LA ADU Sale Under AB 1033 — Condo-Convert + Tract Map + CC&Rs + Lender Consent

If you've built an ADU in Los Angeles — or you're about to — and somebody in the family group chat mentioned "hey, you can sell it separately now," they're half right. California Assembly Bill 1033, signed by Governor Newsom in October 2023 and effective January 1, 2024, changed state law so that ADUs can be conveyed as independent condominium units, not just rented out. LA City opted in through Ordinance 187712 in July 2024, which makes Los Angeles one of the first major California cities where a single-family homeowner can legally build an ADU and later sell it to a third party while keeping the primary house.

That's the headline. The footnotes are where most homeowners get hurt.

AB 1033 is not by-right statewide. It's not automatic even in LA. It requires a Tract Map or Parcel Map, a Davis-Stirling-compliant HOA (even for two units), mandatory CC&Rs, lender consent on any existing mortgage, separate utility metering or a recorded sub-metering agreement, and a full Subdivision Map Act review through LADBS and LA Department of City Planning. On top of the $180K-$450K you'll already spend building the ADU, you're looking at an additional $25K-$55K in survey, legal, filing, and recording costs — and 12-22 months from groundbreaking to the day you can hand over keys to a buyer and deposit the check.

This guide walks through what AB 1033 actually allows, how LA's local opt-in works, who can legally touch the paperwork, and the specific pitfalls — Prop 13 reassessment, Fannie Mae conforming-loan limits, HOA reserve requirements — that turn a clean deal into a 14-month lawyer bill. Netanel Presman (CSLB #1105249) has tracked LA's AB 1033 implementation since Ordinance 187712 took effect and reviews every AB 1033 match AskBaily makes in the LA market.

What AB 1033 actually allows

Before AB 1033, a Los Angeles homeowner who built an ADU owned one parcel with two dwellings on it. The ADU could be rented under state ADU law (Gov. Code §65852.2), occupied by family, or left vacant — but it could not be sold to a stranger. The parcel was indivisible. The only way to sell the ADU separately was to lot-split under SB 9 (a completely different statute, with different rules, that works only in specific single-family zones and creates two separate lots, not two condo units on one lot).

AB 1033 amended Government Code §65852.26 to create a new path: separate conveyance of an ADU as a condominium unit under the Davis-Stirling Common Interest Development Act. The lot stays undivided. The ADU becomes a condo. The primary dwelling becomes a condo. The two condos share the underlying lot through a mandatory homeowners association, and each condo gets its own APN, its own property tax assessment, and its own grant deed once the Tract Map records. ¹

The important framing: AB 1033 is a conveyance law, not a zoning law. It does not change what you can build. It does not change ADU size limits, setback rules, or height restrictions. Those still come from LA's ADU ordinance and state ADU law. AB 1033 only changes what happens after the ADU is built and ready for occupancy — whether you can legally cut the title and sell the ADU as a standalone unit.

LA Ordinance 187712 — the local opt-in

AB 1033 requires every city and county to affirmatively opt in before any homeowner in that jurisdiction can use the law. LA City Council adopted Ordinance 187712 with the opt-in effective July 2024, making Los Angeles one of the first cities of its size in California to authorize ADU condo conveyance. ²

Ordinance 187712 did three things the state law left to local discretion: it laid out the specific Subdivision Map Act procedures LADBS and LA Department of City Planning would use, it specified CC&R minimum content LA would require (maintenance of shared structural elements, reserve funding language, utility apportionment), and it clarified that existing mortgage holders must consent in writing before a Tract Map can record against a parcel with an encumbrance.

A few other California cities — Pasadena and West Hollywood among them — also opted in during 2024 and 2025. But the rest of the state is mixed. Most LA County unincorporated areas (Altadena, parts of Topanga, unincorporated pockets in the Valley) have not opted in as of early 2026. San Diego opted in late. San Francisco moved slowly because of entitlement complications with existing multi-family stock. If you hear someone say "AB 1033 is the law in California," they mean the state authorized it. They do not mean it's available where you live.

Why only some CA cities have opted in

Cities don't opt in automatically for a few reasons, and understanding them helps you predict whether your specific jurisdiction will join.

Infrastructure assumptions. AB 1033 conveyance creates two separately-taxed parcels where there was one. That means two water bills, two sewer bills, two trash assessments, two property tax accounts. Cities with stressed utility billing systems or outdated GIS parcel layers sometimes need 12-24 months of internal work before they can administer the change at scale.

