Berman Introduces Bill to Protect Homeowners from Fraudulent ADU Builders

SACRAMENTO – Today Assemblymember Marc Berman (D-Menlo Park) announced the introduction of AB 559, which will protect homeowners from fraud by limiting the amount that contractors constructing Accessory Dwelling Units (ADUs) can request upfront or as progress payments. Importantly, AB 559 will toughen penalties for contractors who violate these crucial consumer protections. This bill is sponsored by the Contractors State License Board (CSLB) in response to a high-profile case involving a contractor who defrauded homeowners out of hundreds of thousands of dollars and abandoned homeowners with unfinished ADUs.

“California is in the midst of a severe housing crisis, and ADUs are a critical part of the overall effort to build more housing units. Unfortunately, as demand for ADUs has grown, so too has exploitation of homeowners by unscrupulous contractors,” said Assemblymember Marc Berman. “AB 559 will ensure that homeowners are not scammed out of their life savings or left abandoned with unfinished ADUs. This bill responds directly to complaints from homeowners who paid contractors for ADUs that were never completed.”

“AB 559 will prevent dishonest contractors from financially harming consumers by requesting and accepting excessive payments for accessory dwelling unit construction that is incomplete or not performed. CSLB is pleased to partner with Assemblymember Berman on this bill to protect consumers,” said CSLB Registrar David Fogt.

CSLB has recently received more than 400 complaints regarding contractors failing to complete ADU construction projects and causing considerable financial harm to consumers. This has resulted in the license revocation of one high-profile company and possible disciplinary action against others. CSLB held a Legislative Committee meeting on September 18, 2024, providing a public forum to discuss enhancing consumer protection for residential construction in the Contractors State License Law. As a result of this meeting, CSLB staff identified areas in the law that can be strengthened to better protect consumers and discourage unlawful activity by contractors, which are included in AB 559.

Assemblymember Marc Berman represents the 23rd Assembly District, which includes southern San Mateo County and northern Santa Clara County in the heart of the Silicon Valley. Website of Assemblymember Marc Berman: www.assembly.ca.gov/Berman. Assemblymember Marc Berman’s official headshot is available here.