Overview
Prior to AB 1033, ADUs could only be rented — they could not be sold separately from the primary residence. This meant ADU developers were limited to rental income as their return mechanism, or had to sell the entire property (primary unit + ADU) as a package. AB 1033 changes this by allowing participating cities to permit ADUs to be sold as independent condominiums.
Key Provisions
- Opt-in by city — municipalities must adopt an ordinance to enable AB 1033 condominium sales
- The ADU and primary unit are sold as separate condominiums with separate titles
- Both units are subject to standard condominium CC&Rs and HOA requirements
- Existing ADU development and permitting rules still apply — AB 1033 only changes the ownership structure
SKDM's Strategy
AB 1033 creates a compelling new development model: build a primary residence and an ADU, sell them as separate condominiums, and capture value from both units independently. In high-value markets like the San Gabriel Valley and Los Angeles, this can meaningfully improve project returns by enabling a for-sale exit on both units rather than treating the ADU as purely a rental income play.
Contact us to discuss how AB 1033 may apply to your specific parcel or development program.