AB 1033 (Ting, 2023) gave California cities the option to allow an ADU to be sold separately from the primary residence, as a condominium. It is opt-in: a city has to pass an ordinance. Where it applies, it changes an ADU from a rental add-on into a sellable home.
How a separate sale works
- The city adopts an AB 1033 ordinance allowing ADU condominiums.
- The owner records a condominium map and a declaration (CC&Rs) covering the lot, which creates a two-unit (or more) common interest development.
- Utilities and any lender with a lien must be notified; existing lenders generally have to consent.
- Each unit gets its own assessor parcel number and can be sold and financed independently.
Which cities have opted in
Adoption has been uneven. San Jose was the first large city to adopt an ADU condo ordinance, and a number of Bay Area and Southern California jurisdictions have followed or are drafting one. Los Angeles has not adopted a general AB 1033 ordinance as of this writing. Check with Parcy or your planning department for the current status of your city; this is a fast-moving area and we update the law index as cities opt in.
Why it changes the math
A rented ADU is valued through the income approach or as a bonus to the main house's comps. A sellable ADU is valued like a small home. In a market where a 900 square foot detached home sells for $650,000 and costs $350,000 to build, AB 1033 turns a 7% cash-on-cash rental into a $300,000 profit on sale with no lot split. It also lets a homeowner fund the build by selling the ADU and keep the main house free and clear.
Watch-outs
- HOA obligations: a two-unit condo still needs a declaration, shared maintenance rules, and insurance.
- Lender consent: most existing mortgages require it before a condo map records.
- Property tax: each unit is reassessed on sale.
- Not available everywhere: without a local ordinance, the ADU stays attached to the main parcel.
Parcy's valuation shows both outcomes, rental and sale, where a city allows separate sale. Ask us whether your city has adopted AB 1033.
Frequently asked questions
Can I sell my ADU separately from my house?
Only if your city has adopted an AB 1033 ordinance allowing ADU condominiums. It is optional for cities.
Does AB 1033 require a lot split?
No. The ADU becomes a condominium unit on the same lot, with its own assessor parcel number.
Informational only. Not legal, architectural, or investment advice. Confirm current rules with your local planning department.