AB 1033: Selling ADUs as Condominiums — A Compliance Guide for California Cities

What AB 1033 Does

AB 1033 (Ting, Chapter 479, Statutes of 2023) amends Civil Code and Government Code provisions to allow an ADU to be sold separately from the primary dwelling as a condominium — creating an independent fee-simple ownership interest in the ADU. Before AB 1033, California law did not permit a separate sale of an ADU on the same lot as the primary dwelling; ADUs could be rented but not independently conveyed as a real property interest.

AB 1033 does not automatically apply statewide. It is a local opt-in program: a city or county must adopt an ordinance affirmatively opting in to the program before property owners in that jurisdiction can use it. Cities that do not adopt an opt-in ordinance are not required to do anything under AB 1033 — but their residents cannot take advantage of the separate-sale mechanism.

The rationale is to expand wealth-building opportunities for existing homeowners, particularly lower- and middle-income owners who have built an ADU and could benefit from selling it to generate cash, while the new owner gains access to homeownership at a price point below a traditional single-family home.

Who This Matters To In City Hall

Legislation Overview

AB 1033 (Ting) | Chapter 479, Statutes of 2023 | Signed: October 11, 2023 | Effective: January 1, 2024 | Amends: Civil Code and Government Code (ADU statutes, GC §§ 65852.2, 65852.22)

The Local Opt-In Mechanism

To participate in AB 1033's separate-sale program, a city or county must adopt a local ordinance that explicitly opts in. The ordinance must be consistent with the statutory requirements — it cannot impose conditions more restrictive than the statute allows, but it can include administrative procedures for processing applications.

Key requirements for the opt-in ordinance:

• The ordinance must expressly authorize the separate sale of ADUs as condominiums within the jurisdiction.
• The ordinance may (but is not required to) establish local procedural requirements for applications, so long as they do not exceed state law constraints.
• The ordinance may include affordability conditions or requirements as a condition of the separate sale — this is an area where cities have discretion to shape the program to local needs, but any affordability requirement must be consistent with the Density Bonus Law and must not effectively nullify the program.

Eligibility Requirements for a Separate ADU Sale

Not every ADU qualifies for separate condominium sale under AB 1033. The following criteria apply:

• City must have opted in: The jurisdiction where the property is located must have adopted an AB 1033 opt-in ordinance. No opt-in ordinance = no separate sale.
• Permitted ADU: The ADU must have been constructed pursuant to a valid building permit — unpermitted ADUs and structures that did not receive final inspection are ineligible.
• Condominium plan required: The property owner must record a condominium plan that legally identifies the ADU as a separate unit within a common interest development. This follows the standard condominium map process under the Davis-Stirling Common Interest Development Act (Civil Code § 4000 et seq.) and the Subdivision Map Act.
• HOA consent (if applicable): If the property is already within a common interest development (i.e., the primary dwelling is in an HOA), the CC&Rs may restrict further subdivision or condominium conversion. AB 1033 addresses this by preempting CC&R provisions that would prohibit or unreasonably restrict an ADU condominium sale, but HOA consent and CC&R amendment processes may still need to be followed.

HOA and CC&R Rules

This is the most complex operational area of AB 1033. When the primary dwelling is within an existing homeowners association (HOA), the ADU condominium sale creates a new unit in the common interest development — which implicates CC&Rs, HOA governance, and member assessments.

• CC&R preemption: AB 1033 preempts CC&R provisions that would categorically prohibit an ADU condominium sale. An HOA may not use its CC&Rs as an absolute bar to a qualifying sale. However, an HOA may impose reasonable conditions related to the shared interests of the development — such as proportionate assessment obligations, shared utility arrangements, and maintenance responsibilities.
• CC&R amendment process: Even with preemption, the condominium plan creation requires recording a condominium plan, which may require HOA approval or a CC&R amendment to reflect the new unit. Work through the Davis-Stirling Act amendment process — consult with HOA counsel early.
• Assessment obligations: Once the ADU is sold as a separate condominium, the new owner becomes a member of the HOA and is subject to HOA assessments, rules, and governance on par with other members. Prospective buyers should understand the full scope of HOA obligations before purchasing an AB 1033 condominium ADU.
• Single-family zone considerations: In single-family zones, many properties are not within an HOA. For these properties, creating a condominium from a primary residence and ADU effectively creates a new two-unit common interest development, potentially triggering Davis-Stirling governance requirements for the first time. Legal counsel should advise on whether the creation of a two-unit CID triggers Davis-Stirling and what governance obligations apply.

Subdivision Process and Condominium Plan

Separate ADU sale under AB 1033 requires a condominium plan, which is processed under the Subdivision Map Act. AB 1033 modifies the Subdivision Map Act to allow a lot with a primary dwelling and one ADU to be treated as a condominium plan without requiring a standard parcel map subdivision that would otherwise create two separate lots.

The process:

1. Property owner applies for a condominium plan with the city's planning department (where the city has opted in).
2. The application must demonstrate that the ADU was constructed with a valid building permit and final inspection.
3. The city reviews for compliance with the opt-in ordinance and applicable objective standards.
4. If approved, the condominium plan is recorded with the county recorder. The lot remains a single lot — the primary dwelling and ADU are now legally distinct condominium units within a common interest development.
5. The ADU may then be sold independently. Title is conveyed to the ADU buyer; the primary dwelling owner retains title to the primary unit and the shared common area.

