It's usually a part of a house, but it has a completely separate entrance, as well as a kitchen and everything - it's basically an apartment attached to a house
A mother-in-law apartment is a small apartment accessory to a primary residence. Alternative names include "granny flat", "granny suite""in-law suite", and "accessory apartment", the first being used primarily in Australia and Britain, where it is the most familiar of these terms, but also in parts of the United States. Such apartments are frequently used to accommodate an elderly relative who is not capable of living on their own, but is not ready for a nursing home environment or other similar facility.
The apartment may or may not have a communicating door to the main house, but virtually always has a separate entrance and is usually not part of the original design. Many are located above the garage of the main house or as a separate building in the rear yard.
I think the term stands for 'Mother in law' apartment. I guess the idea is that they're for family that might need to live with you but you don't want them to actually live inside your house.
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