Accessory dwelling units, or ADUs, have become one of Los Angeles’s most popular ways to add housing, generate rental income, and create multi-generational living space on a single lot.
With the passage of AB 1033, many homeowners are now asking a new question: Can I actually sell my ADU as its own condominium in Los Angeles?
The short answer is that AB 1033 creates a path to do exactly that in cities that adopt local ordinances, and Los Angeles is moving into that territory.
The longer answer is that the process is technical and highly regulated, so it’s important to understand how the law works before you design, build, or convert an ADU with a condo sale in mind.
Understanding ADUs: What They Are and Why They Are Popular in Los Angeles
Accessory dwelling units are secondary residential units built on the same lot as a primary home. In Los Angeles, they are often:
- Detached “backyard homes” behind a single family residence
- Attached additions created by converting garages or portions of the main house
- Above-garage apartments or over-the-garage suites
ADUs have surged in popularity in Los Angeles for several reasons:
- Housing shortage relief. ADUs add gentle density in existing neighborhoods without the scale of large apartment projects.
- Income potential. Long term rental income, mid term rentals, or housing for family members who might otherwise be priced out.
- Property value. A well designed, code compliant ADU can increase the overall value and marketability of your property.
Until recently, state law generally treated the main house and ADU as a single ownership interest that could not be sold separately, outside of narrow nonprofit programs. AB 1033 changes that framework by allowing local governments to create a path for separate sale as condominiums.
What Is AB 1033? Breaking Down the Legislation
AB 1033 is a California law that updates state ADU rules to allow cities and counties to adopt local ordinances permitting the separate sale or conveyance of ADUs and primary homes as condo units on the same lot.
A few key points about AB 1033:
- It became effective in 2024 as part of a broader package of ADU reforms.
- It does not automatically allow separate sales in every city. Instead, it gives local governments permission to “opt in” by adopting their own implementing ordinances.
- When a city opts in, a homeowner can apply to map their property as a condominium so that the primary dwelling and ADU can be sold as separate legal units.
In practice, AB 1033 is about more than just “selling the backyard house.” It shifts the property into a common interest development structure, which brings with it shared ownership of certain elements of the site, shared responsibilities, and a different regulatory environment for permits, disclosures, and financing.
For Los Angeles homeowners, the big picture is this: AB 1033 creates a legal framework that the City can use to let you sell an ADU as a condo, but the details live in local zoning and subdivision rules.
How Does AB 1033 Change the Rules for Selling ADUs as Condos?
Before AB 1033, separate sale of an ADU was largely off the table for typical Los Angeles homeowners. The lot and everything on it were treated as a single parcel with a single ownership interest. You could rent the ADU, but you could not carve it off and sell it to someone else as an independent residence.
With AB 1033 and a local implementing ordinance in place, the following becomes possible:
- Split title ownership. The primary home and the ADU can each receive their own condo unit number and legal description.
- Separate deeds. You can have one deed that conveys the main house and another that conveys the ADU, similar to a two unit condo building.
- Independent buyers and financing. The main home and ADU can be sold to different buyers who obtain their own mortgages, subject to lender requirements for small condo projects.
However, there are important boundaries to keep in mind:
- You are not subdividing the land into two separate fee simple parcels. You are creating a condominium map where each unit has exclusive rights to a dwelling and certain limited common areas, while everyone shares the underlying land and common elements.
- State and local rules still control maximum density, setbacks, height, parking, and other development standards. You cannot use AB 1033 to add more units than zoning allows.
- The city will require that the ADU and primary dwelling meet all building, fire, and life safety codes before it will sign off on a condo map.
From a planning perspective, it is smart to think about condo potential at the design stage. The way you locate utilities, parking, private open space, and access paths can either support or complicate a future condo conversion.
The Process: Steps to Convert and Sell Your ADU as a Condominium in Los Angeles
If Los Angeles has adopted its AB 1033 ordinance and you want to seriously pursue a condo sale of your ADU, you will follow a process that generally looks like this. Specific steps and sequencing can vary, so always confirm with the City and your professional team.
1. Confirm Local Eligibility
Start by verifying:
- That Los Angeles has opted in to AB 1033 and is accepting applications for ADU condo conversions.
- That your property meets basic criteria such as zoning designation, number of units on the lot, and compliance with state and local ADU standards.
This is a good time to consult with a real estate attorney or land use specialist who is familiar with the City’s implementing ordinance.
2. Ensure the ADU is Fully Permitted and Code Compliant
The City will not approve a condo map for an illegal or partially permitted structure. Before you move forward, make sure:
- The ADU was built under valid permits and finaled by the building department.
- Any older work has been legalized or brought up to current code.
- Fire separation, egress, and life safety features meet current standards for separate units.
If you are still in the planning phase, design your ADU to meet or exceed code, with condo conversion as a potential future outcome.
3. Prepare the Condo Map and Legal Documents
Condo conversion involves a set of technical steps, often handled by a land surveyor, civil engineer, attorney, and title company:
- Condominium map. A licensed surveyor prepares a map that delineates the boundaries of each unit, limited common areas, and common areas.
