You can sell an ADU separately from your main house in California only if your city or county has adopted a local ordinance under AB 1033, and only by converting the property into a condominium so the accessory dwelling unit gets its own recorded title. The mechanics involve a condominium plan, written lender consent, a safety inspection, utility notifications, and forming a two-unit homeowners association before anything can be recorded or sold.1California Legislative Information. AB-1033 Accessory Dwelling Units: Local Ordinances: Separate Sale or Conveyance
First, Check Whether Your City Has Opted In
AB 1033 does not automatically allow separate ADU sales anywhere in California. It gives cities and counties the option to pass a local ordinance permitting condominium conversion of a lot with an ADU. Without that ordinance in place, separate conveyance is still prohibited, no matter what the state law authorizes.2California Legislative Information. California Legislative Information – Assembly Bill 1033
Adoption has been slow. As of early 2026, relatively few California cities have passed the required ordinance. Call your local planning department before you spend anything on the conversion. If your jurisdiction has opted in, ask for the ordinance itself, because cities can add their own objective requirements on top of what state law says.
How the Condominium Conversion Works
The pathway is a condominium conversion, not a lot split. Both the main house and the ADU stay on the same physical lot, but each gets its own legal title. The primary residence and the ADU are each held as a condominium interest, and the two owners share common areas through a homeowners association.
Prepare the Condominium Plan
The owner must create a condominium plan or parcel map that complies with the California Subdivision Map Act. This document defines each unit’s boundaries and the shared areas.1California Legislative Information. AB-1033 Accessory Dwelling Units: Local Ordinances: Separate Sale or Conveyance Expect to hire a licensed surveyor and a real estate attorney. The plan also has to conform to any objective requirements in your local subdivision ordinance, and government filing fees for condominium maps vary by county, so confirm current recorder fees before you budget.
Get Written Lender Consent
If any lien sits on the property, every lienholder must consent in writing before the condominium plan can be recorded. This is where many conversions stall. The lender has absolute discretion. They can refuse, or they can agree with conditions attached, and there is no legal mechanism to force the issue.1California Legislative Information. AB-1033 Accessory Dwelling Units: Local Ordinances: Separate Sale or Conveyance
The consent has to follow a specific format, with the lienholder’s signed statement that they consent in their sole and absolute discretion, along with the property owner’s name, the legal description, and identification of everyone with an interest in the property. The signed consent gets recorded with the county recorder alongside the condominium plan. If you own the property free and clear, skip this step. If you carry a mortgage, a home equity line, or any other lien, start the conversation with your lender early, because many have no established process for this kind of request.
Complete the Safety Inspection
Before the condominium plan is recorded, the ADU must pass a safety inspection confirming it meets applicable building, health, and safety standards for a dwelling.3California Department of Housing and Community Development. Accessory Dwelling Unit Handbook If the ADU was permitted properly and passed its final at construction, this is largely a confirmation. If it was built without permits or has unpermitted modifications, plan on resolving those code issues before the conversion can move forward.
Notify the Utility Providers
The homeowner must notify water, sewer, gas, and electric providers about the condominium creation and the planned separate conveyance. The statute requires notification, not necessarily fully separate service, though separate metering may be needed depending on local rules and practical realities. Two owners sharing a single water line or electrical panel is a recipe for billing disputes, so sorting out utility separation early is worth doing even where the law only requires notice.
Set Up a Two-Unit HOA
Because the conversion creates a condominium, the property becomes a common interest development under the Davis-Stirling Common Interest Development Act. In practice, that means a two-member homeowners association. The HOA manages what the two units share: the yard, driveway, roof if the ADU is attached, fencing, and any other common areas.
Setting up the HOA takes a set of governing documents, including covenants, conditions, and restrictions (CC&Rs) and bylaws, usually drafted by a real estate attorney. The CC&Rs spell out each owner’s maintenance duties, how shared costs are divided, rules about modifying common areas, and how disputes get resolved. Both owners will also pay ongoing HOA assessments and fund reserves for capital expenses like roof replacement.
A two-owner association is awkward by design. Every disagreement is one neighbor against the other, with no third vote to break a tie. Detailed, carefully drafted governing documents are the best protection, and they run with the land, so they bind whoever owns the units next.
Insurance Changes After the Split
Splitting one property into two condominium units reshuffles the insurance. The HOA carries a master policy on the building’s exterior structure, shared systems, and common areas. Each unit owner then carries a separate HO-6 policy (sometimes called walls-in coverage) for their interior, personal belongings, and any improvements they’ve made.
For a two-unit condominium, the master policy typically covers the roof, exterior walls, foundation, and shared plumbing or electrical infrastructure, while the individual HO-6 policies handle flooring, fixtures, appliances, personal property, and interior liability. That two-layer setup is standard for condominiums but unfamiliar to most single-family homeowners, so both the seller and the buyer should price both policies and confirm what each one covers before closing.
What the Conversion Costs
The financial appeal is real. You can sell the ADU and keep your main house, converting the equity in that second unit into cash without moving out. The costs before you get there are not trivial. Budget for a licensed surveyor to prepare the condominium plan, a real estate attorney to draft CC&Rs and handle filings, county recording fees for the map, and any repairs the safety inspection flags. Legal fees alone can run several thousand dollars, and totals climb if the ADU needs physical upgrades or utility separation.
Property tax reassessment is a separate concern. Splitting a single parcel into two condominium units may trigger reassessment of all or part of the property, depending on how the county assessor treats the transaction. Talk to a tax professional or your county assessor before you record anything, because the answer depends on your specific situation.
What the Buyer Is Actually Getting
A buyer under AB 1033 is purchasing a condominium interest, not a standalone lot. They own their unit outright and share the common areas with the primary residence owner. They are bound by the CC&Rs and pay a share of HOA assessments and reserves.
Because ADUs are smaller than typical houses, prices should be lower, which opens an entry point into California ownership that didn’t exist before. The trade-off is the neighbor situation: your only co-member in the HOA is the person on the other side of the wall or across the yard, and the CC&Rs plus that person’s reasonableness will define the experience.
Financing has one useful wrinkle. Fannie Mae waives its full project review for condominium projects of two to four units, which clears one of the bigger obstacles conventional condo buyers usually face. The unit still has to meet standard property eligibility, and the project cannot be flagged as unavailable in Fannie Mae’s Condo Project Manager system, but the streamlined review makes conventional financing more workable than in a larger development.4Fannie Mae. B4-2.1-02, Waiver of Project Review
Owner-Occupancy Is Not Required
California law bars local agencies from imposing owner-occupancy requirements on ADUs. After the conversion, the ADU buyer can rent the unit out rather than live in it, and the main house owner can do the same. Junior ADUs work differently. A JADU that shares sanitation facilities with the primary structure requires owner-occupancy; a JADU with its own bathroom does not.3California Department of Housing and Community Development. Accessory Dwelling Unit Handbook