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Can You Legally Turn a Shed Into a House?

It's legal to turn a shed into a house with the right zoning laws, building codes, and permits. Learn how to turn a shed into a house with Cottage.

January 1, 2018

What if the old shed in your backyard could be more than just an eyesore? Or what if you could take advantage of empty space in your yard? Turning a shed into a house can be more than just a dream with proper planning and support. Today, we're talking about shed makeover ideas. Let's dive in.

Why Would You Need to Turn a Shed Into a House?

If you’re thinking about why you would need to turn a shed into a house—you’ll want to read on. Turning a shed into a house could provide you with entertainment space, temporary space for guests, permanent space for family members, or even rental income.

Entertainment Space

Some people love to entertain but simply don’t have the space for it. If you fall into this category, a shed could serve as the perfect entertainment space. For example, you could build a bar area in your converted shed and serve drinks to your guests.

Additionally, you could build a television or movie room in your converted shed to host movie nights and watch parties for your favorite shows. You could host game nights with a pool table, foosball table, ping pong table, or dartboard in your converted shed.

Temporary Space for Guests

Instead of guests having to stay at a hotel, you could host them right in your backyard in your converted shed. A shed guest space is actually ideal as it provides your guests with extra privacy while still keeping them close by.

It’s totally possible for you to fit everything your guests need into a shed, including a bed, dresser, television, and bathroom, with the right space, plan, and effort. Your guests will love it, and you will, too.

Permanent Space for Family Members

It’s not uncommon for family members to need to move in—whether it’s adult children trying to save money for a house or aging parents requiring extra help. Converting a shed into a tiny home could be the perfect solution for multi-generational living.

That way, your parents or children can have their own space while also saving money and staying safe. You could potentially take your typical guest suite a step further for more permanent guests with features like a kitchenette.

Rental Income

Airbnb is all the rage these days, and you could take advantage of this trend by converting a shed into a rentable space. Even if you don’t want to do temporary rentals, you could rent out the space on a more long-term basis as well.

Depending on how much space you have and the work you put into the space, you could potentially earn thousands of dollars in income from renters on a monthly basis. Just think about what you could do with that extra money.

With this extra cash flow, you could pay for the renovations in the main house you’ve always wanted, you could pay for a nice vacation, or you could pay off your mortgage. The possibilities are endless.

Can You Legally Turn a Shed Into a House?

Now you must be thinking that based on all these benefits, there has to be a catch. After all, there’s no way that it’s actually legal to turn a shed into a house, right? In reality, turning your shed into a house could be perfectly legal.

Make sure you take these factors into consideration:

Zoning Laws

Zoning laws and regulations could affect your ability to legally turn a shed into a house. A piece of land can either be zoned for commercial, industrial, residential, or agricultural purposes. If you’re purchasing a new piece of land for your shed, check to make sure that it’s zoned for residential purposes.

If you’re adding a tiny shed home to your existing home, then you don’t have to worry about this aspect of zoning. However, you need to check local zoning laws to see if you’re able to have an accessory dwelling unit (ADU) on your property. In some states such as California, these are allowed with minimal restrictions, but regulations vary by area.

Building Codes

Building codes could also affect your ability to legally turn a shed into a house. If you’re looking to convert an old shed that’s basically falling apart, this structure might not meet the building codes required to legally convert it.

Converting a new shed may be easier, but oftentimes there are different codes for sheds and houses. These building codes vary depending on location, but they must be complied with.

HOA Rules

Believe it or not, but your HOA could actually prevent you from legally converting your shed into a tiny home. Many HOAs have rules that restrict what you can do with your property, and you may not be allowed to add a shed without their permission. So before you go any further, make sure to check your HOA rules related to both sheds and ADUs.


Finally, your shed home needs to be properly permitted in order to be considered legal and habitable. Depending on where you are and the size of your shed, you may or may not have to go through the residential permitting process. Some small sheds can be built and modified without a permit, while others require you to submit building plans and elevations.

How do I Legally Turn a Shed Into a House?

While you may be allowed to turn a shed into a house, you still need to follow these steps to ensure that the process is done safely and legally:

Step 1: Find the Space for It

In order to turn a shed into a house, you need to make sure that you actually have the space for it. If you’re using your existing yard, you may have to deal with setback requirements that state that the unit has to be a certain distance away from the main house and any lot lines. If you’re using a new lot, you will have more freedom and room.

Step 2: Check the Zoning Laws, Building Codes, and HOA Rules

From there, you need to check the zoning laws, building codes, and HOA rules, if applicable. Make sure that the property is zoned residential. Check to see if you’re required to meet residential building codes. And finally, check to see if you’re allowed to build and/or convert a shed per your HOA rules. Some areas have ADU regulations that supersede HOA requirements, and so sometimes the local laws can work in your favor.

Step 3: Apply for Any Necessary Permits

If everything looks good based on your due diligence, it’s now time to apply for any necessary permits for the structure. Keep in mind that this process can be tedious and time-consuming, so it’s important to stay patient.

If you are building the shed as an Accessory Dwelling Unit, the unit will need to be designed with a bathroom, living space, and kitchenette at a minimum. Cottage has designed units smaller than 200 sq.ft., so anything is possible!

Step 4: Purchase Your Shed or ADU

Now that you have your permits, you should purchase the shed if you’re not working with an existing one. Make sure that the shed is the right size for your space, meets any applicable codes, and comes with the features you’re looking for.

If you’re building an Accessory Dwelling Unit that’s the size of a shed, you’ll want to work with a reputable contractor such as one in Cottage’s network to ensure that the job is done correctly.

Step 5: Construct Your Shed or ADU

The real work begins as it’s finally time to build your shed based on the manufacturer’s instructions. If the structure is a full stick-built ADU such as what Cottage builds, your licensed general contractor will oversee this construction.

Step 6: Convert Your Shed

Convert your shed into a liveable space by insulating it, adding plumbing, wiring electricity, putting up drywall, painting, and adding fixtures like lighting, flooring, appliances, cabinets, etc., until you’re satisfied with your results. If you’re working with Cottage or a contractor, they will ensure that this is done correctly.

Step 7: Move In

Finally, you can enjoy your hard work by adding the finishing touches to your converted shed and moving in.

Is There a Better Way to Turn a Shed Into a House?

While it may be legal to turn a shed into a house, it’s definitely not easier. But what if there was a better way to go about the entire process? There is with Cottage.

With Cottage’s hassle-free process, you never have to worry about things like permitting and construction. Instead, you just give your input on the design, and we make it happen with our team of architects, designers, and contractors.

When you build custom from the ground up, you can get everything you want and need in a space. Plus, Cottage can support you on design, engineering, site prep, utility connections, and foundation — all aspects of the process that would cost you extra if you were going the prefab shed route.

Cottage can work with any space, any style, and any requirements. For example, if you need an ADA or kid-friendly space, Cottage can make it happen. So reach out to the Cottage team today for a free estimate.

Interested in converting your shed into a house? Click the "Get Started" button on the top right hand corner to get a Free Consultation and Estimate Today.

Final Thoughts

Turning a shed into a house is likely legal if you do it the right way. But instead of worrying about the laws and regulations all on your own, leave it to a professional tiny home builder like Cottage.


California's New Accessory Dwelling Units Laws: What You Should Know | Forbes

Do I Need a Building Permit for My Project? | CSLB

Amazing Makeover Ideas for Your Garden Shed | Better Homes & Gardens