New California law will help you sell your ADU separate from your main home. AB 1033 helps Californian homeowners

There has been a lot of buzz around ADU policies in Sacramento recently. AB 1033 is a new law that gives you the freedom to sell a tiny home in your backyard.

AB 1033 - Legally selling an ADU separate from your main home

With this new law, you will be able to sell an ADU built in your backyard as a separate home. This means that ADUs might be sold as individual units, similar to condos.

A condo-ized ADU means that the ADU is part of a co-owned property with one party owning the primary residence and the other party owning the ADU. Under these terms, the ADU is considered a separate entity from the main home and can be sold separately.

ADU Condo-ization in other states

Other states and cities have already adopted this. In Texas, Oregon, and Washington, they have seen resounding success with similar AB 1033 laws. According to the Seattle Times, 33% of new ADUs permitted in Seattle in 2021 were classified as condos. The average ADU "condo" sold for $732,000 in Seattle, according to the Seattle Times. Meanwhile, the average median house price in Seattle sits around $1.2M. Saving first-time home buyers hundreds of thousands of dollars.

How this helps Californian homeowners

Now, Californian homeowners can do the same. While building an entire ADU costs between $200,000 - $400,00 for a basic ADU in California, if ADUs are as successful in California as they are in Washington, homeowners stand to make a nice profit off their condo-ized ADU.

AB 1033 will also be advantageous to current homeowners who could use the sale of an ADU to help finance its construction. It also allows homeowners who do not want to be landlords to simply build the ADU for sale. This would allow more families a chance at homeownership.