Legal division between an ADU vs a roommate situation?

[Reese C.]

Hello BP,

I am looking at purchasing a property that would be perfect for a house hacking situation. The property has a walk-out basement with a room, living room-like area and a space for a kitchen/kitchenette. It would only need minor renovations to make the space ready to rent. However, I am not sure that if this space is converted, it would be considered an Accessory Dwelling Units (ADU), which the city prohibits.

I am trying to understand from a legal standpoint, where does a roommate scenario end and an ADU scenario begin? Is it based off of features (like having a fully functional kitchen and separate entrance), the share of utilities, intent, or all/none of the above?

Thanks!