Investor · Los Angeles · Member since 2021 · 5 posts · 1 vote
I recently completed an ADU renovation on my property in Los Angeles and am hoping to rent it out most of the year. I received an RSO bill and am not sure if I qualify for an exemption. I rent my front house out to roommates. Do I need to report rental income from roommates and the Adu? Or as my primary residence, is the whole place is exempt? Any guidance would be great!
Rental Property Investor · Torrance, CA · Member since 2016 · 263 posts · 132 votes
4y
@Clara Settje I haven't personally purchased any rental units in the City of Los Angeles (LARSO has successfully scared me off so far), but I did have these questions figured out a few years ago. I would bet that your ADU is exempt because I assume that it was built recently. The front house is now one of multiple single family dwellings on the parcel which suggests to me that it not exempt, but I don't remember the impact of whether or not you partially owner occupy. Your best bet would be to call LAHD and follow up to get the answer from them in writing.
Architect & Investor · Los Angeles, CA · Member since 2018 · 24 posts · 10 votes
4y
I agree with Matthew - your ADU should be exempt from the RSO/SCEP stuff with the city since it is brand new construction. IF it happened to replace an old unit on the property though, you may still be liable to pay the RSO/SCEP fees. It sounds as if you live in the front house with roommates, so that makes it your primary residence, you can exempt that too under that LAHD exemption.