Wondering about AB 1033 in California? The landscape of accessory dwelling units (ADUs) in California is continually evolving. California Assembly Bill 1033 (AB1033) is a significant piece of legislation passed in 2023, which removed the ban on selling ADUs. This blog aims focuses on implications for selling ADUs separately from the main home. We break down what AB 1033 means, which cities are considering the change, … plus what the process, timeline, and costs look like in practice.
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ToggleCan you sell an ADU separately from the main home in California?
AB 1033 removed the state-level restriction on selling ADUs, meaning that individual cities and counties can now choose to allow homeowners to sell ADUs as standalone properties. It’s important to note that while AB 1033 opens the door for separate sales, it doesn’t automatically permit them, unless the property is owned by a qualified non-profit organization. This decision is now in the hands of local governments, meaning that each city or county must proactively opt into AB 1033 for this change to take effect.
How long will it take to sell the ADU separately?
In practice, ADU condo conversion is often a 6+ month process involving surveying, civil engineering, legal drafting, potential public hearings, and creation of a homeowners association. If any elements are shared between the primary home and ADU such as walls, utilities, driveway access, or courtyard space, the project may require review through the California Department of Real Estate (DRE), which significantly increases cost and complexity.
What Does an ADU Condo Conversion Typically Cost?
When surveying, mapping, legal drafting, DRE review, and HOA formation are included alongside city fees, total soft costs for condo conversion can approach or exceed $50,000 to $75,000 before accounting for lender conditions or utility upgrades.
While AB 1033 creates a legal path to sell an ADU separately, the process often resembles a small subdivision or condominium development rather than a simple administrative filing. For this reason, condo conversion tends to make the most financial sense when resale values justify the added expense or when ownership clarity for family members is a primary goal.
For a typical two-unit property in San Diego, homeowners should expect the following categories of cost:
City Condo Mapping Fees
The City of San Diego charges approximately $20,000 in fees for condominium map processing (from City Info Bulletin 503). This is separate from private consultant costs and covers City review and processing of the conversion.
Surveying and Mapping Work
Private survey and engineering costs often range from $20,000 to $25,000, which may include:
- Boundary and field survey work
- Setting property corners
- Office mapping and drafting
- Preparation of the condominium plan
- Multiple rounds of revisions with senior review
Source: Walsh Engineering
Legal Documentation and HOA Formation
Legal drafting and entity formation commonly range from $7,000 to $15,000+, including:
- CC&Rs
- Condominium plan drafting
- HOA formation documents and bylaws
- Association entity creation
Source: Austin Legal Group
Department of Real Estate (DRE) Review, if Triggered
If any improvements are shared between units, such as driveway access, utilities, walls, or courtyard areas, the project may require DRE review and issuance of a public report. DRE filing fees alone may be approximately $3,000, with additional legal coordination and document preparation required.
Can you sell an ADU in San Diego?
Yes, effective August 22, 2025, the City of San Diego allows ADUs to be sold separately from the primary home via condominium conversion. The full text of the ordinance starts on page 77 of O-21989.
This change creates a formal path for legal ADU sales, which could be an exciting opportunity for both homeowners and buyers. However, it’s not a simple or automatic process. Lender approval, subdivision mapping, and compliance with legal regulations are all required, making this a niche path for now.
Also, if the property is already within an existing HOA, creating another HOA for separate sale of the ADU may require consent from the original association, often through a vote of existing members… in other words, a potential dealbreaker.
What is allowed in San Diego?
- New or existing ADUs qualify. Even older legal ADUs may be sold, not just newly created ADUs.
- Lienholder consent is required. Every lender on the property must provide written approval for the subdivision and sale. Lenders can add conditions or deny consent entirely.
- Parcels must be mapped to City standards. The property must already have an official subdivision map and monuments on file with the City Engineer (or go through that process first). Read more about surveys.
- Primary residence buyer rule. When an ADU condo is listed for sale, it must first be offered to buyers who will occupy it as their primary residence. The seller must market it for at least 30 days on two public real estate websites with such a disclosure.
Steps to Convert an ADU into a Condominium in San Diego
To sell an ADU separately, the property must go through a legal condo conversion process, including:
Subdivision Mapping.
To sell an ADU as a separate legal unit, the property must go through a subdivision process under the California Subdivision Map Act. This involves preparing a tentative map or map waiver that defines the separate unit boundaries and submitting it for approval by the City. The property must also have been previously monumented and mapped to the City Engineer’s satisfaction, or that process must be completed. All of this is designed to avoid fraud, protect public interests, and ensure compatibility with surrounding areas. (See Subdivision Map Act (Division 2 (commencing with California Government Code section 66410)).
Lienholder Consent.
If there is a mortgage on the property, the lender must provide written consent to the subdivision and sale. This includes both the original loan holder and any secondary lenders. In practice, this may be one of the most challenging steps, since lenders can refuse, or impose additional terms to approve the split. Their signed consent must be recorded with the condominium plan.
Condo Compliance & Legal Documentation.
