Accessory Dwelling Units (ADUs) are exploding in popularity across Colorado. With high housing demand, flexible living needs, and new local zoning changes, ADUs offer homeowners an amazing opportunity to add living space and increase property value.

But… ADU projects are also some of the most misunderstood and commonly derailed construction jobs in the state.

If you’re considering building an ADU in Colorado, here are the biggest issues that can go wrong and how to prevent them.

1. Misunderstanding Local Zoning Laws

Colorado doesn’t have one statewide ADU rulebook. Each city; Denver, Lakewood, Littleton, Boulder, Arvada, Wheat Ridge, and mountain towns like Eagle and Vail has its own set of:

• Lot size requirements
• Height limits
• Parking requirements
• Owner-occupancy rules
• Setback restrictions

Where things go wrong:
Homeowners assume ADUs are “automatically allowed,” only to discover mid-project that zoning prohibits their design or requires major changes.

How to avoid it:
Always start with a site evaluation and zoning review. A general contractor familiar with Colorado cities can quickly confirm what is and isn’t allowed before you spend money on plans.

2. Underestimating Budget + Cost Escalations

ADUs are essentially mini homes. They need foundations, utilities, kitchens, baths, insulation, and finishes.

Where things go wrong:

• Homeowners assume ADUs are cheap “shed-style” projects
• Utility connections cost more than expected
• Material prices fluctuate
• Hidden soil or drainage problems drive up foundation costs

How to avoid it:
Get a detailed, line-item estimate and plan a 10–15% contingency for surprises.

3. Site Access Challenges

Many Colorado homes have tight yards, slopes, or limited access to bring in equipment.

Where things go wrong:
Limited access forces hand-digging or smaller equipment, which increases time and labor costs.

How to avoid it:
Do a site walkthrough with your contractor to understand logistical challenges before design begins.

4. Permit Delays

Colorado cities, especially Denver, Boulder, Golden, and mountain municipalities—are notorious for slow review times.

Where things go wrong:
Plans sit in review for weeks (sometimes months). Incorrect paperwork can cause immediate rejection.

How to avoid it:
Submit complete, code-compliant plans with structural, mechanical, and energy documents. Hire a GC who knows local reviewers and what they look for.

5. Utility Tie-In Surprises

Most ADUs need connections for:

• Sewer
• Water
• Gas
• Electric

Where things go wrong:

• The sewer line is too shallow, too old, or in the wrong spot
• City requires a completely new water tap
• Electrical service is too small to support the ADU
• Utility companies delay scheduling in busy seasons

These can easily add $10,000–$25,000+ to a project.

How to avoid it:
A pre-construction utility locate and capacity check can prevent major surprises.

6. Foundation & Drainage Issues

Colorado soils can be expansive, rocky, or unstable depending on the region.

Where things go wrong:

• Soil expands and contracts, causing foundation movement
• Drainage issues cause water pooling
• Excavation uncovers boulders or unexpected bedrock

How to avoid it:
Always get a geotechnical (soils) report before engineering the foundation.

7. Design Mistakes

ADUs need smart, efficient design. Poor planning can cause:

• Awkward room layouts
• Insufficient storage
• Bad natural light
• Overbuilt or underbuilt spaces
• Additional engineering costs

How to avoid it:
Use a designer or architect experienced with small-space design and Colorado codes.

8. Hiring the Wrong Contractor

ADUs are more complex than typical remodels. Not all contractors understand the zoning, utilities, or engineering involved.

Where things go wrong:

• Bad planning
• Incomplete scope
• Poor communication
• Delays and cost overruns
• Incorrect permitting

How to avoid it:
Partner with a licensed, insured general contractor who has ADU experience in your specific city or county.

9. Unrealistic Timelines

An ADU project—from concept to completion—usually takes:

• 2–4 months for design, planning & permits
• 5–9 months for construction

Where things go wrong:
Homeowners expect a 3–4 month total project.

How to avoid it:
Get a realistic schedule upfront and plan around utility and permitting delays.

10. Not Planning for Long-Term Use

Some homeowners design an ADU for one purpose (guest space), but later want to use it for:

• Renting
• Aging parents
• Short-term stays
• Home office

Poor planning can limit future use.

How to avoid it:
Design with flexibility and resale value in mind from day one.

Final Thoughts

Building an ADU in Colorado can be one of the smartest investments a homeowner can make, but only if you plan it correctly, understand local regulations, and partner with a contractor who knows the process inside and out.

If you would like to have a conversation or want any questions about ADU's, give us a call at (720)968-7874.