HOA enforcement capacity. Davis-Stirling HOAs — even two-unit ones — are regulated by the Department of Real Estate and require annual meetings, reserve studies, and dispute resolution procedures. Cities worry about the downstream litigation when a two-person HOA deadlocks on a roof repair. LA's ordinance includes specific language requiring reserve funding in the CC&Rs, which is one of the things 187712 addresses that bare AB 1033 does not.

Affordable housing politics. Some cities opposed AB 1033 on policy grounds — they argued that separately-conveyed ADUs would convert rentals into owner-occupied units and reduce rental stock. Whether that's true depends on the market, but it was enough to slow opt-in in several South Bay and peninsula cities.

County vs city jurisdiction. If your address is in LA City, Ordinance 187712 applies. If your address is in unincorporated LA County, you fall under LA County's ordinance — and as of spring 2026, LA County unincorporated has not opted in. This matters hugely for places like Altadena (unincorporated), Topanga (unincorporated), and parts of the Santa Monica Mountains. A house five blocks apart can have totally different AB 1033 availability depending on which side of a jurisdictional line it sits on.

Check your specific jurisdiction's ordinance before committing to a design path. The difference between "my city opted in" and "my city hasn't opted in yet" is the difference between a 14-month conveyance timeline and a project that simply can't happen.

The 9-step process from build to conveyance

AB 1033 conveyance cannot happen on paper while the ADU is still a plan set. You have to build the structure first, then convert the legal status. Here's the sequence inside LA City:

1. Build the ADU. Full construction under LA's ADU ordinance, pulled permits, inspections. No shortcut here. AB 1033 requires a completed structure with a final certificate of occupancy before any subdivision filing.
2. Apply for ADU certificate of occupancy + final inspection. LADBS sign-off. This is the trigger that lets you start the subdivision paperwork.
3. Engage a CA-licensed Land Surveyor. They prepare a Tract Map or Parcel Map under the Subdivision Map Act — a legally-recordable survey document that defines the condominium footprints, common areas, and easements. Budget $8K-$25K depending on lot complexity. ³
4. Draft CC&Rs via a real-estate attorney. The covenants, conditions, and restrictions governing the mandatory HOA. Must comply with Davis-Stirling (Civil Code §4000-6150). Must cover maintenance of shared structural elements (roof, foundation, exterior walls), utility apportionment, insurance, reserve funding, dispute resolution. Budget $5K-$15K. ⁴
5. File Subdivision Map Act application with LADBS + LA Department of City Planning. This is the formal request to convert the parcel into a two-unit condominium. Planning reviews zoning compliance. LADBS reviews structural and life-safety compliance. ⁵
6. Obtain lender consent. Your existing mortgage holder must sign off. If they won't, you either refinance into a loan that permits subdivision or you don't proceed. This is the step that kills more AB 1033 projects than any other.
7. LADBS + Planning approval. Typical window is 6-12 months from application to final approval, depending on departmental backlog and whether your CC&Rs need revisions.
8. Record Tract Map with LA County Recorder. Once recorded, the parcel is legally subdivided. Each condo unit gets its own APN. The County Assessor reassesses.
9. Each unit is independently conveyable. You can now sell, gift, or transfer the ADU separately. The primary dwelling remains under your ownership (or is also sold).

Steps 3, 4, and 6 run partially in parallel. Steps 5 and 7 are sequential and time-intensive. Steps 8 and 9 happen quickly once approvals are in hand.

Tract Map vs Parcel Map via CA-licensed Surveyor

Two documents can legally subdivide a parcel under the Subdivision Map Act: a Tract Map and a Parcel Map. For AB 1033 two-unit conveyance, most LA projects use a Parcel Map because it's the simpler filing authorized for subdivisions of four or fewer parcels or condominium units. A Tract Map is required for larger subdivisions and carries more review. ⁵

Only a California-licensed Land Surveyor or a Professional Civil Engineer with surveying authority can prepare either document. The surveyor physically measures the site, drafts the map to scale, and submits it for checking by the LA County Surveyor's office before LADBS and Planning issue conditional approval.

The map is not a floor plan. It's a legal instrument that defines each condominium unit's footprint, exclusive-use areas (private yards, driveways), common areas (shared roof above both structures, shared utility corridors, foundation), and any easements crossing the parcel. The map is what gets recorded — not the CC&Rs, not the construction drawings. Once recorded, it becomes the definitive legal description of the property.

