Bloomington, IN Accessory Structures: ADU Rental Restrictions (2026)
Key Facts
- Registration required
- HAND registration + certification before rental occupancy
- Deed restriction
- Recorded with Monroe County Recorder before building permit
- Separate sale
- ADU may never be sold apart from primary unit
- Owner occupancy
- Primary dwelling or ADU must be owner's residence
- Violation remedy
- Approval withdrawn; ADU may be ordered removed
Summary
In the City of Bloomington an accessory dwelling unit rented out must register with Housing and Neighborhood Development and be certified before occupancy, and the property owner must record a deed restriction barring separate sale of the ADU under Bloomington Municipal Code Section 20.03.030(g)(5).
(G)Owner Occupancy.i.ADUs shall only be permitted on a property where either the primary dwelling unit or the ADU is occupied by the owner of the property. ... iii.Any primary dwelling or ADU used as a rental unit shall register with the Department of Housing and Neighborhood Development (HAND) and receive appropriate certification prior to occupancy.(H)Recorded Documents.i.Prior to receiving a building permit for an ADU, the petitioner shall record a deed or title restriction with the Monroe County Recorder, in a form acceptable to the City, stating that:1.The ADU shall not be sold separately from the primary unit; and2.Either primary dwelling unit or the ADU shall be occupied by the owner(s) of record as their primary residence.ii.If at any time the City determines that the subject property is in violation of this UDO or in violation of the deed or title restriction, the ADU approval shall be withdrawn. In addition, the City may require that the ADU be removed from the property, which may include but is not limited to removal of any second kitchen on the property, including all kitchen appliances and cabinets.
Full Breakdown
Bloomington's Unified Development Ordinance treats accessory dwelling units as a use tied to owner occupancy, not free-standing rental stock. 030(g)(5)(G) requires that either the primary dwelling or the ADU be occupied by the property owner, and the owner must keep a signed affidavit on file with the Planning and Transportation Department stating which unit they occupy, updating it whenever they switch. Any primary dwelling or ADU that is instead used as a rental must register with the Department of Housing and Neighborhood Development (HAND) and obtain HAND certification before a tenant can move in; this sits alongside the citywide rental registration and inspection program in Title 16 of the Municipal Code.
030(g)(5)(H) further requires the petitioner to record a deed or title restriction with the Monroe County Recorder stating that the ADU can never be sold separately from the primary house, and that either the primary dwelling or the ADU must remain the owner's residence. These are permanent restrictions that run with the land, not conditions that expire once the ADU is built. A homeowner who wants to add a rental ADU in Bloomington therefore has to plan for both the HAND registration/certification step and the recorded deed language before the Planning and Transportation Department will sign off on the building permit.
Violations & Fines
If the City determines the property violates the UDO or the recorded deed/title restriction, the ADU's approval is withdrawn outright. The City may then require the ADU to be physically removed from the property, which the ordinance says can include tearing out any second kitchen along with its appliances and cabinets, not just revoking a paper permit.
Frequently Asked Questions
Can I rent out my ADU in the City of Bloomington?
Can I sell my Bloomington ADU separately from the house?
What happens if I violate Bloomington's ADU rules?
Sources & Official References
Other rules in Bloomington
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