Assembly Bill 1033 (AB 1033) proposes significant changes regarding the sale or conveyance of Accessory Dwelling Units (ADUs) in California, aiming to reshape homeownership dynamics across the state.

Currently, the law allows ADUs to be sold or conveyed separately from the primary residence. However, AB 1033 seeks to mandate local jurisdictions to establish ordinances that facilitate the separate conveyance of ADUs from primary residences without imposing limitations.

One of the most notable aspects of AB 1033 is its allowance of various forms of conveyance for ADUs. This flexibility opens doors to diverse ownership models, such as timeshares, Tenants in Common, lot splits, or fractional ownership. Importantly, it removes the requirement for owner occupancy, paving the way for broader ownership structures.

However, the bill does not guarantee the creation of ownership units. It prevents local governments from imposing owner occupancy requirements within their ordinances. This aspect raises concerns about the potential for ADUs to be sold to large real estate investment trusts (REITs) and corporate investors, potentially limiting homeownership opportunities for Californians.

Moreover, AB 1033 poses risks to consumer protection. Its open-ended nature regarding conveyance methods could lead to significant title issues, potentially hindering property sales. Additionally, properties conveyed under AB 1033 may not qualify for traditional financing programs like FHA and VA loans, posing challenges for seniors, veterans, and low-income families aiming to secure housing.

In essence, AB 1033 represents a significant shift in California's real estate landscape, with implications for both homeowners and prospective buyers, necessitating careful consideration of its potential impacts on housing accessibility and consumer rights.

01/27/2024