Expect the survey-to-approval cycle to take 3-6 months on its own, and expect at least one round of corrections before the map is accepted. Budget accordingly.

Davis-Stirling HOA + CC&Rs

AB 1033 conveyed ADUs are condominium units under the Davis-Stirling Common Interest Development Act. That means the moment your Tract Map records, you have created a homeowners association. Even if the HOA has only two members — you and the ADU buyer — Davis-Stirling applies. ⁴

The CC&Rs — Covenants, Conditions, and Restrictions — are the governing documents. They define:

• Maintenance responsibility. Who pays for roof repairs? Exterior painting? Foundation work? In a two-unit HOA, cost allocation usually runs 50/50 or by square footage, but the CC&Rs have to say so explicitly.
• Utility apportionment. If utilities aren't separately metered, the CC&Rs must specify how bills are split and how disputes are resolved.
• Insurance. The HOA typically carries a master hazard policy covering the shared structural elements. Each unit owner carries individual HO-6 coverage for interior contents and improvements.
• Reserve funding. Davis-Stirling requires reserve studies for common-area components with a useful life over three years. Even in a two-unit HOA, you're supposed to fund a reserve for the roof, exterior paint, and foundation.
• Annual meetings. Davis-Stirling mandates annual member meetings, minutes, and budget adoption. Two-unit HOAs can hold these informally, but they still have to happen and be documented.
• Dispute resolution. IDR (Internal Dispute Resolution) and ADR (Alternative Dispute Resolution) procedures before any lawsuit.

Drafting CC&Rs for a two-unit AB 1033 condominium is specialized work. Most general real-estate attorneys haven't done it. Some specialize in condominium law but have only worked on larger developments and will charge you for the learning curve on a small project. The pool of attorneys in LA who have actually drafted AB 1033 CC&Rs is small — ask for references and specifically ask whether they've closed an AB 1033 conveyance since Ordinance 187712 took effect.

Lender consent — the Fannie/Freddie conforming-loan trap

This is the step that kills projects.

If you have an existing mortgage on the property — which almost every homeowner does — the lender holds a security interest in the entire parcel. Subdividing that parcel changes the collateral. Lenders have the right, and almost always the requirement, to consent in writing before the Tract Map records.

Three ways this plays out:

Lender consents. Some lenders will sign off if the loan-to-value ratio is comfortable (below 70% typically), the borrower has strong credit, and the lender sees the restructured collateral as equal or better security. This is the clean path. Figure on 30-90 days for the consent review and some paperwork cost.

Lender refuses, refinance works. The lender won't sign off on the existing loan, but you can refinance into a new mortgage structured to permit subdivision. This adds cost — closing costs, possibly a higher interest rate if rates have moved — and adds 60-120 days to the timeline. For homeowners with equity and good credit, this is the usual outcome.

Conforming-loan trap. Fannie Mae and Freddie Mac — which back most residential mortgages — have selling guides written for traditional condo developments of 20+ units. Their condo project eligibility rules require certain HOA insurance coverages, budget reserves, and developer-control provisions that weren't designed for two-unit AB 1033 HOAs. Some AB 1033 condos don't qualify as "warrantable" condos, which means the buyer of your ADU may not be able to get a Fannie- or Freddie-backed mortgage. They'd need a non-conforming (portfolio) loan, which is harder to find and usually carries a higher rate. This depresses the ADU's resale price. ⁶

Mortgage brokers who specialize in ADU and non-conforming condo financing have emerged in LA since Ordinance 187712 passed — ask any AB 1033 team you're interviewing whether they have a lender relationship. If they don't, you're going to find out about the conforming-loan trap after you've already spent $40K on the paperwork.

Prop 13 reassessment risk

California's Proposition 13 caps annual property tax increases at 2% of the assessed value as long as ownership doesn't change. When part of a property changes hands — like when you convey an ADU to a third-party buyer — the County Assessor reassesses that portion at current market value.

