New California law would allow separate sales of ADUs — if cities and counties opt in

California's AB 1033 has created a new pathway for homeowners to sell accessory dwelling units separately from their primary residences, marking a significant departure from previous state law that prohibited such transactions.

The legislation allows cities and counties to adopt local ordinances permitting ADUs to be sold as individual condominium units, though participation remains optional for local governments.

The new law introduces substantial complexity for property owners considering separate ADU sales.

Requirements include creating subdivision maps, establishing homeowners associations, securing lender approval for financing, addressing utility considerations, and meeting extensive disclosure obligations.

These steps represent a fundamental shift in how ADUs can be treated in the real estate market, potentially opening new opportunities for homeownership while adding layers of regulatory compliance.

San José became California's first city to implement AB 1033 in July 2024 and recorded the state's inaugural separate ADU sale in August 2025, demonstrating the law's practical application.

However, the opt-in structure means availability varies significantly across California jurisdictions.

Some municipalities have moved quickly to adopt enabling ordinances, while others remain hesitant or inactive.

Property owners and real estate professionals must verify local adoption status before pursuing separate ADU sales, as the state law provides framework rather than universal implementation.

The legislation reflects California's broader efforts to address housing affordability by maximizing existing residential properties' potential.