- CC&Rs and HOA documents. You will need covenants, conditions, and restrictions that establish a homeowners association to manage shared elements such as the roof, exterior, driveway, and utilities.
- Utility separation and easements. In many cases, the City and utility providers will expect separate metering or well documented cost-sharing arrangements, along with easements for access and maintenance.
- Disclosure and DRE requirements. Depending on the number of units and specific facts, you may need approvals or filings with the California Department of Real Estate and additional disclosure documents for buyers.
4. City Review, Approval, and Recordation
Once your professional team has assembled the package:
- Submit the condo map and related documents to the City for review.
- Address any comments related to zoning compliance, access, parking, fire safety, and shared maintenance obligations.
- After City approval, record the condo map and CC&Rs with the county recorder.
Only after this recordation step can you truly market and sell the ADU as its own condominium residence with a separate legal description.
5. Market and Close the Sale
Finally, work with a real estate agent and lender who understand small condo projects and AB 1033 property structures. They can help:
- Position the ADU condo for buyers seeking a more attainable ownership opportunity.
- Structure purchase agreements, disclosures, and financing in a way that complies with state and local requirements.
Potential Benefits and Challenges of Selling Your ADU Under AB 1033
AB 1033 can be powerful for the right property, but it is not the best strategy for every homeowner. Here are some of the main pros and cons to weigh.
Potential Benefits
- Unlock equity. Selling an ADU as a condo can allow you to realize value that might otherwise be tied up in the property.
- Create a lower price point home. A smaller ADU condo can be sold at a lower price than a full single family home, which helps buyers who are priced out of traditional options.
- Share land and long term maintenance. The condo structure allows shared responsibility for big-ticket items such as roof replacement or major site work.
Potential Challenges
- Upfront costs and complexity. Surveying, legal work, HOA formation, and City review involve professional fees and time.
- Ongoing HOA relationship. You and your buyer will likely be in a long term shared ownership relationship, which requires clear rules and good communication.
- Financing and appraisal. Some lenders are cautious about very small condo projects with only two units, which can affect rates, terms, or buyer eligibility.
Because of these tradeoffs, many Los Angeles homeowners choose to design and build their ADU in a way that keeps both options open: long term rental now, and a possible condo sale later if the numbers and family plans line up.
Zoning Laws and Local Limitations: What Homeowners Need to Know Before Selling
Even with AB 1033 in place, zoning and subdivision rules still set the outer limits of what you can do on your property.
Key considerations in Los Angeles include:
- Base zoning district. Your underlying R1, RD, or other residential zone controls lot coverage, height, and other development standards that still apply to ADUs and condo projects.
- Maximum number of units. AB 1033 does not let you add more dwelling units than state and local law allow. It simply allows you to change how those units are owned.
- Parking and access. The City will look closely at safe access to each unit, emergency vehicle access, and whether parking arrangements meet code or are acceptable under current ADU rules.
- HOA and shared obligations. If your property is in an existing HOA, its governing documents may limit or regulate ADUs and separate sales. You may need HOA approval in addition to City sign off.
This is another reason to involve professionals early. An experienced design build firm can help plan an ADU layout that works within zoning while supporting a clear, clean condo map if and when you decide to go that route.
If you are still deciding what type of unit to build, it may also be worth comparing site built and factory built options. Curious if a prefab unit makes sense for your lot?
The Future Outlook: How AB 1033 Might Impact the LA Housing Market and Affordability
As more cities adopt AB 1033 ordinances, California is likely to see a new category of “backyard condos” that offer smaller, more attainable ownership opportunities. Los Angeles is expected to be a significant player in this trend because:
- The city already has strong ADU adoption and a severe affordability crisis.
- Many homeowners have underutilized lots that could support well planned ADUs that function as independent homes.
- Investors, small developers, and multigenerational families are all interested in flexible ownership models.
Over time, this could mean:
- More entry level ownership opportunities scattered through existing neighborhoods.
- New incentives to invest in high quality ADU construction rather than bare minimum rental units.
- A modest but meaningful contribution to the region’s overall housing supply.
At the same time, regulators are watching to ensure that ADU condo conversions do not undermine long term rental stock or lead to speculative activity that pushes prices even higher. Expect state guidance and local fine tuning as early projects move through the system.
Is Selling Your LA ADU as a Condo the Right Move?
AB 1033 gives Los Angeles homeowners a powerful new tool. Instead of treating the ADU as a permanent appendage to the main house, you may be able to convert it into its own condo, unlock equity, and help create a more attainable home for someone else.
Whether that is the right move for you depends on your long term goals, your tolerance for a more complex legal structure on your property, and how the numbers pencil out when you factor in costs, financing, and tax implications.
The smartest approach is to plan ahead. Design and permit your ADU with future flexibility in mind, stay current on how Los Angeles is implementing AB 1033, and involve a real estate attorney, tax professional, and an experienced ADU design build team early in the process. That way, you can safely navigate the new law, protect your interests, and maximize the value of your Los Angeles property.