Monterey, CA Accessory Structures: ADU Rental Restrictions (2026)

Section 38-112.6(A)(3) requires a property owner to record a covenant, in a form the City Attorney prescribes, before the Building Division will issue a permit for an accessory dwelling unit. The covenant runs with the land, meaning it binds future owners as well, and it has two commitments: the ADU cannot be sold separately from the primary single-family or multifamily dwelling, and neither the ADU nor a junior ADU on the same parcel may be used for short-term residential rentals of fewer than 30 consecutive days. A copy of the recorded covenant must be filed with the Building Division before the permit is issued, so the restriction is locked in at the very start of the permitting process rather than added later.

The 30-day floor mirrors the definition used elsewhere in California to distinguish a long-term rental from a vacation rental subject to transient occupancy tax and short-term rental regulation, meaning an ADU cannot be listed on platforms like Airbnb or Vrbo for stays shorter than a month. The restriction applies whether the ADU is new construction, a converted garage, or built within the walls of the existing house, and it applies equally to junior ADUs, which carry a parallel covenant requirement elsewhere in the same section prohibiting rental for fewer than 30 consecutive calendar days. There is a narrow carve-out for ADUs developed by a qualified nonprofit under Government Code Section 65852.26, which may instead be conveyed under a tenancy-in-common agreement rather than sold as part of the primary residence.