If you are a landlord in San Diego, you might be sitting on a legal landmine without even realizing it. Perhaps you converted your garage into a "cozy studio" back in 2015, or maybe you built an Accessory Dwelling Unit (ADU) but never quite got around to that final Certificate of Occupancy. You might think, "As long as the tenant is happy and the rent is paid, what's the harm?"
In reality, the "harm" could cost you years of back rent and thousands of dollars in relocation fees. As we move through 2026, California’s rental landscape has become significantly more protective of tenants and more punitive toward unpermitted units. Whether you are a property owner trying to do the right thing or a tenant wondering why your "apartment" doesn't have a stove, understanding the legality of your rental is the first step toward avoiding a financial catastrophe.
As experienced eviction attorneys in San Diego, the Law Office of Andrew H. Griffin, III, APC has spent over 40 years navigating the intersection of real estate law and landlord-tenant disputes. With our unique perspective as both a law firm and a California-licensed real estate broker, we see the traps that others miss.
Is your rental unit actually legal?
A rental unit is considered "illegal" if it was built or converted without the proper permits from the City or County of San Diego. This most commonly includes garage conversions, "granny flats," or partitioned sections of a main house that lack their own separate address, utility meters, or, most importantly, a Certificate of Occupancy.
You might have a written lease and a tenant who has been paying for years, but if the unit itself isn't recognized by the building department as a habitable dwelling, the legal foundation of your relationship is non-existent. In San Diego, if a unit does not comply with local zoning and building codes, it simply cannot be legally rented.
Can you legally collect rent for an illegal unit?
The short answer is no. In California, a lease for an illegal unit is considered void from the very beginning (void ab initio). Because the object of the contract: renting an unpermitted space: is illegal, the contract itself has no power.
If you are a landlord, this means you generally cannot legally collect or keep rent for these units. If a tenant stops paying and you attempt to file an eviction for non-payment of rent, a savvy san diego eviction attorney representing the tenant will likely point out the illegality of the unit. This often results in the court dismissing the eviction case because you cannot demand rent for a unit that shouldn't exist in the eyes of the law.
Notes for Business Owners
If you hold rental properties within a business entity (like an LLC or Corporation), the risks are even higher. Commercial landlords or residential investors with multiple units must ensure all units are permitted. A single "illegal" unit in your portfolio can trigger a wider audit, potentially exposing your entire business to massive liability and "disgorgement" claims that could threaten your company's solvency.
Can tenants get their money back?
This is where the situation turns from a headache into a full-blown financial crisis for landlords. Because the lease is void, tenants may be entitled to a "disgorgement" of rent. This means they could sue to have a full refund of all rent paid for the past three to four years.
Imagine a tenant has been paying $1,500 a month for a converted garage for three years. If a court determines the unit is illegal, you could be ordered to pay back $54,000. This isn't just a hypothetical scenario; San Diego courts are increasingly seeing these types of "rent refund" claims as tenants become more aware of their rights.
Do you have to pay the tenant to move out?
Yes. If a unit is found to be illegal, the landlord is usually required to terminate the tenancy to comply with code enforcement. However, since this is a "no-fault" move-out (the tenant didn't do anything wrong), the San Diego Municipal Code § 98.0706 requires the landlord to provide relocation assistance.
As of 2026, landlords in the City of San Diego must generally pay the equivalent of two to three months of rent to the tenant to help them move. If the tenant is a senior (62+) or has a disability, that requirement often leans toward the higher end of that scale. This payment must be made regardless of whether the tenant owes you back rent or if you think the situation is "unfair."
What are the new 2026 habitability requirements?
Even if your unit is permitted, it must meet strict habitability standards to be "tenantable." As of January 1, 2026, California Civil Code § 1941.1 has been updated with a major requirement: a working stove and refrigerator.
Unless the lease specifically notes that the tenant is providing their own (and even then, there are strict rules), the landlord is now responsible for providing and maintaining these appliances. If you fail to provide a working stove and fridge, or if they are subject to a safety recall and you don't fix them within 30 days of notice, you could be liable for damages ranging from $100 to $5,000.
If you are struggling with a habitability claim or need guidance on these new 2026 standards, you should contact a san diego eviction attorney immediately. You can reach the Law Office of Andrew H. Griffin, III, APC at 619 853-3009 or through our contact page.
Why do you need an attorney with broker expertise?
The laws surrounding illegal units and evictions in San Diego are a tangled web of municipal codes, state statutes, and real estate regulations. Most eviction lawyers in San Diego only see the courtroom side of the battle.
At the Law Office of Andrew H. Griffin, III, APC, Andrew Griffin brings over 40 years of experience as both a seasoned attorney and a California-licensed real estate broker. This dual expertise means we understand the market value of your property, the intricacies of property management, and the high-stakes legal consequences of unpermitted units. Whether you are dealing with a difficult tenant in an unpermitted ADU or you are a tenant living in unsafe conditions, we provide the 24/7 accessibility and bilingual support you need.
How can you protect yourself today?
If you are a landlord, the best time to audit your units was yesterday. The second best time is right now. If you suspect a unit might be unpermitted, do not wait for a code enforcement officer to knock on your door or for a tenant to file a lawsuit.
- Review your permits: Check with the San Diego Development Services Department to ensure every unit you rent has a valid Certificate of Occupancy.
- Update your appliances: Ensure all units have working stoves and refrigerators to meet the 2026 Civil Code § 1941.1 standards.
- Consult a professional: Before you sign a new lease or attempt to evict a tenant from a questionable unit, get a legal review.
If you are a tenant, knowing your rights is your best defense. If you are living in a garage, a shed, or a partitioned room without proper amenities, you may not only be entitled to stop paying rent but also to receive a refund of what you’ve already paid.
Contact a San Diego eviction attorney today
The landscape of California real estate is shifting rapidly. With the 2026 updates and San Diego’s strict local ordinances, the cost of "winging it" has never been higher. Don't let an illegal unit ruin your financial future or your peace of mind.
Whether you need help navigating a "no-fault" relocation, defending against a habitability claim, or even if you are looking for a bankruptcy attorney to help manage the fallout of a real estate crisis, we are here to help. Our firm offers bilingual services in English and Spanish and is available via text for your convenience.
Law Office of Andrew H. Griffin, III, APC
Phone: 619 853-3009
Contact: https://www.andrewgriffinlawoffice.com/contact/