For AB 1033 conveyance, this plays out in a specific way:

• The ADU unit gets reassessed at the sale price. The buyer pays property tax based on current market value, which is fine — that's what they signed up for.
• The primary dwelling typically keeps its Prop 13 base. If you've owned the property for 15 years and the base is low, that base mostly survives the subdivision, because you didn't transfer ownership of the primary unit.
• Partial reassessment can occur. When a parcel is subdivided, the Assessor reassesses the land portion according to current market allocation, and sometimes the land-value apportionment between the two new parcels triggers a partial bump even on the primary dwelling. The increase is usually small but not zero.
• Intra-family transfers have changed under Prop 19. If you convey the ADU to an adult child (not a stranger), Prop 19 (effective February 2021) sharply limited the parent-to-child exclusion. Most transfers to children now trigger reassessment unless the child moves in as their primary residence within a year.

Talk to a CPA or an estate planning attorney before committing to an AB 1033 conveyance. The tax math can swing the economics of the deal by tens of thousands of dollars over a decade of ownership.

Cost: +$25K-$55K incremental on top of ADU build

Here's the incremental cost of AB 1033 conveyance on top of whatever you're already spending to build the ADU itself:

• Tract Map or Parcel Map + survey: $8K-$25K
• CC&Rs + real-estate attorney: $5K-$15K
• LADBS + LA Department of City Planning fees: $2K-$8K
• Title insurance + recording fees: $2K-$6K
• Refinance costs, if lender consent requires it: $5K-$15K (only if applicable)
• CPA consultation on Prop 13 and Prop 19 implications: $500-$2,500
• Mortgage broker consultation on non-conforming lending: often bundled into refi cost

Total incremental AB 1033 conveyance cost: $25K-$55K on top of ADU construction.

The ADU construction itself, for context, is a separate line item. LA detached ADU baseline in 2026 runs $180K-$450K all-in depending on size, finish level, and site conditions. So a homeowner building a 1,000 square-foot ADU and planning to sell it under AB 1033 is looking at a total outlay of roughly $205K-$505K before any refinance or financing cost.

The economic justification is straightforward: separable ADUs in LA markets have been trading at $400K-$800K depending on neighborhood, size, and condition. If the build-plus-conveyance cost is $250K and the separable sale price is $550K, the homeowner clears the difference. But the math is sensitive to neighborhood comps, mortgage financing availability for the buyer, and market timing — and the costs are front-loaded while the sale is back-loaded by 12-22 months.

Timeline: 12-22 months total

From breaking ground on the ADU to the day you can hand over keys to a third-party buyer, the realistic window is 12-22 months:

• ADU construction: 6-10 months (varies heavily with site conditions, weather, subcontractor scheduling, and whether the structure is attached, detached, or a conversion of existing space).
• AB 1033 conveyance process: 6-12 months (survey and map preparation, CC&R drafting, Subdivision Map Act application, LADBS and Planning review, lender consent, Tract Map recording).

These stages partially overlap. A well-organized team starts engaging the surveyor and drafting CC&Rs while the ADU is still framing, so the conveyance paperwork is close to approval-ready by the time the certificate of occupancy is issued. A disorganized team finishes the build, then starts the paperwork from scratch, and adds four to six months to the back end.

If you want the ADU available for sale within a specific window — for example, to match a child's college graduation or a downsize timeline — start the AB 1033 team conversations before you break ground, not after.

Why homeowners actually do this (5 use cases)

AB 1033 conveyance is not a universal win. It's the right answer for specific situations:

1. Equity unlock. You own a house worth $2M with $1.5M in equity. You build an ADU for $300K, convey it under AB 1033, sell it for $600K, and net roughly $250K-$275K after costs. The primary house stays yours. You've pulled real cash out of a property without selling the whole thing.
2. Intergenerational housing. You build an ADU for an adult child to live in. At some point, you want the child to own their unit outright — either because they're establishing credit, planning for their own equity accumulation, or want to eventually sell without dealing with a family transfer. AB 1033 lets you convey the ADU to them now, clean.
3. Downsize in place. You want to live smaller but don't want to leave the neighborhood. You build an ADU designed as your future residence, move into it, and sell the primary house. You stay on the lot, keep your address, and capture the spread between the primary house sale price and the ADU's cost basis.
4. Investment property creation. You plan to retire eventually and want rental income. Building and conveying an ADU lets you create a separable investment property that can be rented now and sold later, independent of the primary house.
5. Estate planning. Conveying the ADU into a trust, or to a child under Prop 19's narrow exemption, can simplify estate distribution. Careful — Prop 19 closed most of the parent-child exclusion that used to make this easy. Work with an estate planning attorney before assuming the tax outcome.

