AB 1033 in the Bay Area: Where Homeowners Can Sell an ADU Separately From the Main House
California homeowners have traditionally been unable to sell an accessory dwelling unit separately from the primary residence. AB 1033 created a pathway for that to change. In participating cities and counties, qualifying homeowners may be able to convert an ADU and primary residence into separate condominium interests—potentially allowing the two homes to be owned and sold separately.
What is AB 1033?
AB 1033 changed California ADU law by allowing local jurisdictions to adopt ordinances permitting the separate sale or conveyance of a primary residence and an ADU as condominiums. The process is not automatic: the city or county must allow it, and the property must satisfy state and local requirements.
Under California law, the condominium creation must comply with the Davis-Stirling Common Interest Development Act and the Subdivision Map Act. The process also includes requirements involving safety inspection, lienholder consent and utility notification, among other conditions.
Why AB 1033 Matters for Bay Area Homeowners
For Bay Area homeowners, the concept could create an entirely different way to think about an ADU. Instead of using the unit only for family, guests or rental income, an eligible property in a participating jurisdiction may have the potential for two separately owned residences. That could create new possibilities for homeowners, buyers and multigenerational households—but whether a particular property qualifies depends on the jurisdiction and the property itself.
Where is AB 1033 Available in the Bay Area?
AB 1033 does not automatically allow separate ADU sales in every California city. Local governments must adopt rules allowing ADU condominium conversions, which means availability varies considerably across the Bay Area—and local regulations continue to evolve.
Some Bay Area jurisdictions have moved forward with ADU condominium conversion programs, while others are considering changes or continue to restrict the separate sale of ADUs. Because these ordinances can change, homeowners should verify the current rules with their city or county before assuming a property is eligible.
San José provides one of the clearest examples of what AB 1033 can make possible. The city created an ADU condominium conversion program, allowing qualifying homeowners to pursue separate condominium ownership of an ADU and the primary residence.
This is particularly important in the Bay Area, where neighboring cities can have very different ADU regulations. A property in one city may have a potential path to separate ownership while a similar property only a few miles away may not.
South San Francisco is also one to watch. Based on information I have received locally from the city manager, the city is currently working on implementation that could allow AB 1033 ADU condominium conversions, with adoption anticipated by the end of 2026. The rules have not yet been finalized, so homeowners should not assume their property currently qualifies. I’ll continue updating this article as the city moves through the process.
What Does It Mean to Sell an ADU Separately?
When a jurisdiction allows AB 1033 conversions, the ADU does not simply become a second house that can immediately be sold on its own. The property generally must go through a condominium conversion process that creates separate ownership interests for the primary residence and the ADU.
Once that process is completed, the two residences may potentially be owned, financed and sold separately. The underlying property becomes a condominium development, with each owner holding their individual unit along with an interest in the common property.
For a Bay Area homeowner sitting on a valuable property with an existing or potential ADU, that distinction can be significant. An ADU that once primarily represented additional living space or rental income could potentially become a separately transferable real estate asset—if the local jurisdiction permits the conversion and the property meets all applicable requirements.
Could AB 1033 Affect Your Property Value?
Potentially—but the impact will depend on the property, the local ordinance and the market. For some homeowners, the ability to create two separately transferable residences could introduce options that did not previously exist.
A homeowner might choose to sell the ADU while retaining the primary residence, sell the primary residence while keeping the ADU, or eventually sell both units separately. It could also create new possibilities for families who want to live near one another while maintaining separate ownership.
From a real estate perspective, however, the value of the opportunity should be evaluated property by property. Lot configuration, access, parking, privacy, utility arrangements, financing, conversion costs and buyer demand can all affect whether an ADU condominium conversion makes financial sense.
Before investing in a conversion, homeowners should understand not only whether their city permits it, but also how the resulting properties might actually compete in their local real estate market.
Thinking About an ADU or AB 1033 Conversion?
If you own a Bay Area property with an ADU—or you’re considering building one—I can help you look at the decision through a real estate lens, including neighborhood values, comparable sales and how different property configurations may affect future marketability.
AB 1033 rules are evolving throughout the Bay Area, and I’ll continue updating this resource as additional cities adopt local ordinances.
This article is provided for general informational purposes only and is not legal, tax or land-use advice. AB 1033 implementation varies by jurisdiction and individual property circumstances. Property owners should consult the appropriate local agency and qualified legal, tax and other professionals regarding their specific property.