The project must follow California’s Davis-Stirling Common Interest Development Act, which governs the creation of condominiums and other common interest developments. Homeowners will need to prepare and record a formal Condominium Plan, Covenants, Conditions & Restrictions (CC&Rs) for the property, possibly HOA bylaws or tenancy-in-common (TIC) agreements, depending on the structure. These documents require legal drafting and must be recorded with the County Recorder. (Condominium Conversion Regulations in Chapter 14, Article 4, Division 5). If the ADU is tenant-occupied, the homeowner may be required to provide written notice to the tenant and offer reasonable relocation assistance, depending on the circumstances.
If any improvements or infrastructure are shared between units, including a shared driveway, utilities, walls, or courtyard, the project may be classified as a full condominium project requiring review by the California Department of Real Estate.
This can require preparation and submission of CC&Rs, HOA formation documents and bylaws, DRE application and public report, and then ongoing HOA entity creation and management.
Typical costs may include:
- $3,000 DRE filing fees
- $5,000 or more for CC&R preparation
- Approximately $1,500 to form the HOA entity
- Legal or paralegal coordination for document assembly and submission
- Ongoing HOA maintenance and compliance costs
DRE review can add significant time and expense, and in many cases is what makes condo conversion economically challenging for a single ADU property.
Utility Coordination & Access.
Each unit must have clearly defined and recorded access to utilities such as water, sewer, gas, and electricity. In some cases, this may mean separate metering or service lines, or formal shared access agreements. Homeowners will need to notify utility providers of the subdivision and work with them to confirm or establish separate service. Over time we will learn what requirements this may entail – read more about ADU utilities.
Deed Restriction Eligibility Check.
ADUs created through the Bonus ADU Program or other affordability incentives are typically subject to recorded deed restrictions that limit or prohibit sale. Units still under those restrictions cannot be sold separately until the covenant period ends. This includes ADUs funded by the San Diego Housing Commission or those restricted to low/moderate-income households.
Sales Rules.
When an ADU condo is listed for sale, it must first be offered to buyers who will occupy it as their primary residence. The seller must market it for at least 30 days on two public real estate websites with such a disclosure.
Tenant Protections.
If your ADU is tenant-occupied when you apply for condo conversion, California’s Condominium Conversion Regulations apply. In San Diego, that means tenants must receive formal written notice well ahead of the conversion and sale process. Tenants may have a “first right of refusal” to purchase the unit once it’s condo-mapped. Owners cannot use condo conversion as a way to sidestep tenant protections or rent control rules.
Key Considerations for Selling an ADU
Before pursuing a condo conversion and sale, homeowners should assess:
- Feasibility: Does your ADU meet zoning, code, and site requirements for legal subdivision?
- Lender Approval: Have you reviewed your existing mortgage and obtained written lender consent?
- Utility Separation: Are utilities separately metered or can they be? Shared infrastructure could be a barrier.
- Legal Documentation: You’ll need to draft and record formal condo documents, including CC&Rs and a condo plan, in compliance with the Davis-Stirling Act.
- Budget Reality: As listed above, the total cost at this time is likely $30-50K to complete the condo mapping, so it’s important to consider this all in cost upfront.
How should I start if I want to sell my ADU?
- Confirm your ADU is eligible by reviewing the above requirements and the actual ordinance O-21989.
- Ask your lender about subdivision consent.
- Consult a land-use attorney or surveyor about condo mapping.
- Then, talk to a real estate professional about value and market demand.
While we don’t handle condo conversions ourselves, we can point you to the right professionals and help assess whether this path makes sense for your ADU.
What is AB 1033?
AB1033 is a California state law passed in October 2023 that aims to promote affordable homeownership by allowing ADUs to undergo condominium conversion. This means that, subject to local government passing an ordinance to allow it, ADUs could potentially be sold as individual units, much like condos. The bill’s primary goal is to increase the availability of affordable housing options and to provide homeowners with more flexibility in managing their properties.
A significant aspect of AB 1033 is the provision that allows ADUs to be sold or conveyed separately from the primary residence under specific conditions. ADUs can be sold separately when developed by a qualified nonprofit corporation, if they adhere to certain affordability and occupancy restrictions. Importantly, the bill does not limit the ability of ADUs to be sold or conveyed separately as condominiums, subject to local ordinances that permit this sale by homeowners (not just non-profits). This provision represents a substantial shift from the state’s previous stance and opens up new possibilities for homeowners and potential buyers alike, particularly in the realm of affordable housing.
LIST: AB 1033 Participating Cities
Adopted
Below are the cities we are aware of that have opted into AB1033:
- San Jose: Opted into AB 1033 in June 2024, with the bill taking effect July 18th, 2024 (Zoning Ordinance Update PP23-007). As of August 2025, the city passed the first ADU condo conversions under the new law.
- San Diego: Allows sale of ADUs as condominiums as of Aug 22, 2025 (Zoning Ordinance Update O-21989, page 77).
- Santa Cruz: ADUs can be mapped as condominiums, enabling them to be sold separately from the other unit(s) on the property (City of Santa Cruz – ADUs).