If none of these describe your situation, AB 1033 probably isn't worth the $25K-$55K incremental cost and 12-22 month timeline.

What Baily verifies before any LA AB 1033 match

AskBaily's AB 1033 routing for LA matches is deliberately tight. Because the project type is still rare in 2026, most general ADU builders and most real-estate attorneys have never closed one. Netanel Presman (CSLB #1105249) reviews the team composition on every LA AB 1033 project we route, and the checklist is:

• Active California CSLB B license with documented ADU build experience ⁷
• Named CA-licensed Land Surveyor (not "we'll find one later") with Parcel Map or Tract Map experience in LA County
• Real-estate attorney with AB 1033 CC&R drafting experience. The pool is small. We ask for two references from completed AB 1033 projects since July 2024.
• Familiarity with LA Ordinance 187712 specifics. Not just "we know about AB 1033" — actual working knowledge of 187712's CC&R minimum content, LADBS filing procedures, and lender consent language.
• Mortgage broker relationship. Someone on the team who can advise the homeowner on lender consent strategy and, if needed, line up non-conforming financing for the buyer.
• At least one completed AB 1033 conveyance. AskBaily prioritizes teams that have closed at least one deal since Ordinance 187712 effective date. There are still very few such teams in LA.

Angi, Thumbtack, and HomeAdvisor will happily sell your AB 1033 lead to 12 generalist ADU contractors who've never filed a Parcel Map. AskBaily sends it to one pre-vetted team — CSLB B + licensed surveyor + AB 1033-experienced attorney + mortgage broker — verified by Netanel Presman. That's the difference.

Frequently asked questions

Can I sell my ADU separately anywhere in LA County under AB 1033?

Only if your specific city has opted in. AB 1033 (2023) isn't statewide-by-right — each local agency must affirmatively adopt it by ordinance. LA City opted in through Ordinance 187712 effective July 2024. Pasadena and West Hollywood have also opted in. But many LA County unincorporated areas (Altadena, West Hills, Topanga, parts of the Valley outside incorporated cities) have not yet opted in as of 2026, so AB 1033 conveyance isn't available there. Check your specific jurisdiction's ordinance or ask your land-use attorney before starting design.

Is AB 1033 the same as SB 9?

No, and conflating them causes expensive mistakes. SB 9 is a lot-split law — it lets you divide a single-family parcel into two separate lots, each with its own independent title. AB 1033 is a conveyance law — the lot stays whole, but the primary dwelling and ADU become two condominium units on that undivided lot, governed by a mandatory HOA. SB 9 gives you two lots. AB 1033 gives you one lot with two condos. The zoning rules, design constraints, and legal mechanics are completely different.

Do I have to get my mortgage lender's permission?

Yes, if you have an existing mortgage. The lender holds a security interest in the whole parcel, and Subdivision Map Act filings require lender consent when the collateral is encumbered. If your lender won't consent, you can either refinance into a loan that permits subdivision or not proceed. Lender consent is not optional. Plan for 30-120 days for the consent review and budget for refinance costs if your lender refuses.

What happens to my Prop 13 base if I convey the ADU?

The ADU unit gets reassessed at its sale price — the buyer pays property tax based on current market value, which is expected. The primary dwelling usually keeps most of its Prop 13 base, because you didn't transfer ownership of that unit. Some partial reassessment of the land-value allocation can occur during subdivision, but it's typically small. If you're conveying the ADU to an adult child rather than a stranger, Prop 19 (effective February 2021) closed most of the parent-to-child reassessment exclusion, so that scenario usually triggers full reassessment on the conveyed unit. Consult a CPA or estate planning attorney before committing.

Why are AB 1033 conveyance costs so high on top of the build?

The $25K-$55K incremental cost covers the Parcel Map or Tract Map from a licensed surveyor ($8K-$25K), CC&R drafting by a real-estate attorney ($5K-$15K), LADBS and Planning fees ($2K-$8K), title insurance and recording ($2K-$6K), and possibly refinance costs if lender consent requires it ($5K-$15K). These are the legal and regulatory costs of converting a single parcel into a two-unit condominium development — even a tiny two-unit one. The Davis-Stirling HOA requirements, Subdivision Map Act procedures, and lender consent process apply the same way they would to a 20-unit condo, just scaled down. It's one of the reasons AB 1033 isn't economic for every ADU — the fixed conveyance costs only pencil out when the separable ADU sale price is high enough to absorb them.