Accessory dwelling units (ADUs) have become a popular way to increase functional living space across California. They can provide space for aging parents, adult children, or a growing family, especially in areas with high housing costs. But can you sell your ADU separately in California if your needs change?
In most cases, the answer is no, though there are some exciting developments. At Valley Home Builders, we specialize in designing and constructing high-quality accessory dwelling units that serve your family’s evolving needs and provide a valuable return on investment through passive rental income.
Can You Sell an ADU Separately in California?
Generally, an ADU is legally tied to the primary residence and cannot be sold as a stand-alone property. It typically shares the same parcel number, utility connections, and zoning designation as the main home. This means that if you were to sell your home, the ADU would transfer along with the property.
However, recent legislation is changing the landscape. AB 1033 allows ADUs to be sold separately, but only in cities or counties that have opted into this possibility. San Jose is at the forefront of this movement, having been one of the first cities in California to embrace the potential of AB 1033 and create a pathway for homeowners to sell their ADUs independently. This forward-thinking approach reflects San Jose’s commitment to addressing the housing crisis and providing flexible housing options for its residents. While the process still requires converting the properties into condominiums and obtaining lienholder approval, San Jose’s early adoption signals a significant shift in ADU policy
Even if your city or county allows for the separate sale of ADUs, the ADU and main property must be converted into condominiums first, and all lienholders must approve the subdivision. This can be a complex process.
What This Means for Your Property Value
Even if you cannot sell your ADU separately today, building one can still significantly increase your property’s value. In competitive markets like San Jose and neighboring Silicon Valley communities, buyers looking for multigenerational living solutions, space for adult children, or passive rental income will see the value in a separate living space.
At Valley Home Builders, we build ADUs that meet your immediate needs and enhance long-term resale value. Our focus is on creating spaces that solve your family’s housing challenges and improve how you live – not simply adding square footage.
Can You Sell an ADU Separately? Final Thoughts
While selling your ADU separately in California is not yet widely permitted, the trend is moving in that direction, especially in the Silicon Valley. San Jose has already approved it, and other cities are likely to follow. In fact, PG&E now requires separate meters for all new ADUs in the Bay Area, and separate addresses are increasingly common, signaling a move towards legalizing the sale of ADUs throughout the region. Building an ADU is a fantastic way to house family, generate passive income, and increase your property value in a rapidly changing market.
If you are ready to explore building an ADU on your South Bay property, contact Valley Home Builders today for a personalized consultation.
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