As we navigate the ever-evolving real estate landscape in Maryland, new legislation is making waves by addressing the pressing need for more affordable and flexible housing. One standout law that took effect on October 1, 2025, is the Small Houses Act of 2025. This act, enacted through Senate Bill 891 and House Bill 1466, promotes the development of Accessory Dwelling Units (ADUs)—also known as small houses—on properties zoned for single-family homes. It's designed to boost housing availability and affordability, which is great news for both buyers and sellers in our state.
What Does the Small Houses Act Allow?
Under this new law, homeowners can add a secondary dwelling unit to their property. This could mean converting existing structures like garages or basements into livable spaces, or even building entirely new units. ADUs can be:
- Detached: Standalone structures in the backyard.
- Attached: Sharing at least one wall with the primary house.
- Conversions: Transforming parts of the existing home, such as an above-garage apartment.
Importantly, these units must be on the same lot as the main single-family dwelling and cannot exceed 75% of the primary unit's size. This flexibility opens up creative ways to utilize space without needing to buy additional land.
To give you a better idea, here are some visual examples of what ADUs can look like:
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Key Requirements and Timeline
The act establishes a statewide framework that prohibits local governments from imposing unreasonable restrictions on ADUs. Charter counties and Baltimore City must adopt their own laws by October 1, 2026, to authorize these developments while ensuring they meet public health, safety, and welfare standards. The permitting process is intended to be straightforward, making it easier for homeowners to get started without excessive red tape.
If you're considering adding an ADU, check with your local jurisdiction for specific zoning rules, building codes, and any required permits. It's also wise to consult a real estate professional or attorney to ensure compliance.
How This Impacts Buyers and Sellers
For buyers, this law means more opportunities to find properties with built-in flexibility. Imagine purchasing a home that already has an ADU for aging parents, adult children, or even as a rental to offset mortgage costs. It could make homeownership more attainable in a market where inventory is tight and prices are high.
For sellers, adding an ADU before listing can significantly enhance your property's value and appeal. It provides potential for passive income through renting, or simply offers multigenerational living options that many families seek today. In a competitive market, homes with ADUs stand out and may sell faster or at a premium.
Overall, the Small Houses Act is a step toward addressing Maryland's housing shortage by encouraging innovative use of existing properties. It promotes affordability without sprawling development, benefiting communities across the state.
Real Estate Terms 101 ~ Understanding Real Estate Lingo Is Important
Earnest Money Deposit: Commonly called EMD, this is a sum of money (typically 1-3% of the purchase price) that a buyer provides when making an offer on a home to show good faith in completing the transaction. If the deal closes, it's applied toward the down payment or closing costs. However, if the buyer backs out without a valid reason (as outlined in the contract contingencies), the seller may keep it as compensation for taking the property off the market. Understanding this term helps buyers budget wisely and sellers evaluate offer seriousness.
If I can be of any assistance to you or anyone your know, please know I am NEVER too busy for your referrals. I am here when you need me!
Contact me anytime!
Sean Tavalozzi ~ Maryland Realtor
The Old Father Group
Compass
Cell: 203-233-8445
Email: Sean.Tavalozzi@theoldfathergroup.com
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