Interaction with Existing ADU Law

AB 1033 operates on top of — and does not replace — existing ADU law under Government Code §§ 65852.2 and 65852.22. Several interaction issues deserve attention:

• Owner-occupancy requirements: California ADU law generally prohibits local agencies from requiring owner-occupancy of the ADU or primary dwelling as a condition of ADU permit approval (with limited exceptions). Under AB 1033, once the ADU is separately sold, neither the seller nor the buyer is required to live on the property — the owner-occupancy prohibition that applied during the ADU approval process does not re-emerge as a condition of the condominium sale.
• Affordability deed restrictions: If the ADU was originally constructed with affordability restrictions (e.g., as part of a density bonus project or an affordability program), those restrictions remain in place after the AB 1033 sale and bind the new owner. The condominium plan does not extinguish existing deed restrictions.
• Original construction approvals: The ADU, once sold as a condominium, remains subject to the original building permit conditions, zoning approvals, and objective standards under which it was constructed. The new ADU owner cannot alter the ADU in ways that would violate those conditions without obtaining new approvals consistent with current law.
• Future ADU additions: After the primary dwelling and ADU are sold to separate owners under AB 1033, the ability to add additional ADUs to the lot becomes legally complex. Government Code § 65852.2's ADU entitlement rights generally attach to the "property owner" — with two separate owners after an AB 1033 sale, the question of who may apply for additional ADUs requires careful legal analysis. Cities that have opted in should develop a policy position on this question before the first application arrives.

JADU Applicability

AB 1033's separate-sale mechanism applies to ADUs (accessory dwelling units) as defined in Government Code § 65852.2. It does not apply directly to Junior ADUs (JADUs) as defined in Government Code § 65852.22. JADUs are contained within the walls of the primary dwelling, do not have a separate entrance to the exterior (JADUs may have an interior entrance to the primary unit), and are subject to different size and configuration rules. The condominium plan mechanism under AB 1033 is designed for ADUs — structures with independent utility connections, separate entrances, and full dwelling unit characteristics. JADUs, as embedded units without separate exterior access, are generally not suitable for the condominium separation contemplated by AB 1033.

Cities and property owners should consult with legal counsel before attempting to apply the AB 1033 mechanism to a JADU. The statutory text focuses on ADUs, and applying it to a JADU would require legal analysis of whether a JADU meets the minimum unit configuration requirements for a condominium under the Davis-Stirling Common Interest Development Act (Civil Code § 4100 et seq., including the condominium plan requirements under Civil Code § 4285).

Compliance Risk Assessment

Action Checklist

For Cities Considering Opt-In

• City Council: Receive a policy briefing from City Attorney on the opt-in mechanism, HOA issues, and local affordability discretion before scheduling an ordinance vote.
• City Attorney: Draft an opt-in ordinance that (a) expressly adopts the AB 1033 program, (b) establishes a clear application and processing procedure, (c) addresses the HOA consent and CC&R amendment requirements, and (d) specifies any local affordability conditions within the statutory constraints.
• Planning Department: Develop an intake checklist for AB 1033 applications covering: building permit history for the ADU, final inspection documentation, condominium plan draft requirements, and HOA status of the property.
• Building Department: Establish a procedure for verifying that an ADU has a valid permit and final inspection before an AB 1033 condominium plan is approved.

For Cities That Have Not Opted In

• No action is required. Ensure front counter staff understand that AB 1033 is not operative in your jurisdiction if you have not adopted an opt-in ordinance, so property owners inquiring about ADU condo sales receive accurate information.

Frequently Asked Questions

Does AB 1033 require cities to participate?

No. AB 1033 is a voluntary opt-in program. Cities that do not adopt an opt-in ordinance are not required to process AB 1033 condominium plan applications and their property owners cannot use the mechanism.

Can a city require affordability conditions on AB 1033 ADU sales?

Yes, within limits. Cities may impose affordability conditions as part of their opt-in ordinance — for example, requiring that ADU condominiums be sold at prices affordable to moderate-income buyers. However, any affordability condition must be consistent with state law and must not effectively nullify the program by making it economically infeasible for property owners to use.

What happens to the ADU's rental history if it is sold under AB 1033?

The ADU's prior rental history — including any existing tenancies — does not automatically transfer with the condominium sale. However, if there is an active tenant at the time of sale, the sale does not extinguish the tenant's rights under any applicable rent control ordinance or lease agreement. The new ADU owner takes subject to any existing tenancy.

Is there a minimum lot size for AB 1033?

AB 1033 does not impose a separate minimum lot size beyond what is required for the original ADU approval under Government Code § 65852.2. If a lot was eligible for an ADU under existing ADU law, the ADU on that lot may be eligible for AB 1033 separate sale (in a city that has opted in), subject to the permit and condominium plan requirements.

AB 1033 creates a genuine new homeownership pathway — but it requires careful ordinance drafting, HOA analysis, and operational procedures that most cities haven't yet developed. Legislaide helps cities draft AB 1033 opt-in ordinances and application checklists that comply with the statute while addressing the local legal and policy considerations specific to each jurisdiction.

Published April 6, 2026 by Legal Team at Legislaide.