- Santa Monica: Opted into AB 1033 in early 2025 allowing ADU or ADUs to be separately sold or conveyed as a condominium under specific conditions outlined in their city code (9.31.026 Accessory Dwelling Unit Condominiums).
- San Diego County: On March 4, 2026 the County Board of Supervisor voted to adopt AB1033. Implementation will go into effect on April 4, 2026. Additional parameters are to be considered to promote first-time home buyers such as owner occupancy requirements and first right of refusal for existing tenants which will be determined within 120 days (July 2nd, 2026). See more details on their ADU Zoning Ordinance Amendment page.
In Progress
- The City of Berkeley addressed implementing AB1033 in their city council meeting on May 7, 2025 with plans to continue exploring policy options and draft amendments before moving forward with required steps for final adoption. The cities of Napa & San Francisco have also expressed interest in adopting AB 1033 in the future.
Why consider selling an ADU from the main property with AB 1033 California?
Homeowners may have the option to convert their ADUs into condominiums, providing a unique opportunity to sell these units separately. This flexibility can be particularly appealing in high-demand housing markets.
Family Goals
Beyond resale value, condo conversion may also serve family planning goals. For example, when adult children move onto the property, a separately condo-mapped ADU can create a formal ownership path. Instead of informal co-living or rental arrangements, each household can hold title to its own unit while sharing common areas through an association structure. This can clarify financial responsibility, estate planning, and long-term equity participation.
Investment Goals
Developers might also see this as an opportunity to design ADU projects from the outset with separate sale or future ownership transfer in mind.
The ability to sell ADUs separately could impact property valuations, potentially increasing the overall value of properties with ADUs. At the same time, it introduces new considerations around affordability, shared infrastructure, HOA governance, and tax allocation.
You may also want to learn about SB9, which enables a lot split and development of additional units.
Process of selling an ADU: What it could look like with condo mapping after AB 1033
Condo mapping, also known as condominium conversion, is a legal and regulatory process that transforms a single property into multiple, individually owned units, such as in the case of ADUs. This process is crucial for homeowners who wish to sell their ADUs separately under AB1033 in the future, should their local government allow it.
Here’s a breakdown of how condo mapping typically works:
Preliminary Assessment
Before initiating the condo mapping process, a preliminary assessment is necessary to determine if the property meets the basic requirements for conversion. This includes evaluating zoning regulations, property size, existing structures, and local ordinances.
Application and Documentation
Homeowners must submit a condo conversion application to the local planning or development department. This application includes detailed plans of the property, showing the division of units and common areas.
Legal documents such as a declaration of covenants, conditions, and restrictions (CC&Rs) are prepared. These documents govern the rights and responsibilities of the condo association and unit owners.
Compliance with Local Regulations
The property must comply with local building codes and safety standards. This may involve inspections and upgrades to ensure that each unit is safe and habitable as a standalone property.
Public Report and Final Map
A public report is prepared, which includes detailed information about the property, the units, and the association. This report is essential for prospective buyers to understand what they are purchasing.
A final map, also known as a condominium plan, is created. This map legally defines the divided units and common areas. It must be recorded with the county recorder’s office.
Approval Process
The local planning department reviews the application, documentation, and final map. This process may involve public hearings and revisions to the plan.
Once approved, the property is officially recognized as a condominium complex, and individual units can be sold separately.
Establishment of a Homeowners Association (HOA)
An HOA is typically established to manage the common areas and enforce the CC&Rs. The HOA is responsible for maintenance, repairs, and managing community rules. Read more about ADUs and HOAs.
Even on a two-unit property, an HOA or similar governing structure is typically required. This creates ongoing administrative obligations including:
- Annual filings
- Insurance coordination
- Shared maintenance agreements
- Potential assessments
Property tax allocation between the units may not be strictly pro rata based on unit size. Portions of the land or common areas may be assessed differently, and HOA levies may apply depending on how shared spaces are structured.
Sales and Marketing
After the conversion, units can be marketed and sold to individual buyers. The sales process is similar to selling any other type of real estate, but with the added complexity of the condominium structure.
For more helpful info, see sample CCNRs and instructions on how to sell off an ADU.
When is ADU condo conversion more straightforward?
The process tends to be more predictable when:
- No infrastructure is shared between units
- Utilities are fully separated
- No affordability deed restrictions exist
- The property is not within an existing HOA
- Lenders are cooperative
Even then, survey and mapping costs still apply.
AB1033 in California is a Developing Area: Stay Informed
AB 1033 represents a significant shift in the ADU market in California. As this is a rapidly developing area, staying informed is crucial. At SnapADU, we are committed to keeping you updated on the latest developments. Learn how they might affect your ADU plans in Greater San Diego and beyond. Join our mailing list for updates on topics such as this.
The introduction of assembly bill 1033 marks a potential turning point in the ADU market in California. While it opens up new possibilities for homeownership and property management, the actual implementation of separate ADU sales will depend on local government decisions. For those in Greater San Diego and other parts of California, staying informed and engaged with local housing policies will be key to navigating this new landscape. As always, we are here as an experienced ADU builder to provide guidance and support as this exciting development unfolds.
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