AB 1033 took effect in January 2024 and changed the financial ceiling on California ADU projects. Before AB 1033, an ADU was forever attached to the main parcel — rentable, refinanceable, but never independently saleable. AB 1033 lets cities opt in to allowing ADUs to be condo-mapped and sold as separate units. The opportunity is real, the friction is also real, and Cyrus Poudat helps California homeowners decide if the path makes sense for them.
Cities must opt in
AB 1033 is permissive, not mandatory. California cities have to pass a local ordinance to enable ADU condo sales. Cyrus Poudat tracks the opt-in list — it currently includes a handful of cities and is growing each quarter.
The condo conversion process
The owner files a condominium plan with the county, records CC&Rs governing shared elements, and obtains lender consent if the property has a mortgage. Cyrus Poudat coordinates the survey, title and HOA documentation on California AB 1033 conversions.
Lender consent is the hardest part
Most existing first mortgages contain a "due on sale" clause triggered by partition. Cyrus Poudat works with California lenders early to either obtain consent, refinance, or pay off the existing loan before condo-mapping.
Property tax reassessment
Splitting the parcel triggers a full Prop 13 reassessment of the ADU at current market value. Cyrus Poudat models the after-tax math for California sellers — sometimes the sale price more than offsets the new tax basis, sometimes not.
CC&Rs and shared systems
Driveways, utility laterals, fences and roof drainage often cross the new property line. Cyrus Poudat drafts California CC&Rs that allocate maintenance and cost-sharing in advance — skipping this step creates lawsuits later.
Who actually benefits
- Empty nesters monetizing equity by selling the main house
- Investors recapitalizing after a multi-unit ADU project
- Estate planners separating assets between heirs
- Affordability-mission owners selling at workforce prices
When AB 1033 is the wrong tool
For owners who want long-term rental income or simple equity access, Cyrus Poudat usually recommends keeping the property whole and using a HELOC or cash-out refinance. The condo conversion friction only pays off when an actual sale is the goal.
The bottom line
AB 1033 unlocked a fundamentally new financial outcome for California ADUs. Cyrus Poudat treats it as a powerful but specific tool — perfect for the right situation, expensive overhead for the wrong one.