New Law Allows California Homeowners to sell their Accessory Dwellings

The new AB 1033 law passed in California allows property owners to sell their Accessory Dwelling Units (ADUs) separately from the primary residence, following the same rules that apply to condominiums. Homeowners may also choose to move into their ADUs and sell their main home. This new legislation marks a significant change to the traditionally stringent zoning laws and aims to address the state’s pressing housing needs.

The primary intent of the ADU Assembly Bill 1033 is to address California’s housing crisis by providing more affordable and accessible housing options. The legalization of ADUs not only increases the property value but also opens up opportunities for rental income.

AB 1033 introduces two main provisions. First, it allows ADUs to be sold separately from the main residence, creating greater housing density and more affordable homeownership options. Second, it supports a simple partition in-kind of single-family homes, which reduces the need for lengthy and costly legal proceedings.

The new law will only take effect in cities that “opt-in” to the law governing ADUs under the same rules as condos. ADUs will have different property taxes from the homes they’re built beside, and each property will be required to form a homeowners association to assess costs for maintenance of shared spaces between the home and ADUs.

Another requirement is having separate utility meters for gas, electricity and water services.

This new legislation enables homeowners to capitalize on their existing equity by selling ADUs built on their properties. It is expected to help people looking to buy starter homes amid California’s housing shortage and high prices while lightening the burden of homeowners, especially elderly ones who may have paid off their homes but have relatively little income.

The new law is set to take effect on January 1, 2024.

If you have any questions, feel free to reach out! We can provide resources for contractors that specialize in ADU construction.

Pete Sabine & Leslie Whitney

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