Can You Legally Rent an ADU in NYC? A Breakdown of the Rules
Are you considering constructing an Accessory Dwelling Unit (ADU) in your New York City yard, basement, or attic? The million-dollar question comes next - can you rent it out?
Absolutely, but only if you follow NYC’s new laws and guidelines. Why is this important? Because if you don’t, you’ll be hit with fines and forced to tear down your brand-new unit.
Let’s deconstruct what you need to know for 2025.
First: Your ADU Must Be Lawful
Your ADU must be permitted by the NYC Department of Buildings (DOB), construction according to code, and you must receive a Certificate of Occupancy (CO) for the unit itself.
This is where some homeowners stumble. They assume that since NYC now “permits” ADUs, any converted space can be rented. The only legal method for a rental ADU is through the formal ADU permitting pathway, which opened in 2024 and is fully operational in 2025.
You Must Live on the Property
One of the most important guidelines for ADU rentals is homeowner occupancy.
NYC’s ADU program is intended for those who live on the property themselves - individuals who occupy the primary home and use the ADU for family, supplemental income, or community support.
However, NYC’s ADU rules specifically state that the homeowner must maintain primary residency on the property at the time of Certificate of Occupancy for the ADU. Accordingly, there is no rule preventing you from building an ADU, obtaining Certificate of Occupancy for the new ADU, and then changing your primary residence.
Likewise, if an individual purchases a property containing a legal ADU, they are not required to live in the ADU or the primary dwelling.
Who Can You Rent To?
You may rent your ADU to anyone - a relative, a friend, or even a stranger on Craigslist. The only restriction is that the rental must last for at least 30 days. Your ADU must also be rented as a complete, independent unit, not individual rooms or shared spaces.
What about Airbnb or other short-term rental programs? Third-party rental programs are still illegal under NYC’s existing short-term rental regulations.
Rent Control, Security Deposits & Lease Rules
All normal NYC landlord-tenant laws apply to your ADU. For example:
If renting for more than 30 days, you must have a written lease agreement.
You may only charge one month’s rent as a security deposit.
Income Limits, Tenant Screening & Fair Housing
You are required to follow NYC’s fair housing laws, which protect tenants from discrimination based on race, gender, source of income, disability, and more.
What Happens If You Rent an Illegal ADU?
The risks of renting an ADU without a permit include:
Fines of up to $15,000 per violation
A DOB stop-work or vacate order
Ineligibility for future permits
Liability for tenant injuries in an unsafe unit
The Takeaway
Yes - you can legally rent an ADU in NYC in 2025.
But you must:
✅ Have a legal ADU with a Certificate of Occupancy
✅ Occupy the property when filing for Certificate of Occupancy
✅ Follow all landlord-tenant laws
✅ Avoid short-term rentals
Once that’s all handled, you’ll have a passive income stream for years to come.