sufficient.
Frequently Asked Questions
Can I charge my ADU tenant more than one month's rent as a security deposit?
No. Washington State law (RCW 59.18.260) limits the security deposit to a maximum of one month's rent for most residential tenancies. However, you can also collect a separate, non-refundable pet deposit or pet fee if you allow pets, and a non-refundable cleaning fee if disclosed upfront. The security deposit must be held in a trust account and returned within 21 days of move-out with a written itemization of any deductions.
Do I need a separate rental agreement for my ADU or can I use a standard lease?
You can use a standard Washington State residential lease as your starting point, but you should add ADU-specific clauses covering shared spaces, parking, utility arrangements, noise expectations, and outdoor space usage. A standard apartment lease does not address the unique proximity issues of an ADU on the same property as the landlord's home. We strongly recommend having a real estate attorney review your ADU-specific addendum before your first tenant signs.
How should I handle utility billing if my ADU shares a meter with my main home?
If you share a meter, you have three options: include utilities in the rent (simplest but you absorb usage risk), use a utility addendum that specifies a flat monthly utility fee based on estimated usage, or install sub-metering equipment to track actual ADU usage and bill the tenant proportionally. For transparency and fairness, sub-metering or a separate meter is ideal. If you include utilities in rent, price the rent to account for average utility costs so you are not subsidizing the tenant's usage.
What notice do I need to give before entering my ADU tenant's unit?
Washington State requires a minimum of 48 hours written notice before entering a tenant's dwelling for non-emergency purposes such as maintenance, inspections, or showing the unit to prospective tenants. For emergency situations like a water leak or fire, no advance notice is required. The notice must specify the date, approximate time, and purpose of entry. Even though the ADU is on your property and you may see the tenant daily, you must respect this legal boundary. Entering without proper notice is a violation of the tenant's rights under RCW 59.18.
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